January 07, 2021

What is Esports Law? (an Interview with Kate Hollist)

How is esports law different from traditional sports law?

As you might expect, the two share many similarities. You’re going to see a lot of the same issues cropping up, like trademark infringement, sponsorship agreements, player contracts, and compliance with league regulations. At the same time, though, esports are unique in that they exist entirely in a virtual space. Players’ in-game performance can be affected by a developer’s tweaks to in-game characters and items. Leagues aren’t limited by the same geographical restrictions, so there’s a good chance they’ll encounter and have to account for international laws. And, as with a lot of new sporting leagues, the regulatory framework hasn’t been fully established yet, so teams and players are grappling with a lot of uncertainty about what they can or cannot do.

We also see a significant difference in the legal landscape when it comes to intellectual property, because the game exist entirely on the developer’s IP. If you break the NFL’s rules, you might get kicked out of the league, but it can’t ban you from playing the sport of football. With esports, if the developer determines you’ve violated its terms of service, it can ban you from the game entirely. That could mean that you lose both your spot as a professional player and your ability to stream yourself playing the game.

There is also the general uncertainty as to which laws will and won’t apply to esports teams and leagues. For instance, several colleges have begun offering esports programs and scholarships, but it’s not clear yet whether the diversity requirements generally imposed on college sports by Title IX would apply. In the employment law context, most esports players are classified as independent contractors, so it’s not clear whether they can legally negotiate a collective bargaining agreement. As with most new industries, at this point it mostly comes down to analyzing and mitigating the risk—there simply isn’t enough case law yet for us to know for sure how courts will react.

What made you interested in practicing esports law?

As an avid gamer myself (I capped out as a diamond-ranked support player) I’ve always been fascinated by video game law in general. Esports had just begun to gain mainstream traction when I started law school in 2013, and it was (and still is!) a very under-researched and legally novel industry. That brings with it some exciting challenges..For example, most of my clients can’t afford to wait three years for dispute resolution through lengthy litigation; they need creative, responsive solutions that can be deployed now. They can’t afford to lose a season toa compliance action; they need to maneuver around problems before those problems arise. They don’t have the benefit of knowing how courts will apply laws to them; they need to build infrastructures and systems that are likely to survive rulings that won’t be handed down for several years. These aren’t needs that the legal system is always well-equipped to handle, but that’s exactly what makes it so rewarding when I’m able to help my clients find a creative solution.

What are some legal development esports professionals should keep an eye on?

Right now, there are several, but I’ll focus on two. California recently narrowed the definition of “independent contractor,” which has huge employment law implications for leagues, teams, and players alike. There are a lot of regulations that kick in to provide protections for employees that wouldn’t apply for independent contractors. That is going to have a significant impact not only on professional-level players but on the semi-professional challengers trying to break into the space. It also puts teams in a difficult position, especially on a global stage where they’re facing off against competitors who don’t have anywhere near the same level of restrictions. We’re seeing a lot of organizations grappling with this issue now.

On the other side of the market, there’s a growing interest in mobile-based esports, but at the same time, we’re expecting to see regulation of mobile games come to a head in the near future. We’ve already seen a lot of scrutiny fall on microtransactions, and a wave of mobile game advertising compliance litigation is likely to follow suit soon. One of the unique characteristics I mentioned above about esports is that they exist on someone’s intellectual property—which means that if the underlying intellectual property owner doesn’t take appropriate precautions, the leagues, teams, players, shoutcasters, sponsors, venues, and everyone else can end up paying the price if the game gets eviscerated by a compliance action. While not as immediate as the employment law changes, this is definitely an area of concern that industry professionals should watch carefully.

What should readers do if they have additional questions about legal issues related to esports?

They can feel free to contact me at [email protected]. I’m always happy to discuss this area of law—whether you’re a potential client or not

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This entry was posted on Thursday, January 07, 2021 and is filed under Press & Published Articles, Internet Law News.

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