Ian Smith, commissioner of the Esports Integrity Comission, looks at the current esports betting landscape, and the effects of novel coronavirus (Covid-19) on the sector. While lockdown may have been the perfect storm for the sector's growth, he warns that this does not come without potential pitfalls.
As commissioner of the Esports Integrity Commission (ESIC), I have the privilege of an holistic overview of the relationship between esports and betting on esports.
My view has altered dramatically these last few months as a result of coronavirus pandemic. What was relatively stable and predictable is now unstable and constantly surprising. It is wonderful and it is challenging. I’m pleased to have an opportunity to provide my “State of the Nation” thoughts…
As late as February this year, anyone involved in the intersection of esports and betting on esports would have looked at a pleasing landscape of healthy growth and increasing engagement. The stakeholders lined up quite predictably: Counter-Strike: Global Offensive (CS:GO), Dota2 and League of Legends (LOL) provided over 80% of the betting markets and revenues between them.
This meant that the tournament organisers (TOs) could do “official data” deals with data companies or directly with betting operators for access to real time data for packaging to the betting sector (easier with the Valve titles – CS:GO and Dota2 – and less easily and certainly on a less granular level with LOL). All the other esports titles, including the “big” publisher run leagues – Overwatch League and Call of Duty League – barely moved the needle.
Then came Covid-19.
For all the tragedy of the pandemic, it has been a perfect storm for esports and esports betting. No traditional sports to watch but a hunger for competition? Esports is here. No sports, bars, restaurants, movies, clubs to go to in lockdown? Video games and esports are here. No in-person contact? In-game chat is here. No traditional sports to bet on? Esports betting is here. Missing football? FIFA and PES are here. Missing FormulaE? eFormulaE is here. Missing basketball? NBA2K is here.
Every day I receive a new survey result telling me there’s been a massive percentage increase in players, viewers, bettors, handle in esports, but I don’t need the surveys because, in my role, I see the evidence directly, albeit from the darker side…
Games that have never come to my attention before are now the subject of wagering markets, suspicious betting alerts and Twitch streams. Tournaments are proliferating, and prize monies increasing. Sports simulator games suddenly mean something in the esports world where, until recently, the purists scoffed at them. Large non-endemic sports books are coming to ESIC seeking engagement with us and participation in our global esports suspicious betting alert network.
Suspicious betting alerts are far more numerous and relate to games, TOs and markets I’ve never encountered before. Approaches and threats to players coercing them into match-fixing are increasingly reported to me. Webinar speaking invitations rain down like confetti… “Please tell us how to get into esports, esports betting, esports sponsorship, esports investment…” I could spend 20 hours a week right now teaching people what I have known for years – esports is the future.
So, what is real, what is illusion? What is going to last beyond the pandemic and what is going to evaporate? My speculation below is personal based on my observations after five years in the industry and 20 years in traditional sports governance and regulation before that, rather than ESIC’s official view on any of these things. What is the State of the esports Nation?
- TOs, particularly at the higher end, have become considerably more professional and have upskilled spectacularly quickly since their worlds moved 100% online. Momentum will continue and the advantage of the lightening adaptability that the esports industry has always had, will continue to serve it well.
- Traditional sports organisations have, at last, grasped the necessity of a good esports strategy supported from the top rather than tossed to an enthusiastic young techie to run on a shoestring budget.
- Big international sports governing bodies have scrambled into the esports space with such abandon that they have completely neglected some fundamentals, like integrity. No player education, no anti-corruption regulations and no bet monitoring on their own competitions. Forget the reputational risk, let’s get busy! This is going to come back around to their detriment – many of these events are simply not safe from an integrity point of view, which is all the more surprising given how some of these governing bodies are still recovering from major corruption and match-fixing scandals themselves.
- Post pandemic general interest in sports simulator games will go off a cliff when the real thing returns, but, even if they retain just 10% of their new fans, that will be a big win for the players, TOs, publishers and betting operators who have become involved in those games. My warning is that the viewer and customer numbers and handle you’re seeing now will be much diminished soon and I’d be planning for that.
- The big three (CS:GO, Dota2, LOL) are and will continue to be the big three. There is no indication of that changing anytime soon. The new viewers and bettors are, mostly, going to stick around because the product is compelling and the competitive scene relatively stable.
- Sports betting in the USA post PASPA repeal is going to take years to mature due to the chaotic regulatory system and the continued existence of the Wire Act, which hampers everything. Esports betting, which is even more poorly understood by legislators and regulators, is going to lag behind even further, but (and it’s a big but) esports betting, in the long run, is going to be huge in the US. There’s a lot of work and education to be done, but the long term future is bright because there are already a very high number of esports bettors (albeit felonious) in the country and a huge number of potential bettors amongst the massive esports fan base.
- Outside the big three esports titles, I would be looking to the solid growth of Rainbow6 Siege and the awesome in-game wagering potential of PUBG for my growth, rather than the seemingly stagnant OWL scene or the almost completely unknown new CDL scene. Starcraft2 looks to be resurgent too, which is interesting given its checkered history with betting, but it does have a large and established fanbase, particularly in Asia. It’s far too early to comment regarding Valorant, but I’ll be keeping a sharp eye on it – it’s a cool game.
Guessing what’s going to be the next big thing in esports is a bit of a mug’s game – ultimately, it’s the game community that decides and that’s as it should be. There are good reasons why certain games succeed and have longevity, but those reasons are hard to replicate in a new game without it looking like a knockoff, but even that worked historically for LOL, so who knows?
What I am certain of is that integrity in esports still needs a lot more understanding, focus and resource. Making the competitive scene safe from cheating, corruption and betting fraud requires a far more joined up approach than the publishers in particular are currently displaying.
The good news is that that is changing. The eyes of the world are on esports and, along with the riches, that brings pressure. I look forward to witnessing who rises to that challenge. In the meantime, ESIC is here for those stakeholders that want to take these challenges seriously.