European/international eSports law – a quick guide in 20(ish) mins

Jas PurewaleSports Conference, LondonApril 2016

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What we’ll discuss

1. Common legal issues within eSports

2. Key legal issues from outside eSports

3. Open questions

4. Panel chat

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About me

I’m an eSports, video games and tech lawyer. Over a decade of experience in international law firms in London, mainland Europe and Silicon Valley. Founded Purewal & Partners in 2014.

Over last several years, I have advised many parts of eSports ecosystem on legal and business matters. Examples:

- Advised on highest value player and team transfers in eSports history to date- Represented a major broadcaster on international regulatory matters- Advised a large US eSports gambling operator on EU considerations- Assisted a major event organiser on legal rules regarding tournaments/events- Assisted US eSports businesses to enter EU and EU businesses to enter US- Advising a number of EU eSports businesses right now on corporate, commercial

and organisational matters

(1) Common legal issues encountered within eSports

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(i) Uneven approach to business

• Player poaching/walk-outs/strikes.• Players not paid (or even given contracts).• Events quality uneven.• Leagues/publishers don’t cooperate.• Consumers confused, even misled.

Image credit: intothebush.com/link

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(ii) Lack of a level playing field

• Players often have little business knowledge (and usually no representation).

• Teams may be little better off.• No consistency regarding publisher/league/ event rules (if any).

• Sponsors don’t really want to be involved (but do want professionalism).

• No central standards setting.• No dispute resolution/mediation service.• Litigation via the press.

Image credit: onfieldsofgreen.com/link

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Example: player/team arrangements

Many player deals have a way to go…– Player and team rights– Financial terms– IP and ownership– Term and termination rights – Transfers– Liability – Penalties?– Dispute resolution– Publisher/eSport specific rules/requirements

Image credit: pocketables.com (link)

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(iii) The darker side of eSports

These things are rare, but they do happen…

• Cheating.• Match-fixing.• Illegal gambling.• Performance enhancing drugs (?)

Image credit: indiemarkllc/LucasFilm (link)

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There are great improvements too…

- Nascent consensus (?) on player/team arrangements

- Player-owned teams (e.g. Astralis)- Team-owned leagues (e.g. FaceIT/Twitch)- Team cooperation/coordination- Publisher/league involvement (?)

(2) European/international legal issues from outside eSports

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The general overview

• eSports is young and globalised, but experience shows that over time even young globalised industries are subject to local laws.

• There are real differences between US, EU and other countrie on a whole range of legal matters - this will in the medium term have an impact in the West.

• Interactive entertainment, sports and entertainment laws also relevant

• Some examples follow…Image credit: Uber, Facebook, Google (obviously)

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Employment/labour law

• Whether a player is an employee or contractor is a test of substance, not form.

• Employees have substantial rights under EU and other international laws, e.g.:

• Restrictions regarding dismissal• Working hours• Health and safety (personal injuries?)• Holidays, sick leave, paternity/maternity leave• Pensions!

• In many countries, there are special rules for ‘sports’ players.

Image credit: designhealth.com (link)

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Tax and moneyz

• Taxes: income, corporation, employment, even VAT.

• Country-specific sports taxes/levies/government contributions (?)

• But also opportunities: tax incentives, public and charitable funding, access to finance.

Image credit: thecommentator.com (link)

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Advertising and marketing

• Again, no international consistency.• Brands will expect to see regulatory compliance…but is there any for eSports?

• FTC (USA) and ASA (UK) guidance on vlogging (and streaming?)

• Brands and new sponsors will also expect to do deals in their usual way. Will that work?

Image credit: themetapicture.com (link)

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Gambling

• No international consistency.• Within EU, UK most friendly. Complex in many other countries. US model under threat (?)

• eSports gambling regulation and regulators.

• Real direct/indirect costs.• But the opportunity…?

Image credit: onlinepoker.net (link)

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Other important issues

Examples where there may be considerable regulation affecting eSports:• Broadcast rights• Immigration• Integrity issues• Intellectual property protection• Data privacy• Consumer affairs• Competition/anti-trust• Child/youth protection

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A few open legal questions

• Who will own broadcast rights in the next big eSport?• Will eSports be considered a ‘sport’ by governments? Is that good/bad?• Are players employees or contractors of their team?• Are transfer fees and penalties in player agreements enforceable?• How will the looming exclusivity war play out?• When will we see our first big eSports lawsuit?• How should eSports be regulated?

Thanks!

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........................................................E: jas@purewalandpartners.comW: www.purewalandpartners.com

T: @gamerlaw........................................................