How Visa Issues Combined with Recent Franchising Agreements Effect Current Esports Players and the Future Landscape of Esports

 How Visa Issues Combined with Recent Franchising Agreements Effect Current Esports Players and the Future Landscape of Esports

By

Kyle Kenny*

On June 20th, 2016, LeBron James led the Cleveland Cavaliers to an NBA title against the Golden State Warriors during the highest-rated NBA finals in 18 years.[1] The NBA finals were watched by over 31 million viewers. [2] Yet, more people tuned in to watch the League of Legends World Championship than did to watch James hoist the NBA trophy.[3]

I. An Introduction to Franchised Esports: The Future of Entertainment

Should you feel so inclined, type “lol” into Google and see what search result it brings about. Obviously the result will be “laughing out loud,” right? Wrong.[4] The result will be League of Legends, the most popular video game in the world, with over 100 million monthly active users.[5] The amount of people currently playing and watching League of Legends, the premier game in the esports industry, shows the potential for the industry as a whole.[6] However, though the industry is one of the most promising in the world it does not come without its fair amount of future challenges.

League of Legends recently announced that they would be franchising the North American Champion League Series (“NALCS”) starting in 2018.[7] This move creates a more stable revenue stream for many involved with League of Legends, but it is unclear if this is the best path forward for those involved in esports. As part of the NALCS franchising agreement, essentially the first players’ union is being created in esports, though the term “union” is entirely absent from the franchising agreement.[8] The “Players’ Association” an independent association represented by a representative. The representative is chosen by the players, but recommended by Riot Games, the developer of League of Legends. The Players’ Association raises interesting legal questions. Though on the surface it appears to be a step in the right direction for players’ overall protection, such an agreement may not be the best option for players.

In this Comment, I will discuss various issues that the emerging esports industry imposes. This will range from issues that are currently affecting players, such as visa issues, to issues that are on the horizon as esports continues to expand in size and demographic. Current international players are having trouble obtaining visa to enter into the United States to compete in tournaments and esports leagues. While not immediately apparent, the franchising agreements like that of the NALCS, could be the next step in the solution for the visa issues currently affecting many esports players.

Additionally, the franchising of major esports games such as Overwatch and League of Legends could potentially change the current economic model of esports. Franchised leagues will have to balance the challenges associated with reaching a new age demographic without alienating the majority of their current age demographic. However, advertising and viewing strategies pertaining to esports, may be influenced by new companies entering into the franchise scene. This may eventually lead to a slower growth of the esports industry as a whole.

Finally, with various countries around the world entering into government ran esports organizations and an international esports organization called the IeSF (“international e-sports federation”)[9], the United States must decide whether it wishes to join the IeSF or the let the United States government get involved in esports. The decision ultimately hinges on the need for regulation in the esports industry versus developers retaining autonomy of policing their own games.[10]

II.  If You’ve Never Heard of Esports … GG.[11]

 

found via (https://www.youtube.com/watch?v=BdMge3QA4DI)*

Esports (“electronic sports”) is essentially professional video gaming. Players compete against other players in leagues established by the developers of the game being played.[12] Various esports teams are owned by former professional sports players such as Magic Johnson and Rick Fox, current owners including billionaire Robert Kraft, the owner of the New England Patriots, and many other household names.[13] Some sponsors of esports include Coca-Cola, Amazon, McDonalds, and Red Bull, just to name a few.[14]

Surprisingly for many, esports don’t differ from traditional sports in many ways when it comes to viewing. Before any match begins there are analysts who talk about what to expect from the teams playing in the game, often highlighting key players. The matches are covered by “shoutcasters,” who are the announcers of the game, that often shout the most active parts of any video game match.[15] Additionally, there is also a post-match analysis, highlighting key moments of the match, and showing replays of key plays.

Even though 20,000 fans were cheering on their favorite team in-person from a sold out Staples Center during the finals of the League of Legends World Championship[16], most of the time esports are viewed online.[17] Most live-viewers come courtesy of Twitch, a popular streaming website, dedicated almost exclusively to video games. To put its viewership in perspective, Twitch holds the 4th highest peak web traffic of any website in the United States, behind only Netflix, Google, and Apple.[18] Additionally, recorded videos are often available on YouTube shortly after the live-stream for viewers who missed the stream or wish to watch a certain match again.

Currently, the most viewed esports games tend to be MOBAs (“multi-player online battle arenas”), including League of Legends, DOTA 2, and Overwatch.[19] MOBAs put teams of players, usually five, against one another, with each player selecting a unique in-game character that has unique abilities. The teams then work together to take or destroy the main structure in the enemy team’s base, referred to as the “nexus” in League of Legends for example.[20] League of Legends and Dota 2, both MOBA games, are played by the 40 highest paid esports athletes, with top earner Saahil “UNIVeRSE” Arora, having career earnings of nearly $3 million.[21] Alternatively, popular games FPS (“first-person shooter”) games such as Counter-strike Global Offensive and Call of Duty, still retain a fair chunk of esports viewership.[22]

As it turns out, playing video games professionally to make a living isn’t always the luxury lifestyle the public perceives it to be, despite the certain player’s huge salaries and tournament winnings.[23] Professional gamers often live together in a house, termed a “gaming house,” and often practice over 12 hours a day, as many as 7 days a week.[24] Professional gamers often have a strict eating and practice schedule, akin to traditional sports.[25] Additionally, they and have to travel to different states or countries for tournaments just like traditional sports players.[26]

A.  How League of Legends Has Changed the Game

Riot Games changed the landscape of the entire video game scene since it introduced League of Legends in 2009. League of Legends is the first game to change the economic model of video games around the world. Specifically, by being free-to-play, where the purchasable in-game content does not give players any relevant advantage during the game, but instead serves almost exclusively as aesthetic options for players. Purchasable “skins,” which are allowed in all game modes of League of Legends, including esports tournaments, allow players to change their in-game character’s appearance, and in many cases abilities as well.[27] Almost all other developers charge consumers a fee to buy a playable copy of the game upfront, or are free-to-play, but in-game purchases provide players with significant advantages, often referred to by gamers as “pay-to-win.”[28] A prime example is Hearthstone, a popular competitive online card game, developed by Blizzard Entertainment. Players can spend real money on “packs,” allowing them to obtain rarer, more valuable cards, often giving them a significant advantage in-game, essentially making the game pay-to-win.[29]

Despite there being a plural at the end of Riot Games, League of Legends has been the only really relevant title released by Riot.[30] Though, there are different game of modes of League of Legends, the competitive map Summoner’s Rift, accounts for the vast majority of gameplay.[31] So one might ask themselves, how can a single game, primarily played a single map, hold such interest and have such exponential growth over the past 11 years? The answer is largely two-fold. First, Riot is constantly changing the meta-game (“meta”), involving newly developed in-game characters (“champions”), updates to old champions, and item changes amongst other things.[32] Second, Riot makes changes to Summoner’s Rift every season.[33]

Riot’s free-to-play model has enabled it to be the key figure in modern video gaming because it has amassed so many users.[34] Because of its large viewer base Riot has been able to make substantially more revenue than many other games off of in-game purchases. Additionally, Riot games has been able to secure deals with many streaming and mobile companies. [35] The model demonstrated by Riot Games is important to understand because it is the current model looked to by developers branching out into esports. By developers keeping the cost of the game itself low, developers are able to sell in-game content for primary revenue, allowing them to amass large numbers of users. This in turn gives the developers a massive numbers of players who are more likely to view the esports broadcasts related to the game, often viewable through the game’s client.

B.  How Will Franchising Work?

Riot Games has comprised eight different leagues across different leagues across different geographical areas, with the LPL, NALCS, LCK, and EULCS representing the four biggest regions China, North America, Korea, and Europe respectively.[36] Prior to franchising, teams in the leagues would play two-splits per year, one in the summer and one in the spring.[37] At the end of each split the bottom two teams, in terms of points, would face off against the winners of the “Challenger Series,” a league for up and coming teams.[38] If the teams currently part of the league won a best-of-five, they would retain their spot in the league, if they lost the challenger team would take their spot.

Despite its growth from a small start-up, Riot Games’ revenue stream has been somewhat inconsistent, especially when it comes to running its esports leagues.[39] Until this year, esports have operated at a net loss for Riot Games. Focused around expanding viewership and player experience, the initial goal of esports was not centered around revenue. As CEO’s Beck and Merrill turn their efforts back to game developing, Riot Games has decided to opt to franchise the NALCS in 2018, indicating that Riot may have turned its goals into profiting off its massive esports following.

Riot will charge a $10 million fee for each team to join the NALCS and have a more stable economic model for investment.[40] Riot also retains the power to accept or deny a team’s application from the league.[41] One key difference in the LCS model will be an extremely diminished risk of relegation for teams involved in the NALCS. A team can only be relegated if they finish ninth or tenth, in five out of eight splits, thus guaranteeing teams four years in the LCS at minimum.[42]

Player’s salaries under the new agreement will be increased to mandatory minimum of $75,000.[43] All salaries to players are guaranteed. Additionally, players may earn additional earnings if the player’s league share, equating to 35% of league revenue split amongst all players, is greater than a player’s salary.[44] In that case the player will receive the differential between the league share, and the player’s salary directly.

The Players’ Association, funded by Riot Games, is by far the biggest development of the League of Legends franchise agreement. The independent association is headed by a representative selected by the players, recommended by Riot Games. Though the Players’ Association is not referred to as a union, it operates like one. One key difference is that negotiations a tri-layered between the players, owners, and Riot.[45] This marks the first unionization of players in esports in the United States.[46] The result is that even though the Players’ Association lacks the power to collectively bargain, there could be hold outs for the first time in esports.

In Overwatch, the franchised Overwatch League (“OWL”) has a $20 million fee to join the OWL and will feature certain international teams.[47] Currently there are 12 teams in OWL, including teams from London, Korea, and China.[48] Under the current scheme, teams’ retain all revenue from home site esports sales and merchandise sold through the teams’ websites.[49] Skins and viewership sales are distributed to all teams at the end of the year.[50]

https://www.youtube.com/watch?v=Qb1UZKmjHBo

found via (https://www.youtube.com/watch?v=Qb1UZKmjHBo)*

Before discussing how the franchising agreements in esports will affect current players the following issue needs to be addressed: whether or not the Players’ Association violates the National Labor Relations Act (NLRA). Section 8(a)(2) of the NLRA forbids the “establishment and control of a company union.”[51] Riot Games has categorically denied that its funding of the Players’ Association constitutes a union.[52] Instead, they claim that the Players’ Association is multi-functional and that the players are employed by the teams themselves, not by Riot Games.[53]

However, William Gould, of Stanford University and an expert in entertainment and sports law, states that Section 8(a)(2) applies to labor organizations, not unions, thus putting Riot at risk of violating the statute.[54] Additionally, Section 8(a)(2) states that an employer is not allowed “to dominate or interfere with the formation or administration of any labor organization or contribute financial or other support to it.”[55] This is a problem as well because Riot Games has offered to support the Players’ Association financially, in its entirety. [56]

However, as of yet, there have been no claims filed by any parties involved that the establishment of the Players’ Association violates any provision of the National Labor Relations Act. Therefore, it assumed that the structure of franchising agreement regarding the NALCS does not violate the NLRA going forward and will remain in effect going forward.

III. The Visa Debate: Are Esports Players Athletes or Just Glorified Video Game Players?

In 2013, Riot Games was able to successfully negotiate the first P-1A visa for an esports player, thus recognizing an esports player as an athlete for the first time internationally.[57] This was a huge breakthrough for the esports community which had been, and continues to deal with the problem of visa recognition for its players. Even though Riot negotiated the first successful visa in 2013, each P-1 visa is evaluated individually on the merits. Therefore, the United States Customs and Immigration Service (“USCIS”) has been inconsistent when it comes to granting gamers visas.[58] P-1A visas require an athlete, individual or as part of a team, to be performing at a specific athletic competition at an internationally recognized level of performance.[59] The crux of the issue relies on the reluctance of the United States Citizenship and Immigration Service (“USCIS”) to classify an esports player as an “athlete” for visa purposes.

To obtain a P-1A visa, an individual must: (1) play as an athlete at “an internationally recognized level of performance,” (2) be a professional athlete, (3) play as an athlete or serve as a coach of a team in the United States and “a member of a foreign league or association of 15 or more amateur sports teams,” or (4) perform as a professional or amateur athlete either individually or with a group “in a theatrical ice skating production.”[60]

There are many credible arguments for classifying esports players as athletes, making them eligible for the P-1A visa. The first is that esports players are athletes with “an internationally recognized level of performance.” Multiple arguments can be made that certain esports players fall within this category: there are various international tournaments that esports players compete in, with prize pools over $5 million dollars and [61] the League of Legends 2016 World Championship was broadcast to over 23 countries.[62] Additionally, in 2022, esports will be a medal event at the Asian Games.[63]  By placing esports along with traditional physical sports, China is implicitly recognizing that esports players are athletes.[64]

Another argument is that in other parts of the world esports players are considered “professional athletes.” First, is the fact that video games themselves require incredible reflexes to play competitively at the professional level.[65] The esports players average 400 movements on the keyboard and mouse per minute.[66] The amount of strain required to do so is more strain than a professional table tennis player endures.[67] The average pulse rate of 160 to 180 beats per minute displayed by a professional gamer can be compared to that of a marathon runner.[68] However, in fact, the definition of professional athlete mentions nothing about physical requirements, even though it is likely that many gamers could meet them.[69]

Additionally, the definition required to be a professional sport requires you to be part of a sports league with at least six teams, who’s combined revenues exceed $10,000,000.[70] There can be an argument made the esports players in certain leagues may not be able to meet this requirement, in smaller regions across the world. However, it almost certain that players who are part of the NALCS and other large leagues or the newly formed Overwatch League can easily meet this threshold.[71]

On the surface it appears that esports players qualify for P-1A visas. It appears then that the primary reason visas aren’t being consistently granted to esports athletes deals largely with reluctance by a portion of society to recognize esports players as athletes. This may be due to a societal perception of esports players being teenagers, but this really is not the case, as depicted below.

 

Figure 1.1[72]

 

Traditional Sport

Average Age

Major League Baseball

29.2

National Hockey League 27.4
National Basketball Association 26.8
National Football League 26.6

 

Esports Average Age
Super Smash Bros. Melee 25.2
Counter Strike: Global Offensive 23.4
Super Smash Bros. WII U 23.2
Starcraft II 23.0
League of Legends 21.2

 

A.  P-1A Visas: Why Esports Athletes Are Relying on them.

There are various categories of visas that may loosely apply to esports players outside of the P-1A visa. The B-1 visa, granted to temporary business visitors, is often looked at as the second best option for esports players.[73] The B-1 visa allows esports players to stay for one to six months, with an extension period of up to one-year in the United States.[74] This option is potentially viable for athletes looking to compete in tournaments the United States. Esports players have in fact relied on the B-1 visa in the past.[75] However, due to the fact that esports players are salaried and competing for large sums of money, they should not rely on the B-1 visa unless they have absolutely no other option.[76] It is clear that by entering to the United States to play in a league or tournament they are violating the purpose of the B-1 visa, potentially leading to future denial when trying to reenter the United States.[77]

Similarly, esports should not rely on the Visa Waiver Program (“VWP”) for similar reasons. The VWP applies to the members of 35 designated countries, allowing them stays of up to 90 days in the United States.[78] However, the purpose of the VWP is listed as either tourism or business.[79] The tourism provision allows for participation in sports, but prohibits being paid for doing so.[80] Because tourism clearly does not apply to esports players, they would be forced to rely on the business purpose of the VWP. However, such a provision only applies to short-term training or other education purposes. It is important to note that under both the B-1 visa and the VWP, a player could enter into the United States to negotiate a contract for a P-1 visa.[81] In contrast, the B-2 visa is not an option to esports gamers at all, as it is only granted for “pleasure.”[82] By being paid to perform in tournaments or salaried, professional esports players would clearly be violating the B-2 visa and cannot enter to negotiate a contract either.[83]

The H-1B visa likely does not apply to current esports players seeking visa relief because of the educational specialty of the visa. The H-1B visa requires international esports players to be pursuing a “specialty occupation,” in order to obtain admission into the United States.[84] This specialty occupation must be related to a “body of highly specialized knowledge” or requires the person applying for the visa to be pursuing a Bachelor’s Degrees related to the occupation.[85] Few esports players possess bachelor’s degrees due to the average age of gamers being relatively young and it hard to see how professional gaming could require specialized knowledge.[86] Therefore, the H-1B visa is almost certainly not a viable option for international esports players.

Finally, the O-1A visa could be an option for certain esports athletes, but rests on the same assumption as the P-1A visa of esports players being athletes.[87] The O-1A visa is only awarded to athletes with extraordinary abilities.[88] This could be a potential visa for players who have won a championship in one of the major game tournaments.[89] For example, Lee Sang-hyeok, otherwise known as “Faker,” is the one of the most famous people in Korea due to his accomplishments in League of Legends.[90] Ultimately, the only long-term option for esports players appears to be the P-1A visa.[91]

IV.  How will Franchising Effect Current Esports Players?

A.  Franchising: The Potential Cure for Esports Players’ Visa Woes

The franchising of esports could prove to be a solution to the P-1A visa problem in a few ways. For example, the establishment of the Players’ Association in League of Legends, while technically not deemed a union, essentially acts as one.[92] This is important because it further legitimizes esports players as employees, rather than independent contractors in terms of public perception.[93] The fact that teams now represent regions and cities, for example the “Dallas Fuel” of the OWL is yet another shift of the view that esports players are independent contractors.[94]

Additionally, the franchising of League of Legends and Overwatch further increases the prospect that esports could make an appearance at the 2024 Olympic games.[95] One of major setbacks for esports making an appearance at the games was the lack of regulation of esports, particularly in the United States. If more leagues begin to franchise, it increases the chance of United States government association.

In addition to the prospect of making an appearance at the 2024 Olympic Games, as esports begins to expand further, it will become harder for people to argue that esports players do not classify as “athletes” for the P-1A visa.  This will largely involve a changing societal attitude towards esports.[96] One key development that may change the current societal attitude towards esports, is exposure to a new demographic unfamiliar with esports.[97] The primary way in which this would occur would be through telecast on popular channels such as ESPN or major cable networks.[98] The new franchise agreements bringing in big name sponsors makes this a likely reality in the future.

Second, esports franchising is likely to bring in more advertising from more sponsors, leading to an overall increase in revenues across leagues.[99] By doing so, players can easily meet the $10-million-dollar minimum required to be recognized as a professional athlete. More relevant, the more professional esports players become part of a league as part of the franchise model.

Finally, as more wealthy owners enter the esports market, the greater the chance that Congress can be lobbied to change the USCIS regulations pertaining to the P-1A visa.[100] A political reality of the United States is that House and Senate members almost always run their election and reelection campaigns using money donated from lobbyists or PACs.[101] As owners with more fame and deeper pockets enter the scene, it is likely that Congress could be lobbied to amend the definition of an athlete under the USCIS regulations should P-1A visa issues continue to plague esports.

B.  How Franchising Changes the Economic Esports Model

One of the biggest factors in the growth of esports over the past few years has been free access to viewers. That all may change with the franchise agreements in esports. Specifically, when it comes to viewing content on Twitch and YouTube, which has been available on-demand, with little to no advertising.[102] It’s hard to imagine a world where teams are paying $10 million dollars just to reserve a seat in the NALCS, and aren’t looking to extend revenue through advertising. The result could likely be a deal through Twitch’s service “Twitch Prime,” or through a television contract with ESPN, who has been interested in esports as of late. [103]

Many think that franchising agreements in esports will lead to an esports association being formed in the United States.[104] The associations primary function would be to standardize the way in which all developers conduct their esports leagues. The association would be responsible for creating standard employment provisions and standard broadcasting of esports leagues.[105] This would largely involve the hosting of multiple tournaments at a single venue or creating a network similar to that of Major League Gaming (“MLG”).[106]

Because esports are not joint-venture,[107] they do not have access to the antitrust laws of the Sports Broadcasting Act of 1961’s “pooled broadcasting rights”.[108] This would create problems should an association for esports ever be created and wish to televise esports as package deal for any channel. Because esports are not joint-venture, developers would have to individually sell broadcasting rights for each game.[109] This is a problem because the competing interests of capturing an audience will likely lead developers to stray away from selling rights to any television company that is currently broadcasting another esports league.  The result is that esports will likely never be sold as a package deal to any network.[110]

Even if an esports network were a feasible option, such a change may have a dispositive effect on the growth of esports. Asked about why it abstained from franchising the LCK in South Korea, a spokesman  for the LCK said that he was worried about alienating their unique demographic.[111] He may be right. The primary viewers of esports tend to be between ages 18-34 and primarily male viewers.[112] This is a demographic that is highly sought after by practically any company. However, it begs the question if investors understand how to conform to this unique demographic, or whether they will attempt to expand to a demographic that may be unobtainable.[113] One of most important characteristics that currently fuels the expanding esports demographic currently is free access to viewing content.[114]

Given the current trend in the United States of consumers now favoring streaming services over cable television, a move to cable seems unwise.[115] The medium in which esports is telecast is irrelevant so long as it is free and accessible. This is premise that will likely be overlooked or simply ignored as franchising in esports begins to expand. Investors and sponsors will see the opportunity to expand to a larger demographic, while at the same time looking to expand revenue through broadcasting.[116] Such a move is risky, and likely to do more harm than good. For the risk is alienating the prime demographic that esports already has, while potentially failing to capture a new audience in the process. However, given the recent repeal of net neutrality by the Federal Communications Commission[117], streaming services such as Twitch may be targeted by internet providers.[118] There is a chance that due to their heavy consumption of bandwidth, Twitch, YouTube, and other popular websites for streaming may have their bandwidth limited or up charged by providers.[119] If this were to be the case, franchised leagues pursuing broadcasting options may end up being a better option after all.[120]

C.  Big Brother is always watching

Franchising agreements are another step that increases the likelihood that the United States government will look to get involved in policing esports. The government will be primarily concerned with the structure of esports leagues, the distribution of income, and the control that developers have over gamers.[121] When Riot Games and Blizzard decided to franchise over the past year, it was an obvious attempt to expand esports, but also an effort to evade government intervention in esports.[122] This is likely because they see government involvement as a hindrance to the growth esports.

Three countries have or have attempted to create esports associations involving some government regulation. There are currently esports associations that govern in South Korea, The Korea E-Sports Association (KeSPA), and in China, The Association for Chinese Esports (ACE).[123] Additionally, the United Kingdom launched an esports association in 2008 called UKeSA, that ended up filing for bankruptcy the the next year.[124]

By most accounts the esports associations have been failures. UKeSA filed for bankruptcy while owing many entities large amounts of money.[125] KeSPA, had to have Riot Games intervene to provide better welfare for esports players, including minimum contracts and 1-year contract guarantees.[126] Though, overall KeSPA has had some success involving negotiating broadcasting rights in Korea, many believe the organization is not making as much money as it would like to.[127] ACE is renowned for providing terrible working conditions for its esports players.[128] The failures of these associations lends to the realization that governmental regulation may not be a good option, or if it is, the enforcement mechanisms need to be more stringent that the current associations. [129]

1.   Why the government should stay out of esports

If the United States government decides to get involved in esports, such a change needs to be made is either by direct legislation or making esports part of a federal agency.[130] Direct legislation would likely be a problem given the fact that esports are based almost entirely online.[131] Legislation in the United States legal system has historically struggled with online regulation.[132] Additionally, new games are being developed almost daily, and unlike traditional sports, popular video games change rapidly.[133] This means that the needs of regulations could change as new games could bring in new challenges, given the various types of games in the market.[134]

Esports at this point, clearly generates enough revenue to capture the attention of the government.[135] However, the obvious issue that developers are concerned about regarding government intervention about is surrounding the contracts of esports players. Prior to the franchising agreements, players did not receive any portion of the revenue generated by the esports leagues.[136] The first thing that the new franchise deals do is increase the distribution of wealth amongst players generally, but also increase the portion of revenue that players and teams receive from the developers.[137] Revenue sharing concerns were main reason that most people were calling for government intervention in esports to begin with. If players are getting portions of the revenue made from the leagues they play, guaranteed by contract, there is little need for the government to get involved in area that know little about.

Further, it can be argued that the esports industry is doing a good job of policing itself without any government regulation. The NALCS for example, was able to guarantee minimum player salaries and minimum contracts through Riot Games, something that KeSPA, a government association, was unwilling to do.[138] Additionally, developers themselves often do a good job of policing their games for bugs, hackers, and cheaters.[139] This is because these issues are likely to affect gameplay quality, leading gamers to find other games to play if the issues are left unaddressed.  Additionally, Riot Games has been policing their game for gamers who have been doping using ADHD drugs like Adderall to gain a competitive advantage.[140]

2.   Where Minimal Government Involvement May be Required

If there is an area that may be in need of governmental intervention in the future, it would be match fixing though it has yet to become a huge problem in esports.[141] Match fixing is essentially losing on purpose for a bribe or changing the result of a match.[142] However, a coalition has already been formed to combat potential match fixing, called the Esports Integrity Coalition (“ESIC”).[143] Ian Smith, who heads the coalition, has voiced him opinion that the only real concern for esports is match-fixing.[144] However, in his opinion, the government should not get involved in regulating esports because the industry does not need such regulation.[145]

Another potential area where government should get involved in with esports, is if net neutrality limits the bandwidth of esports players or their streams. Because esports players’ income is directly tied to the games they play that take up large amounts of bandwidth, the government would have to get involved in order for players to fulfill the obligations under their contracts.[146] Because the integrity of the esports industry would be on the line, this would likely be viable grounds for government intervention.

Additionally, many teams are owned by company’s cable and internet companies[147], with various competing interests. For example, limiting broadband speeds to a competitor’s esports team could be unfair competition.[148] Similarly, a viewing platform such as Twitch might have a claim against cable companies if they were take some similar action. For similar reasons as the match-fixing issue, government invention would be warranted should the repeal of net neutrality affect the esports industry negatively in this regard.

V. In Conclusion

The recent franchising agreements in esports, particularly those of League of Legends and Overwatch are likely to change the landscape of esports as we know it. First, the franchising of esports gives players and the industry more credibility overall. This is likely to help with visa issues that many professional players who are trying to enter into the United States are facing. The P-1A visa that has been issued sporadically to international players, should be awarded with more consistency as esports becomes more accepted as a sport by society. If international esports players have access to the P-1A visa by being given status as an “athlete,” they should have no issue entering the United States in the future.[149]

Second, is that franchising agreements will likely have an impact on the economic model of the esports industry. By franchising leagues, developers are creating a more stable revenue stream for all involved in the esports industry. Players will have more certainty by receiving guaranteed salaries and a lower chance at losing their spot on a roster due to relegation. Players and owners will receive shares of the league revenues, which are likely to grow as developers will have further incentive to promote the esports scene. However, this assumption rests on the premise that owners and developers do not alienate that viewer base by charging for viewership through either internet or cable.[150]

Additionally, short term stability in the esports industry might come at a cost of stimming growth of the esports industry.[151] As you have more guaranteed esports teams, there is less incentive for young gamers to form new teams with the goal of entering into the esports.[152] Instead, these gamers will likely look to join existing professional teams, potentially leading to esports leagues that features similar players every year.[153] Unlike in professional esports where there is a televised collegiate division[154], these players can only gain national exposure through Twitch or other streaming services. The net result is that emerging gamers will likely be attracted to newly developed, emerging games, thus leaving competitive leagues in established games stagnant.[155]

Finally, the government should not get involved in the policing of esports. There are two primary reasons that government regulation would be useful to solve: visa issues related to international players and labor rights for employees.[156] However, as referenced previously, the recent franchising agreements are likely to take care of both of these issues, without any government involvement.[157] Therefore, government regulation would do more harm than good, hurting the economic market in esports by flooding it with regulations that are unnecessary. Complications are likely to arise because unlike traditional sports, developers retain intellectual property rights in relation to the esport associated with their games.[158] Further, for the most part, international esports organizations have been underwhelming. Government intervention will only be needed if match fixing or the repeal of net neutrality begin to significantly affect the esports industry. However, as of yet, there is little evidence that these issues pose significant problems to the esports industry as a whole.

In the end, it is an exciting time to be involved in the esports market. The industry is experiencing rapid growth, more growth than any other industry in the world. At its current growth rate, the esports industry is poised to rival, if not surpass traditional sports in viewership and player rate.[159]  Though there are challenges ahead for esports, these challenges are best left to developers themselves and esports may be the next big thing in modern society.

 

* Kyle Kenny, Managing Editor of Digital Content for the Journal of International Affairs, Candidate for J.D., 2019, The Pennsylvania State University School of Law.

[1] Alex Walker, More People Watched League of Legends Than the NBA Finals, KOTAKU (Jun. 21, 2016, 2:30 PM), https://www.kotaku.com.au/2016/06/more-people-watched-league-of-legends-than-the-nba-finals/.

[2]  Id.

[3] See id. (explaining that over 36 million viewers tuned into watch the League of Legends World Championship in 2016, compared to 31 million for the NBA finals).

[4] Robert Elder, Esports Is Far from Fulfilling Its Revenue Potential, But It’s growing Steadily, BUSINESS INSIDER (May 10, 2017, 11:11 AM), http://www.businessinsider.com/esports-is-nascent-but-growing-steadily-2017-5 (typing “lol” into Google renders the top result as “League of Legends”).

[5] Tim Mulkerin, With Over 100 Million Active Users, this is Officially the Biggest Game in the World, BUSINESS INSIDER (Sep. 13, 2016, 3:25 PM), http://www.businessinsider.com/lol-league-of-legends-monthly-active-users-2016-9.

[6] See id. (discussing the potential of esports revenue from advertising exceeding $1 billion by 2021).

[7] Eric Van Allen, Riot Games is Franchising its North American League at $10 Per Spot, COMPETE (Jun. 1, 2017), https://compete.kotaku.com/riot-games-is-franchising-its-north-american-league-at-1795719652.

[8] See Evolution of the NA LCS, LoL Esports http://www.lolesports.com/en_US/articles/evolution-of-the-na-lcs (citing no mention of the term union when referring to the Players’ Union).

[9] See INTERNATIONAL E-SPORTS FEDERATION, http://www.ie-sf.org/iesf/ (last visited Oct. 13, 2017) (listing 48 nations as part of IeSF).

[10] George S. Pavlik, Leveraging Intellectual Property Rights in Esports Can be Critical Success, LEXOLOGY (Jun. 15, 2016), https://www.lexology.com/library/detail.aspx?g=3b3ba15e-05c0-4100-98a7-01eb03e6e9b4 (stating “IP associated with the content, characters and gameplay of a particular eSport game is generally owned by the game developer as original creator of the game”).

[11] See Saira Mueller, Gaming Glossary: What do GG, GLHF, LAN, MMR, OOM, OP, Ping, and Other Gaming Terms Mean?, INTERNATIONAL BUSINESS TIMES (Sep. 14, 2015, 2:32 PM), http://www.ibtimes.com/gaming-glossary-what-do-gg-glhf-lan-mmr-oom-op-ping-other-gaming-terms-mean-2095970 (explaining that  GG is a term used at the end of a competitive game, meaning “good game”).

[12] Brett Molina, Why Watch Other People Play Video Games? What you Need to Know About Esports, USA TODAY (Jan. 12, 2018), https://www.usatoday.com/story/tech/news/2018/01/12/more-people-watch-esports-than-x-dont-get-here-basics/1017054001/ (explaining various existing leagues of esports including Overwatch, League of Legends, and Call of Duty).

[13] See, Pete Volk, Magic Johnson, Other NBA Figures Purchase Esports Franchise Team Liquid, RIFT HERALD (Sep. 10, 2016, 10:26 AM) https://www.riftherald.com/na-lcs/2016/9/27/13074352/team-liquid-sold-magic-johnson-ted-leonsis-investment-group (descibing Magic Johnson as an investor in aXiomatic, the controlling interest in Team Liquid, and former players such as Rick Fox and Shaquille O’Neal); Roger Groves, Robert Kraft Investment in Esports Telling About Millennial Disaffection with Traditional Sports, FORBES (Jul. 17, 2017, 8:35 AM) https://www.forbes.com/sites/rogergroves/2017/07/17/robert-kraft-investment-in-esports-telling-about-millennial-disaffection-with-traditional-sports/#504e34af347f (describing Robert Kraft as investor in Blizzard’s Overwatch League and quoting Kraft as saying “We believe this is the future.”).

[14] See Darren Heitner, More than 600 Esports Sponsorships Secured Since the Start of 2016, FORBES, (Oct. 3, 2017, 7:00 AM), https://www.forbes.com/sites/darrenheitner/2017/10/03/more-than-600-esports-sponsorships-secured-since-start-of-2016/#792c338875e5 (listing various Fortune 500 companies now currently involved in esports sponsorship).

[15] See Steffan Powell, Shoutcasters: Meet the Voices of Gaming, NEWSBEAT (Feb. 12, 2016), http://www.bbc.co.uk/newsbeat/article/35563213/shoutcasters-meet-the-voices-of-gaming(comparing shoutcasters to announcers of a football game).

[16] See Shadow Li, Rise of Virtual Athletes, CHINADAILY (Jun. 2, 2017, 8:36 AM), http://www.chinadaily.com.cn/hkedition/2017-06/02/content_29587422.htm (describing the Staples Center atmosphere, where the was 20,000 fans, four massive screens displaying the game, and “one of the world’s highest paid Djs”); BBC NEWS, SKT Crowned 2016 League of Legends World Champions, (Oct. 31, 2016), http://www.bbc.com/news/technology-37821864.

[17] See Bradmore and Magus, 2016 League of Legends World Championship by the Numbers, LOLESPORTS (Dec. 6, 2016, 3:00 PM), http://www.lolesports.com/en_US/articles/2016-league-legends-world-championship-numbers (listing 14.7 milliion viewers at peak viewship and 43 million unique viewers watching the 2016 League of Legends World Championship).

[18] See Matthew DiPietro, Twitch is 4th in Peak US Internet Traffic, TWITCH BLOG, (Feb. 5, 2014), https://blog.twitch.tv/twitch-is-4th-in-peak-us-internet-traffic-90b1295af358 (referring to published Wall Street Journal report that Twitch accounted for 1.8% of all U.S internet traffic, making it fourth highest in the United States).

[19] See supra note 7.

[20] See Game modes, League of Legends, http://gameinfo.na.leagueoflegends.com/en/game-info/game-modes/summoners-rift/ (last visited Oct. 13, 2017), (describing the objective of League of Legends as destroying the enemy team’s nexus).

[21] Leo Rydel, Top 15 Richest Esports Gamers in the World, THEGAMER, (Mar. 6, 2017), http://www.thegamer.com/top-15-richest-e-sports-gamers-in-the-world/.

[22] Kellen Beck, ‘Counter Strike’ Match breaks Twitch’s Streaming Record, MASHABLE (Jan. 30, 2017) http://mashable.com/2017/01/30/twitch-viewer-record/#6HZEDjpGLkqr (noting that with over 1 million concurrent viewers, Counter-strike Global Offensive broke the previous record on Twitch).

[23] See Kristine Hutter, ESPN Survey: Average NA LCS Player Salary Approximately $105K, EU Salary 81K, SCORE ESPORTS (Jan. 13, 2017), https://www.thescoreesports.com/lol/news/12728-espn-survey-average-na-lcs-player-salary-approximately-105-k-eu-salary-81-k (reporting average salary in NALCS as over $100,000 and EULCS over $80,000); Bridget A.J Whan Tong, COMMENT: A NEW PLAYER HAS ENTERED THE GAME: IMMIGRATION REFORM FOR ESPORTS PLAYERS, 24 Jeffrey S. Moorad Sports Law Journal 351 (2017).

[24] See Phil Hornshaw, eSports Ain’t Easy: Inside the Everyday Grind of Pro Gaming, COMPLEX (Aug. 3, 2016), http://www.complex.com/sports/2016/08/everyday-grind-of-being-an-esports-athlete (highlighting practice schedule of esports players). Former Halo 5 player Ryan Towey, stated of the practice schedule leading up to the championship, “Twelve hours a day, it was all film, all gaming, all practice,” and “It was seven days a week for over a month.” Id.; Harrison Jacobs, Here’s What Life Looks Like in the Cramped ‘Gaming House’ Where 5 Guys Live Together and Earn Amazing Money by Playing Video Games, BUSINESSS INSIDER (May 5, 2015, 10:40 AM), http://www.businessinsider.com/inside-team-liquids-league-of-legends-gaming-house-2015-4 (showing small gaming house, with five computers in one room and pantry consisting mostly of energy drinks and chips).

[25]  See id.

[26]  See id.

[27] See Champions & Skins, League of Legends, http://na.leagueoflegends.com/en/news/champions-skins (advertising new skins for champions. One example of a skin is for a champion named “Nautilus,” who’s original appearance is similar to a deep sea diver. The skin “Astronautilus” transforms the character into an astronaut appearance).

[28] Daniel Friedman, Is Hearthstone Pay-to-Win? We Find Out, POLYGON (May 9, 2014, 1:00 PM), https://www.polygon.com/2014/5/9/5699178/hearthstone-pay-to-win (acknowledging the argument that by paying money up front, players can “amass arsenals of powerful cards,” which give them an advantage in the short term at minimum).

[29] Compare id. (gameplay advantage when spending real money) with Champions & Skins, supra note 22 (noting no gameplay advantage).

[30] See RIOT GAMES, https://www.riotgames.com/our-games (listing League of Legends as only game on homepage); Paresh Dave, Riot Games has One Title: ’League of Legends.’ And a Decade in, There’s Still no Rush to Release Another, LA TIMES (Sep. 13, 2016, 5:00 AM), http://www.latimes.com/business/technology/la-fi-tn-la-tech-20160913-snap-htmlstory.html.

[31] See Riot Games, supra note 27

[32] See Home, SURRENDER@20 (Jan. 14, 2018), http://www.surrenderat20.net/ (a website that lists changes to League of Legends, including changes to maps, characters, and items that affect how pro teams will be playing the game in the future).

[33] Craig Snyder, Big Changes Are Here In the League of Legends Summoner’s Rift Update, MUO (Nov. 14, 2014), http://www.makeuseof.com/tag/big-changes-are-here-in-the-league-of-legends-summoners-rift-update/ (describing how Summoner’s Rift received a complete visual upgrade, including jungle camps).

[34] See Hunter Amadeus Bayliss, STUDENT NOTE: Not Just a Game: the Employment Status and Collective Bargaining Rights of Professional Esports Players, 22 Wash. & Lee J. Civil Rts. & Soc. Just. 359 (2016) (stating that” League of Legends has seven to ten times as many concurrent users as its next closest rival”).

[35] Pete Volk, Riot Reaches 7-Year, $300 Million League of Legends Streaming Deal with MLB, Disney, RIFT HERALD (Dec. 16, 2016, 12:28 PM), https://www.riftherald.com/competitive/2016/12/16/13728834/riot-lol-streaming-deal-bamtech-mlb (describing Riot’s deal with BAMTech, a mobile streaming company, thorugh 2023).

[36] Esports, About LOL Esports, LOL ESPORTS (Jan. 14, 2018), https://eu.lolesports.com/en/about/about-lol-esports.

[37]  Id.

[38]  See id.

[39]  Pete Volk, Riot: Esports Still Isn’t Profitable and We Don’t Care, THERIFTHERALD Sep. 13, 2016) https://www.riftherald.com/2016/9/13/12865772/lol-esports-profit-money-riot (describing that 2017 was the first profitable year for Riot Games when it comes to esports).

[40] See Evolution of the NA LCS, LoL Esports http://www.lolesports.com/en_US/articles/evolution-of-the-na-lcs.

[41] See id. (talking about the application process and how Riot Games has the final say as to whether a team is allowed into the league or not).

[42] See id.

[43] See Evolution, supra note 39 (stating that the new minimum salary of $75,000 is higher than in previous years in the NA LCS).

[44] See Evolution, supra note 39 (talking about how the revenue split will occur between players under the new franchise agreement).

[45]  Evolution, supra note 39

[46] See Dave, supra note 27

[47] Darren Heitner, Full 12 Franchises Announced for Initial Overwatch League Season, FORBES (Sep. 20, 2017),https://www.forbes.com/sites/darrenheitner/2017/09/20/full-12-franchises-announced-for-initial-overwatch-league-season/#39c019df2c65

[48] Id. (listing OWL teams such as the “London Spitfire,” “Seoul Dynasty,” and “Shanhai Dragons”)

[49] Ben Barrett, Overwatch League Teams, Structure, Schedule, and Everything Else We Know, PCGAMESN (Jan. 12, 2018), https://www.pcgamesn.com/overwatch/overwatch-league-teams-cities-dates#OWLBlizz.

[50] See id.

[51]  See Interfering with or dominating a union, National Labor Relations Board, https://www.nlrb.gov/rights-we-protect/whats-law/employers/interfering-or-dominating-union-section-8a2 (listing criteria that violates Section 8(a)(2) of the National Labor Relations Act); see also 29 U.S.C §§ 151-169.

[52] See Evolution, supra note 36 (the word union is not mentioned once while discussing the franchising agreement); Jack Moore, If They Don’t Want to Get Screwed, Esports Players Should Study MLB History, COMPETE (Jun. 22, 2017), https://compete.kotaku.com/if-they-dont-want-to-get-screwed-esports-players-shoul-1796302921 (stating the Riot Games employee claimed that the Players’ Association is not a union, but a “professional association”).

[53] See Moore, supra note 51

[54] See Moore, supra note 51 (relaying William Gould’s thoughts about the NLRA’s applicability to the Player’s Association and stating that he thinks “this ‘association’ would be covered under the statute”).

[55]  See Interfering, supra note 42 (quoting Section 8(a)(2) of the act)

[56]  See Evolution, supra note 39

[57]  Paul Tassi, The U.S Now Recognizes eSports Players as Professional Athletes, FORBES (Jul. 14, 2013), https://www.forbes.com/sites/insertcoin/2013/07/14/the-u-s-now-recognizes-esports-players-as-professional-athletes/#269195fb3ac9.

[58]  Id.

[59]  See Immigration and Nationality Act, 8 U.S.C §1184 (c)(4)(A).

[60]  See Tong, supra note 23 (quoting the requirements for a P-1A visa); Immigration and Nationality Act, 8 U.S.C §1184 (c)(4)(A).

[61] Imad Khan, Dota 2’s The International 7 Breaks Esports Prize Pool Record, ESPN (Aug. 2, 2017), http://www.espn.com/esports/story/_/id/19861533/dota-2-international-7-breaks-esports-prize-pool-record (noting that prize pool in Dota 2 went to a record $23,325,687 in 2017); Leo Howell, 2016 League of Legends World Championship Prize Pool at 5.07M with Fan Contributions, ESPN (Oct. 29, 2016), http://www.espn.com/esports/story/_/id/17919126/2016-league-legends-worlds-prize-pool-507m-fan-contributions.

[62] Esports, 2016 League of Legends World Championship by the Numbers, LOLESPORTS (Dec. 6, 2016), http://www.lolesports.com/en_US/articles/2016-league-legends-world-championship-numbers.

[63] Bryan Armen Graham, Esports to be a Medal Game at 2022 Medal Games, THEGUARDIAN (Apr. 18, 2017), https://www.theguardian.com/sport/2017/apr/18/esports-to-be-medal-sport-at-2022-asian-games.

[64] See id.

[65]  Martin Schultz, Science Shows that Esports Professionals are Real Athletes, DW (Dec. 3, 2016) http://www.dw.com/en/science-shows-that-esports-professionals-are-real-athletes/a-19084993; see also Rianne Coale, If You Don’t Think Esports Players are Athletes, Consider This, CHICAgO TRIBUNE (Jun. 21, 2016), http://www.chicagotribune.com/redeye/redeye-esports-athlete-chicago-video-games-20160616-story.html (describing everything from skill required, to diet, workout regime, sleep schedule and pressure as that resembling a professional athlete).

[66] See Schutz, supra note 64

[67]  See Schutz, supra note 64

[68]  See Schutz, supra note 64

[69] See P-1A Internationally Recognized Athlete, U.S CITIZENSHIP AND IMMIGRATION SERVICES, https://www.uscis.gov/working-united-states/temporary-workers/p-1a-internationally-recognized-athlete (using terms “degree of skill,” and “high level of achievement,” but not mentioning physical skill as a requirement); see also 8 U.S.C §1184 (c)(4)(A).

[70]  See Tong, supra note 23

[71] Kyle Wolmarans, This is What 2015s Top 5 Esports Organizations are Worth, CRITICAL HIT (Dec. 8, 2015), https://www.criticalhit.net/gaming/2015s-top-5-esports-organizations-worth/ (Team Solo Mid, one of the teams in League of Legends’ NALCS has a net worth of over $27 million).

[72] ESPN Stats & Info, Average Age in Esports Vs. Major Sports, ESPN (Sep. 19, 2017), http://www.espn.com/esports/story/_/id/20733853/the-average-age-esports-versus-nfl-nba-mlb-nhl( comparing average of traditional sports athletes to that of esports athletes).

[73]  See 22 C.F.R § 41.31(b)(1) (distinguishing temporary employment from permanent employment); Tong, supra note 23

[74] See id (laying down the applicable time period allotted by the B-1 visa to non-immigrants into the United States).

[75] See Mwongera vs. United States 187 F.3d 323, 329 (case featuring a violator of B-1 visa and denied reentry into the United States).

[76] See Evolution, supra note 39 (describing all League of Leagues Players as salaried); see also DOTA 2 Prize Tracker (Feb. 1, 2018), http://dota2.prizetrac.kr (listing past prize pools associated with DOTA 2); see also Tong, supra note 22.

[77] See Tong, supra note 23 (stating that since gamers have pre-arranged salaries, they violate the terms of the B-1 visa).

[78] U.S Visas, Visa Waiver Program, US DEPARTMENT OF STATE (Jan. 12, 2018), https://travel.state.gov/content/travel/en/us-visas/tourism-visit/visa-waiver-program.html.

[79] Id.

[80] Id; 22 C.F.R § 41.31 (listing requirements of the B-1 and B-2 visas).

[81] Compare C.F.R  41.31(b)(1) (stating that a non-immigrant can enter the United States to negotiate a contract and Visa Waiver Program (allowing applicants of the Visa Waiver Program to negotiate contracts) with C.F.R 41.31(b)(2) (negotiating contracts would be in violation of the “pleasure” purpose of the B-2 visa).

[82] 22 C.F.R § 41.31(b)(2) (providing the definition of “pleasure” pertaining to the B-2 visa).

[83] See id.

[84] H-1B Specialty Occupations, DOD Cooperative Research and Development Project Workers, and Fashion Models, USCIS (Jan. 14, 2018), https://www.uscis.gov/working-united-states/temporary-workers/h-1b-specialty-occupations-dod-cooperative-research-and-development-project-workers-and-fashion-models (listing requirements and goals of the H-1B visa). See also id.

[85] See 8 U.S.C. § 1184(i) (listing requirements for “specialty occupation”).

[86] ESPN Stats & Info, Average Age in Esports Vs. Major Sports, ESPN (Sep. 19, 2017), http://www.espn.com/esports/story/_/id/20733853/the-average-age-esports-versus-nfl-nba-mlb-nhl( showing average in League of Legends being 21.2 years old).

[87] 8 C.F.R. § 214.2(o)(1)(ii)(A)(1) (listing requirements of O-1A visa as those aliens with “extraordinary ability in sciences, arts, business, or athletics”). See also Tong, supra note 21.

[88] See id.

[89] See id.

[90] Tyler Erzberger, Esports’ Michael Jordan: the Global Faker Phenomenon, ESPN (Oct. 27, 2017) http://www.espn.com/esports/story/_/id/17901618/global-phenomenon-sk-telecom-t1-faker-esports-michael-jordan (comparing Faker’s achievements to that of other well-known athletes like Michael Jordan and Auston Matthews).

[91] See supra III(A)(a) (explaining why other visa categories are not feasible options for esports players).

[92] See Moore, supra note 51 (quoting William Goulding’s thoughts on the Players’ Association stating, “Any association that involves relationships with an employer over working conditions as well as other aspects of employment is a labor organization within the meaning of the law”).

[93] See supra note 48, (if esports players are found to be employees, not independent contractors they qualify under NLRA).

[94] See Teams, Overwatch League (Jan. 14, 2018), https://overwatchleague.com/en-us/teams

[95] Kevin Tran, Esports in Consideration for 2024 Olympics, BUSINESS INSIDER (Aug. 14, 2017), http://www.businessinsider.com/esports-in-consideration-for-2024-olympics-2017-8.

[96] See Tong; See also Marcella Szablewicz, China’s E-Sports Paradox, SLATE (Mar. 29, 2016), http://www.slate.com/articles/technology/future_tense/2016/03/china_is_a_world_leader_in_e_sports_even_as_the_government_remains_suspicious.html (describing the public’s negative response young people playing video games for long periods of time in China).

[97]  See Bathurst

[98]  See supra

[99] Baldwin Cunningham, Why Esports is the Next Big Thing in Marketing, FORBES (Feb. 25, 2016), https://www.forbes.com/sites/baldwincunningham/2016/02/25/why-esports-is-the-next-big-thing-in-marketing/#7ba64fd03bfe.

[100] Isacc Arnsdorf, The Lobbying Reform that Enriched Congress, POLITCO (Jul. 3, 2016), https://www.politico.com/story/2016/06/the-lobbying-reform-that-enriched-congress-224849 (explaining that Congress is lobbied by more high paying lobbyists than at any time in history).

[101] See id.

[102] See Twitch.tv and Youtube.com (both allow free access to content, occasionally requiring the user to view commercial advertisements).

[103] See Esports, ESPN (Jan. 14, 2018), https://www.polygon.com/2017/2/9/14548880/time-warner-lawsuit-new-york-league-of-legends-netflix (ESPN has a dedicated section of its website dedicated specifically to reporting esports news).

[104] Paresh Dave, World Esports Assn. Seeks to Bring Structure to the Chaos that is E-sports, LA TIMES (May 13, 2016), http://beta.latimes.com/business/technology/la-fi-tn-world-esports-association-20160513-snap-story.html (discussing how WESA was looking to structure esports even before franchising agreements).

[105] See International Esports Federation, supra note 8 (describing the main goals of the IeSF).

[106] Major League Gaming, MLG (Jan. 14, 2018), https://www.mlg.com/.

[107]  See Laura L. Chao, NOTE: “YOU MUST CONSTRUCT ADDITIONAL PYLONS: BUILDING A BETTER FRAMEWORK FOR ESPORTS GOVERNANCE, 86 Fordham L. Rev. 737, 744 (discussing how there are many more actors in esports compared to traditional sports and how the developers have more control).

[108] See id. (describing how joint-venture sports such as the MLB, NHL, NBA, and NFL have circumvented antitrust laws under the section one of the Sherman Act using the Sports Broadcasting Act); 15 U.S.C §1291 (2012).

[109] See id.

[110] See Chao, supra note 67 (discussing how joint-venture sports negotiate package deals for the leagues).

[111] Eoin Bathurst, The Average Age of Esports Viewers is Higher Than You Might Think, Says Gamescape from Interpret, LLC, THE ESPORTS OBSERVER (Feb. 24, 2017), https://esportsobserver.com/average-age-esports-viewers-gamescape/ (indicating that 39 percent of US viewers reside in the 25-34 age range, one of the hardest demographics for companies to reach). See Joe Randall, Riot Korea Dismiss Franchising in the LCK Despite Rumbling in Other Regions, CLICK ON (May 4, 2017), http://www.clickon.co/4103/riot-korea-dismiss-franchising-in-the-lck-despite-rumblings-in-other-major-regions/#.r1515M9675f3538t0 (quoting a Riot Korea Spokesman speaking with Slingshot eSports as stating, “Considering that change should be implemented by keeping in mind the unique environment and characteristics of each region, we do not plan to implement such a plan in Korea in the short term”).

[112] See id (referring to a survey conducted by Business Wire, indicating that 70% of esports viewers in the US are male).

[113]  Pete Volk, Riot: Esports Still Isn’t Profitable and We Don’t Care, THERIFTHERALD Sep. 13, 2016) https://www.riftherald.com/2016/9/13/12865772/lol-esports-profit-money-riot. See Bathurst, supra note 94.

[114] Jurre Pannekeet, ESPORTS, A FRANCHISE PERSPECTIVE: 70% WATCH ONLY ONE GAME AND 42% DO NOT PLAY, NEW ZOO (May 11, 2017), https://newzoo.com/insights/articles/esports-franchises-70-watch-only-one-game-and-42-dont-play/.

[115] See supra note 16 (Netflix and Twitch, both streaming services, rank in top 4 of US websites when it comes to peak internet traffic).

[116] See Cunningham, supra note 89

[117] Cecila Kang, F.C.C Repeals Net Neutrality Rules, NEW YORK TIMES (Dec. 14, 2017), https://www.nytimes.com/2017/12/14/technology/net-neutrality-repeal-vote.html (describing the possibility of business customers being charged more after net neutrality repeal);

[118] Xing Li, The Repeal of Net Neutrality Could Be Disastrous for the Esports Industry, DOT ESPORTS (Dec. 14, 2017), https://dotesports.com/business/news/net-neutrality-repeal-changes-everything-esports-19551#list-1 (stating that Twitch is a candidate that could be effected by the repeal of net neutrality).

[119] Charlie Hall, Time Warner Cable Sued by New York on Behalf of League of Legends, Netflix Customers, POLYGON (Feb. 9, 2017), https://www.polygon.com/2017/2/9/14548880/time-warner-lawsuit-new-york-league-of-legends-netflix (describing past instance in which Time Warner limited connection speeds on users of Netflix and League of Legends in certain geographic areas, rendering the services virtually useless for customers).

[120] See id. (describing how an Internet Service Provider providing slower connection speeds to streaming sites undermines the function of such websites, possibly leading to consumers finding alternative options).

[121] See Evolution, supra note 36.

[122] Katherine E. Hollist, ARTICLE: TIME TO BE GROWN-UPS ABOUT VIDEO GAMING: THE RISING ESPORTS INDUSTRY AND THE NEED FOR REGULATION, 57 Ariz. L. Rev. 823, 840 (2015) (realizing that the government should be looking at esports as an industry in need of regulation).

[123] See E-sports.or.kr

[124] Dominic Sacco, ‘They Asked us to Buy Call of Duty Because They Didn’t Have a Disc’ the Doomed UK eSports Governing Body That Time Forgot, PCR (Apr. 23, 2015), https://www.pcr-online.biz/retail/they-asked-us-to-buy-call-of-duty-because-they-didnt-have-a-disc-the-doomed-uk-esports-governing-body-that-time-forgot

[125]  See id (a manager recalling that UKESA owes him 11,000 euros).

[126] Compare Radoslav Kolev, KeSPA, Riot, and OGN Finalize the Korean 2015 Circuit Reform, GOSU GAMERS (2014), http://www.gosugamers.net/lol/news/29039-kespa-riot-and-ogn-finalize-the-korean-2015-circuit-reform (describing how Riot Games had to intervene in order to secure contract) with Korean News article exposing KeSPA regarding OGN-Riot drama, REDDIT (2016) https://www.reddit.com/r/leagueoflegends/comments/3vy34p/korean_news_article_exposing_kespa_regarding/ (reports of similar conflict with KeSPA acknowledging that Riot Games retains final authority to make broadcasting decisions).

[127] Korean News article exposing KeSPA regarding OGN-Riot drama, REDDIT (2016) https://www.reddit.com/r/leagueoflegends/comments/3vy34p/korean_news_article_exposing_kespa_regarding/.

[128] See Shadow Li, Rise of Virtual Athletes, CHINADAILY (Jun. 2, 2017, 8:36 AM), http://www.chinadaily.com.cn/hkedition/2017-06/02/content_29587422.htm

[129] See Sacco, supra note 114 (stating how as a manager of Dignitas in 2008, Sacco noticed similar problems with esports back then, that many companies are starting to repeat again). See also Chao, supra note 90 (referencing the need for strict enforcement mechanisms).

[130] See Tong, supra note 51

[131] See Chao, supra note 90 (noting that when it comes to online regulation, legislation is often reactionary).

[132] See Chao, supra note 90

[133] See generally Twitch.tv (the most viewed game on Twitch often changes as new games are released or hold event specific events)

[134] Kellen Beck, Belgium’s Gaming Commission said that Loot Boxes are a Form of Gambling, Wants to Ban Them, MASHABLE (Nov. 22, 2017) https://mashable.com/2017/11/22/belgium-loot-boxes/#5r8gcVALamqw (example of a regulation change that needed to be issued once new games started using randomized loot boxes as micro transactions).

[135] Hollist, supra note 117 (realizing that the government should be looking at esports as an industry in need of regulation); Peter Warman, ESPORTS REVENUES WILL REACH $696 MILLION THIS YEAR AND GROW TO $1.5 BILLION BY 2020 AS BRAND INVESTMENT DOUBLES, NEW ZOO (Feb. 14, 2017), https://newzoo.com/insights/articles/esports-revenues-will-reach-696-million-in-2017/ (esports revenue is currently at $696 million and expected to at least double 2020).

[136] Ebon Novy-Williams and Christopher Palmeri, This Esports League Will Pay Pro Gamers $50,000 Plus Benefits, BLOOMBERG (Jul. 26, 2017) https://www.bloomberg.com/news/articles/2017-07-26/activision-s-video-game-pros-to-earn-minimum-of-50-000-a-year.

[137] See Evolution, supra note 36; See Overwatch League (franchised teams get a portion of skin sales as revenue and a share of overall league revenue).

[138] Andy Chalk, Korean e-sports Association Proposes Minimum Salaries for Pro Gamers, PCGAMER (Oct. 31, 2014), http://www.pcgamer.com/korean-e-sports-association-proposes-minimum-salaries-for-pro-gamers/ (recalling that Kespa had no guaranteed minimum salaries before the involvement of Riot Games in negotiation process).

[139]  Ben Gilbert, There’s An Adderall Doping Scandal in the World of Professional Gaming, BUSINESS INSIDER (Jul. 23, 2015) http://www.businessinsider.com/esl-drug-testing-for-adderall-2015-7 (Riot Games policing League of Legends for Adderall abuse); Eric Chan, South Korean Police Bust Illegal $350,000 Scripting Operation, AKSHON ESPORTS (Dec. 01, 2016) https://www.akshonesports.com/article/2016/12/south-korean-police-bust-350000-scripting-operation (policing scripters, who are people that use software that makes characters’ in-game abilities automatically target and hit other characters without aiming).

[140] Kara Jacobacci, Performance Enhancing Drugs: Adderall Abuse in Esports, ESPORTS EDITION (Mar 8, 2017), https://esportsedition.com/news/adderall-abuse-esports-doping/.

[141] Matt Brian, ‘Overwatch’ Has its First Match-Fixing Scandal, ENGADGET (Apr. 4, 2017) https://www.engadget.com/2017/04/24/overwatch-match-fixing-korea/.

[142] Aurangzeb Durrani, Match-fixing Comes to the World of Esports, TECHCRUNCH (Apr. 23, 2016), https://techcrunch.com/2016/04/23/match-fixing-comes-to-the-world-of-e-sports/.

[143] Esports Integrity Coalition, ESIC (Jan. 14, 2018) http://www.esportsintegrity.com.

[144] Lee Davy, ESIC Commissioner talks to MEPs about Esports Match-fixing Concerns, CALVINAYRE (Sep. 21, 2017), https://calvinayre.com/2017/09/21/business/esic-commissioner-talks-meps-esports-match-fixing-concerns/ (Ian Smith’s concerns about match-fixing in esports).

[145] See id. (describing government regulation doing more harm than good because government officials and lawmakers do not understand the esports industry and culture).

[146] Ebon Novy-Williams and Christopher Palmeri, This Esports League Will Pay Pro Gamers $50,000 Plus Benefits BLOOMBERG (Jul. 26, 2017), https://www.bloomberg.com/news/articles/2017-07-26/activision-s-video-game-pros-to-earn-minimum-of-50-000-a-year.

[147] Christopher Palmeri and Gerry Smith, Comcast Buys Philadelphia Esports Team, BLOOMBERG (Sep. 20, 2017), https://www.bloomberg.com/news/articles/2017-09-20/comcast-buys-esports-team-as-activision-rounds-out-new-league (explaining how Comcast purchased a franchised team that is part of the Overwatch League).

[148] See 15 U.S.C.S §45(a)(1) (stating “Unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are hereby declared unlawful).

[149] See supra IV (A).

[150] See supra IV(B).

[151] See Warman, supra note 126 (describing growth of esports has been growing at 40 percent consistently over the past 5 years); see also

[152] Xing Li, Franchising Isn’t a Cure-all For Issues in the LCS and Esports in General, DOT ESPORTS (May 12, 2017) https://dotesports.com/league-of-legends/news/franchising-limits-lcs-promotion-relegation-14606 (acknowledges the potential concern for of lack of competition as teams will be less likely to relegated under franchise agreements).

[153] See id.

[154] See Ncaa.com

[155] See Li, supra note 152.

[156] See supra III(A)(a) and supra IV(C).

[157] See supra III(A)(a) and supra IV(C).

[158] George S. Pavlik, Leveraging Intellectual Property Rights in Esports Can be Critical Success, LEXOLOGY (Jun. 15, 2016), https://www.lexology.com/library/detail.aspx?g=3b3ba15e-05c0-4100-98a7-01eb03e6e9b4 (stating “IP associated with the content, characters and gameplay of a particular eSport game is generally owned by the game developer as original creator of the game”).

[159] Jay Massaad, Report: Esports to be Worth Almost $2b by 2022, ESPORTSINSIDER (Oct. 18, 2017), http://www.esportsinsider.com/2017/10/report-esports-worth-almost-2b-2022/ (esports projected to be worth over $2 billion by the year 2022).

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