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Corruption and Match-Fixing in Esports

Esports is a new industry in most countries, and the laws and rules surrounding it are sometimes unclear.

The esports industry’s explosive growth is nearly unprecedented in the world – few industries have grown as quickly, nor seen as much enthusiastic worldwide support as this one. Naturally, there were growing pains as well. These largely related to the legal issues thrown up by the new industry.

From working conditions and payment disputes to visa problems, there were plenty of regional and international hurdles to take on. This proved doable overall, although some countries struggled more with adapting than others.

But as the years have shown, there is one area where esports are still severely lagging behind, legally speaking. And that area is regulation. There is very little – if any – legal oversight in the industry at the moment. What rules there are, are largely enforced not by governments, but rather by event planners and game publishers.

Terms of Service and end-user agreements between users and publishers forbid things like cheating, aim-botting and wall-hacking. At a small scale, the violation of these terms results in the user being banned from playing a game again. However, at a pro level, there is more at stake – huge amounts of money make up prize pools, even more people bet on the outcome of matches and so on.

The Impact of Dishonesty in Esports

Once money is in play, the results of cheating become much more severe – and cheating becomes criminal. At least, that’s the idea.

In reality, things aren’t always so clear cut.

With international tournaments and both online and offline competitions, just establishing jurisdiction can be extremely difficult, not to mention then pursuing any sort of punishment, and proving that wrongdoing actually happened.

All in all, there are few if any precedents of punishments so far, though some investigations have happened. Late last year, an Australian investigation into match-fixing in Counter-Strike: Global Offensive tournaments led to ten arrests – the crime they were charged with is “engaging in conduct that corrupts a betting outcome” – the players allegedly bet on their own matches and then lose deliberately. The law they broke is in no way specific to esports, which further illustrates the problem caused by lack of relevant legislature.

Few countries, if any, have filled in the legal gaps in the area of cheating. South Korea – one of the leading nations when it comes to video games and esports – is one of those. Some years ago, the South Korean parliament passed a law that specifically bans the “manufacturing and distributing programs that are not allowed by the game company and its Terms of Service.”

Violations of this law can lead to a prison sentence of up to five years, or a fine of roughly $43,000. This law still isn’t ideal though. Its vague phrasing covers non-harmful mods as well – for example Overwatch mods that merely track performance, but do not alter gameplay.

Esport’s Uncertain Future

Specifically in the world of esports betting, progress is happening, and more and more betting providers are actively working with publishers and event hosts in order to prevent any sort of manipulation – be it match throwing or any other sort of manipulation.

Outside of that, where there is even less regulation at the moment, things are less certain. With a few precedent cases such as the one in Australia, a trend in the right direction does seem to exist, but these cases are still too few and far between to really say that this problem is being addressed in the way it needs to.

Long-term, this legal void could impact the esports industry in a fairly significant way – if only because potential investors can be discouraged by the lack of security of their investments. While all investing carries risks, there are certainly industries that have, at least, adequate legal protection.

If resolved, if more and more countries stepped up to the plate under the continued cooperation of betting providers and publishers, the esports industry could significantly improve its validity and reputation – while also attracting more and more talent and investors to it.

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