THE IMPACT OF SPORTS LAW ON E-SPORTS AND GAMING

ABSTRACT

E-sports has rapidly evolved into a multi-billion-dollar industry, prompting increasing legal scrutiny. This paper explores the intersection of sports law and e-sports, analyzing employment laws, governance challenges, integrity issues, and the commercialization of e-sports. Given the absence of a unified governing body, e-sports operates in a fragmented regulatory environment, where traditional sports laws often struggle to apply. Issues such as player contracts, diversity and inclusion, gambling regulations, intellectual property rights, broadcasting, and taxation present new challenges. Through a review of existing literature and legal frameworks, this study assesses the implications of applying traditional sports law to e-sports and suggests pathways for developing a cohesive legal framework tailored to the unique characteristics of digital competition.

Keywords

Esports, sports law, doping regulations.

INTRODUCTION

E-sports has emerged as a significant industry, growing from niche communities to global competitive arenas attracting millions of viewers.^[1] With revenue projections expected to reach USD 11.94 billion by 2030, the legal landscape governing e-sports remains in flux. Unlike traditional sports, which operate under well-established regulatory bodies, e-sports lacks centralized oversight, leading to inconsistencies in governance, labor rights, and competitive integrity.^[2]

The rise of e-sports as a mainstream entertainment and professional industry has been driven by technological advancements, increased investment from corporate sponsors, and a growing player base.^[3] However, its exponential growth has outpaced the development of legal frameworks to govern it effectively. One of the most pressing concerns is the status of e-sports athletes. Unlike traditional athletes, professional gamers often lack standardized employment protections, leading to exploitative contracts, unfair working conditions, and a lack of collective bargaining rights. Many players, particularly in emerging markets, struggle with issues such as delayed payments, lack of healthcare benefits, and limited career longevity due to the highly demanding nature of competitive gaming. The absence of a governing labor body further complicates matters, leaving players vulnerable to contractual abuses and abrupt dismissals.

Additionally, competitive integrity and ethical concerns present significant legal challenges. Unlike traditional sports, where doping regulations and anti-corruption measures are well-established, e-sports struggles with issues such as match-fixing, cheating via software hacks, and performance-enhancing drug use (such as Adderall for increased concentration). The lack of standardized regulations across tournaments and game titles has made enforcement inconsistent, threatening the credibility of the industry.

As e-sports continues its rapid ascent, there is a growing need for clear, standardized legal frameworks to ensure sustainability, fairness, and industry-wide integrity. The lessons from traditional sports law offer a foundation, but new regulatory models must be developed to address the unique challenges of digital competition. This paper explores the intersection of sports law and e-sports, focusing on employment law, governance, integrity, commercialization, taxation, and future regulatory developments. By analyzing current legal gaps and potential solutions, this study aims to provide a comprehensive understanding of the evolving e-sports legal landscape, paving the way for a more structured and sustainable future.

WHAT IS E-SPORTS?

E-Sports are video games that are played in a highly organized competitive environment.^[4] Traditional sports are governed by well-established legal principles that regulate contracts, labor rights, doping, governance, and dispute resolution. Key institutions such as the International Olympic Committee (IOC), Fédération Internationale de Football Association (FIFA), and national sports governing bodies enforce these laws. The regulation of traditional sports relies on national and international frameworks that ensure fair competition, protect athletes’ rights, and maintain sporting integrity.^[5]

Unlike traditional sports, e-sports lack a centralized governing body. Instead, individual game publishers, tournament organizers, and teams set their own rules and regulations. Major stakeholders include organizations like Riot Games (League of Legends), Valve Corporation (Dota 2, Counter-Strike), and Activision Blizzard (Call of Duty). The absence of a unified regulatory framework has led to inconsistent enforcement of player rights, contracts, and competitive integrity.^[6]

EMPLOYMENT LAW IN E-SPORTS

The status of E-Sports players varies significantly across jurisdictions, often falling into ambiguous employment categories. Key issues include, employment status, many players operate as independent contractors rather than employees, affecting their rights to benefits, wages, and collective bargaining. Unlike traditional sports athletes who have structured employment contracts with teams and leagues, e-sports players often negotiate terms directly with sponsors and organizations, leading to inconsistencies in their legal rights and protections.^[7] Next is diversity and inclusion as E-sports faces criticism over lack of representation and inclusion. Legal measures, such as affirmative action policies, can promote diversity, but their implementation remains inconsistent across regions. Women and marginalized groups in e-sports often face systemic barriers, including pay disparities and limited opportunities for professional advancement. Addressing these issues requires stronger anti-discrimination policies and inclusive hiring practices within gaming organizations.^[8] Moreover, given the rapid rise of e-sports, contracts often contain restrictive covenants that can limit player mobility and earnings. Enforceability varies depending on national labor laws, highlighting the need for standardized contractual protections. Additionally, concerns over unfair termination clauses and non-compete agreements highlight the need for regulatory oversight to protect players from exploitative contracts.^[9]

WHAT ARE SOME OF THE CHALLENGES IN E-SPORTS?

There are many challenges in E-Sports, one of which is governance challenges. Unlike FIFA or the International Olympic Committee, e-sports lacks a single global governing body, leading to inconsistencies in rules and regulations. Governance issues include: Game developers, rather than independent sports federations, often regulate their own tournaments, creating conflicts of interest. Developers hold significant power in determining competition formats, prize distribution, and disciplinary measures, often prioritizing corporate interests over competitive fairness.^[10] Different jurisdictions impose varying legal standards on e-sports competitions, leading to a lack of transparency for teams, sponsors, and players. National regulations differ on issues such as taxation, contract enforcement, and betting laws, complicating the organization of international tournaments.^[11] Emerging technologies offer potential solutions by introducing smart contracts and decentralized governance structures, enhancing fairness and security in competitions. The adoption of blockchain-based prize distribution systems can reduce disputes and improve financial transparency in the industry.^[12]

There are also several challenges regarding ensuring fairness and preventing unethical behavior in E-Sports. Some of the major issues include: Unlike traditional sports, e-sports lacks a unified anti-doping agency. The use of performance-enhancing software and stimulants remains largely unchecked. Some players use software hacks and stimulant drugs to gain an unfair competitive edge, raising concerns about fair play.^[13] The integration of microtransactions and in-game purchases raises concerns about gambling regulations, particularly regarding minors. Some governments have classified loot boxes as gambling, leading to stricter regulations on in-game transactions. Consumer protection laws must be updated to address these risks.^[14] Tournament organizers invest in anti-cheating technology, but the sophistication of hacking tools poses ongoing risks. Cyberattacks targeting major tournaments have also highlighted the need for stronger cybersecurity measures to protect the integrity of e-sports competitions.^[15]

There are also challenges regarding commercialization and intellectual property especially in IP law given that game developers own the fundamental aspects of competition. Key legal concerns include:

Broadcasting Rights: Unlike traditional sports, where leagues own broadcasting rights, game publishers control e-sports tournaments, impacting revenue distribution. Publishers can impose restrictions on third-party broadcasts, limiting competition and market accessibility.^[16]
Player Image Rights: E-sports athletes often stream content independently, raising questions about image and likeness rights within sponsorship agreements. Players may not always retain control over their branding, leading to legal disputes with organizations and sponsors.^[17]
Franchise Systems: Some e-sports leagues, such as the Overwatch League, implement franchise models, resembling traditional sports structures but requiring tailored legal frameworks. The absence of standardized franchise agreements complicates revenue-sharing arrangements and dispute resolution mechanisms.^[18]

TAXATION IN E-SPORTS

E-sports earnings, including sponsorship deals, tournament prizes, and streaming revenue, are subject to taxation in different jurisdictions. Key considerations include: Cross-Border Taxation: International players and organizations face complex tax obligations when earning revenue from multiple countries. Double taxation treaties can mitigate these issues, but inconsistent enforcement remains a challenge.^[19] Some jurisdictions impose high tax rates on prize earnings, reducing the net take-home income for players. Clarifying tax regulations can help players and teams plan their financial obligations more effectively.^[20] With the rise of digital transactions and streaming revenue, taxation policies must adapt to accommodate new revenue streams in e-sports.^[21]

COMPARATIVE STUDY OF E-SPORTS LANDSCAPES IN DIFFERENT COUNTRIES

United States

The U.S. has one of the most developed e-sports markets, with robust legal frameworks governing contracts, sponsorships, and player rights. Organizations such as the Esports Integrity Commission (ESIC) help maintain competitive integrity. However, the classification of e-sports players as independent contractors rather than employees remains a point of contention.^[22]

South Korea

South Korea is a global leader in e-sports, with government-backed regulatory bodies such as the Korea e-Sports Association (KeSPA). The country has strong player protections and infrastructure, including standardized contracts and training facilities. However, strict gaming regulations, such as limits on youth gaming hours, have also shaped the industry.^[23]

European Union

The EU’s approach to e-sports varies by country, with Germany, France, and Sweden leading in player protections and industry regulations. France, for instance, has introduced legal recognition for e-sports contracts, ensuring fair labor practices. The EU’s broader legal framework, including data protection (GDPR), also impacts e-sports governance.^[24]

China

China’s e-sports industry is heavily regulated by the government, with strict content controls and licensing requirements. Despite these regulations, China remains a dominant force in competitive gaming, with significant investments in tournaments, infrastructure, and player development.^[25]

Japan

Japan has a complex relationship with e-sports due to its strict gambling laws, which historically limited prize pools. However, recent legislative changes have eased restrictions, allowing the industry to grow. The Japanese Esports Union (JeSU) plays a crucial role in shaping regulations.^[26]

THE FUTURE OF E-SPORTS LAW AND GLOBAL REGULATION

As e-sports continue to grow, the need for global regulatory frameworks becomes increasingly evident. A harmonized approach to e-sports law could help resolve legal inconsistencies while ensuring fair competition and player protection. Key areas for future development include:

Standardizing International E-Sports Law: Creating a global legal body akin to FIFA or the IOC to oversee regulations.
Employment and Labor Rights: Establishing clear classifications for e-sports players to determine their legal rights and obligations.
Anti-Doping Measures: Strengthening and unifying anti-doping regulations to maintain fair competition.
Broadcasting and Media Rights: Developing guidelines for revenue sharing and intellectual property protections.
Cybersecurity and Data Protection: Addressing privacy concerns related to streaming, personal data, and hacking threats.

The continuous evolution of e-sports law requires collaboration between governments, stakeholders, and legal experts to ensure sustainable growth and legal stability in the industry.

FUTURE LEGAL DEVELOPMENTS AND RECOMMENDATIONS

To ensure sustainable growth, e-sports requires a harmonized legal framework. Recommendations include:

Establishment of an International E-Sports Federation: A central governing body could provide regulatory oversight, standardize rules, and resolve jurisdictional conflicts. Creating a global regulatory authority would improve transparency and consistency in e-sports governance.
Adaptation of Sports Laws to Digital Competition: Legislators should develop specific legal provisions addressing the unique aspects of e-sports, including online contract enforcement and digital rights. Digital labor laws should protect players from exploitation and unfair contractual terms.
Ethical and Legal Standards for Game Developers: Developers should adhere to standardized guidelines concerning tournament integrity, player rights, and consumer protection. Implementing corporate social responsibility policies can promote ethical business practices in e-sports.

CONCLUSION

E-sports represents a rapidly growing and evolving industry that requires a nuanced and specialized legal framework to support its long-term sustainability. While traditional sports law provides a useful foundation, its direct application to e-sports is often impractical due to fundamental differences in governance, employment structures, commercialization models, and taxation policies. The digital nature of e-sports, combined with its global reach and reliance on intellectual property owned by game publishers, presents unique legal challenges that must be addressed proactively.

One of the most significant distinctions between e-sports and traditional sports is governance. In conventional sports, regulatory bodies such as FIFA, the NBA, and the IOC oversee rules, player conduct, and league operations. In contrast, e-sports lacks a centralized governing body, as each game is controlled by its respective publisher. This fragmented governance structure can lead to inconsistencies in rules, labor protections, and dispute resolution mechanisms across different games and tournaments. Without a unified regulatory framework, players, teams, and tournament organizers may face uncertainty regarding contracts, competitive integrity, and disciplinary actions. Establishing standardized regulations, whether through an independent e-sports governing body or cooperative agreements among publishers and stakeholders, is essential to ensuring fairness and transparency in competitive gaming.

Employment law in e-sports also requires careful consideration. Unlike traditional athletes who often have collective bargaining agreements and standardized contracts, e-sports players frequently operate under individually negotiated agreements that may vary significantly in terms of compensation, benefits, and job security. Many players sign contracts at a young age, sometimes without legal representation, which can lead to exploitative agreements that fail to provide adequate protections. Issues such as prize money distribution, sponsorship rights, and contractual obligations should be addressed within a legal framework that safeguards player interests while allowing organizations to operate competitively. Standardized employment contracts and labor protections tailored to the e-sports industry would help prevent disputes and promote long-term career sustainability for players. In conclusion, the continued growth and legitimacy of e-sports depend on the establishment of a legal framework that integrates technological advancements and global regulatory standards.

REFERENCES

Volkar Stein and Tobias M. Scholz, The Business Model network of eSports: The case of overwatch, 2019, Digital Games Research Association.
Alexander Tu, Pausing the Game: ESports Developer’s copyright claims to prevent or restrict tournament play, 2021, Vanderbilt Journal of Entertainment and technology Law.

^[1] The Rise of the ESports Industry: Inside Competitive Gaming’s Explosive Growth, ECG Productions, https://www.ecgprod.com/the-rise-of-the-esports-industry/ (last visited on January 29, 2025).

^[2] Verity Egerton-Doyle and Sinziana Ianc., The Rise of Esports: Navigating an evolving legal and regulatory landscape (by Linklaters), TechUk, https://www.techuk.org/resource/the-rise-of-esports-navigating-an-evolving-legal-and-regulatory-landscape-by-linklaters.html (last visited on January 29, 2025).

^[3] The Rise of eSports: An already growing ecosystem now accelerated by current events, August 2020, NOAURA, https://www.nomuraconnects.com/focused-thinking-posts/the-rise-of-esports-an-already-growing-ecosystem-now-accelerated-by-current-events/ (last visited on January 29, 2025).

^[4] Marc Leroux-Parra, Esports Part 1: What are Esports? April 24, 2020, Harvard International Review, https://hir.harvard.edu/esports-part-1-what-are-esports/ (last visited on January 29, 2025).

^[5] Hunter Whaley and R. Martin Witt, International Sports Law, April 2018, GlobaLex, https://www.nyulawglobal.org/globalex/international_sports_law1.html (last visited on January 29, 2025).

^[6] ESports Law, 2024/25, Queen Mary University of London.

^[7] Irfan Allana, Esports Series #1: Esports and Employment law: Staying ahead of the game, July 18, 2024, https://www.linklaters.com/en/insights/blogs/sportinglinks/2024/july/esports-series-1-esports-and-employment-law-staying-ahead-of-the-game (last visited on January 29, 2025).

^[8] Khaila Amazan-Hall, et al., Diversity and Inclusion in Esports Programs in Higher Education: Leading by Example at UCI, April 2018, ResearchGate, https://www.researchgate.net/publication/326759651_Diversity_and_Inclusion_in_Esports_Programs_in_Higher_Education_Leading_by_Example_at_UCI (last visited on January 29, 2025).

^[9] Supra note 2.

^[10] Emma Witkowski and Stephanie Harkin, ESports under sports mega-event conventions: associated values, inclusivity, and national representation at the Commonwealth Games, Taylor and francis, November 19, 2023, https://www.tandfonline.com/doi/full/10.1080/17430437.2024.2355656 (last visited on January 30, 2025).

^[11] Supra note 2.

^[12] Aristeidis Davelis, et al., Emerging Technologies: Blockchain and Smart Contracts, ResearchGate, https://www.researchgate.net/publication/360371888_Emerging_Technologies_Blockchain_and_Smart_Contracts (last visited on January 30, 2025).

^[13] Competitive Gaming Achilles Heel: E-Doping in E-Sports, March 18, 2024, IPLF, https://www.ipandlegalfilings.com/competitive-gaming-achilles-heel-e-doping-in-e-sports/ (last visited on January 30, 2025).

^[14] Jennifer Guillen, Loot Boxes and Potential Regulation as a For of Gambling, USC, https://sites.usc.edu/iptls/2021/01/14/loot-boxes-and-potential-regulation-as-a-form-of-gambling/ (last visited on January 30, 2025).

^[15] Sindu V Kashyap, As Esports Revenue surges, so do cyber threats, ACN, https://www.itp.net/acn/cybersecurity/as-esports-revenue-surges-so-do-cyber-threats-a-growing-concern-for-2025-olympics (last visited on January 30, 2025).

^[16] Alexander Tu, Pausing the Game: ESports Developer’s copyright claims to prevent or restrict tournament play, 2021, Vanderbilt Journal of Entertainment and Technology Law.

^[17] Calvin R. Nelson and William C. Lawrence, IP and Advertising Considerations for ESports, Venable LLP, https://www.venable.com/insights/publications/2021/10/ip-and-advertising-considerations-for-esports (last visited on January 30, 2025).

^[18] Volkar Stein and Tobias M. Scholz, The Business Model network of eSports: The case of overwatch, 2019, Digital Games Research Association.

^[19] Thomas Linder, Taxation of ESports Players, Lexology, https://www.lexology.com/library/detail.aspx?g=4ed75a79-ef43-4c44-bc36-e76dbc07ebcd (last visited on January 30, 2025).

^[20] Id.

^[21] Id

^[22] Launch of the International games and Esports tribunal, January 29, 2025.

^[23] ESports around the world: South Korea, July 25, 2023.

^[24] Developing the video games and e-sports sector in the EU, European parliament.

^[25] Esports around the world: China, July 25, 2023.

^[26] The Remarkable Success of the Japanese ESports Union (JeSU), Gamma law, https://gammalaw.com/the-remarkable-success-of-the-japanese-esports-union/ (last visited on January 31, 2025).

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