#esports #professional #gaming #Olympics #Tokyo2020
Monday, 20 January 2020 - While previous generations engaged in endless discussions about whether chess could be considered a ‘real sport’, today professional gaming has become the subject of that very same question. Professional gaming or ‘Esports’ has in the past decades turned into a booming business in Asia and is now rapidly growing in other parts of the world, including within the European Union. With prize money for Esports tournaments growing each day, with specific Esports arenas under construction (at the time of writing) and with a beneficial Belgian tax regime for the sector, professional gaming is attracting mainstream attention. The growth of this business clearly comes with various legal challenges and opportunities. An important next step could be the Olympic Movement’s and Belgian government’s recognition of Esports as an Olympic sport. Such recognition would be a stepping-stone for the industry’s further development, but recent developments show that such recognition may not be realistic in the near future.
In a nutshell, Esports is the activity in which people play video games in a competitive manner against each other. The video games used for Esports are not limited to sports games such as FIFA, but also include other types of games (e.g. real time strategy – Starcraft, First Person Shooter – Counter-Strike, Multiplayer Online Battle Arena – League of Legends, etc.).
Developers of these video games have invested massively in providing the ability to play these games online, in a competitive matter, with or against each other. The huge popularity of (some of) these games and their competitive element have led these developers to further commercialise their product. With a sector growth rate between 10 and 15 per cent per year over a 25-year period, velocity is extremely high. Today, tournaments with millions in prize money, thousands of spectators and major sponsorship deals are hosted regularly at high-end venues.
“Under the motto “it’s all about the kids, and their money”, this success has triggered an interest of the Olympic Movement.”
The success of Esports has been attributed to the difference with video games as gamers play against the computer itself (i.e. artificial intelligence) rather than against each other. Indeed, Esports is perfectly suited for different types of consumer interaction such as playing, socialising and watching others play against each other. Initiatives such as TwitchTV, gather a large number of consumers that do not necessarily play the games, but watch others play and are prepared to pay for doing so. It is also worth noting that the average Esports consumer is younger than 30 years old. Under the motto “it’s all about the kids, and their money”, this success has triggered an interest by the Olympic Movement in the Esports phenomenon. With viewing figures for the Olympic Games having dropped 15% during the Rio Olympics, the Olympic Movement is very much aware that it needs to attract a younger audience, at the risk of losing traction with a younger audience.
In the past, it seemed entirely unrealistic that Esports would be included in the Olympic Games. This is illustrated by the words of the 9th President of the International Olympic Committee (IOC), Thomas Bach: “we want to promote non-discrimination, nonviolence, and peace among people” and “this doesn’t match with the video games, which are about violence, explosions, and killing. And there we need to draw a clear line”.
However, over time, the likelihood of Esports being included in the Olympic programme grew with the Esports Forum that was hosted by the IOC and the Global Association of International Sports Federations (GAISF) at the Olympic museum in Lausanne on 21 July 2018. The possible incorporation into the Olympic programme was reinforced by the fact that Esports was included as a demonstration event at the 2017 Asian Indoor and Martial Arts Games in Ashgabat and at the 2018 Asian Games in Jakarta and Palembang. Discussions have also been held to include Esports as a medal event at the 2022 Asian Games in Hangzhou and as a demonstration event at the 2024 Olympic Games in Paris. However, ultimately, it appears that Esports’ role at the Olympic Games in Paris will be rather limited and solely focused on side-events related to pure ‘sports games’ such as FIFA.
“It appears that the momentum for the Olympic inclusion of Esports has stalled due to the premature death in October 2018 of Patrick Baumann.”
It appears that the momentum for the Olympic inclusion of Esports has stalled due to the premature death in October 2018 of Patrick Baumann, the president of GAISF and the IOC member who appeared to be most enthusiastic in promoting Esports. Also, the corruption rumours around Sheikh Ahmad Al-Fahad Al-Sabah, the president of the Olympic Council of Asia, a keen Esports supporter and the man behind the inclusion of Esports in the Asian Games, has been another blow to the sector.
This negative trend was confirmed by the IOC communication after the 7th Olympic Summit on 8 December 2018. The Summit concluded that there were various uncertainties regarding Esports, which deem even further discussion about the inclusion of Esports as a medal event on the Olympic programme premature as:
While it appears that some of these arguments can easily be rebutted by the Esports sector (e.g. it is hard to argue that the sports movement is solely values-based and not commercially-driven when it has been established that sports constitutes an economic activity to which, in principle, European law applies), the IOC has now clearly established its position that Esports will not be included in the Olympic Games in the near future. This position was once again confirmed by the IOC communication after the 8th Olympic Summit on 7 December 2019, in which it was clearly stated that the Olympic Summit mainly sees great potential for cooperation with electronic games simulating sports, hence excluding the vast majority of the Esports sector.
Regardless of the IOC’s stated position on Esports inclusion in the Olympic Games, it is interesting to analyse whether or not Esports and its characteristics fall under the general concept of “sports”. In particular given that many activities, which are generally considered as sports by the public, are equally not included in the Olympic Games.
The IOC has never defined what constitutes a sport and therefore reference is sometimes made to the definition in the European Sports Charter. In this charter, sport is defined as all forms of physical activities that, through casual or organised participation, are intended to express or improve physical fitness and mental well-being, form social relationships or obtain results in competition at all levels.
It can be debated whether Esports indeed constitutes a physical activity. However, with the assumption that Esports constitutes a physical activity, it seems hard to argue that Esports would not fall within the scope of this definition. Not every form of physical activity intended to form social relationships through casual participation can qualify as a sport. The definition adopted by the European Sports Charter seems – overly? - broad. Nevertheless, Esports seems to qualify as a sport under such a definition.
Other commentators refer to the sports definition by GAIFS, the umbrella organisation for most sports federations. According to GAIFS, an activity should, to qualify as a sport, (i) include an element of competition; (ii) not rely on any element of luck specifically integrated into the activity; (iii) not be judged as posing an undue risk to the health and safety of its participants; (iv) in no way be harmful to any living creature; and (v) not rely on equipment that is provided by a single supplier.
“Without the games developer, who holds the intellectual property rights to the game, the activity cannot exist.”
This last criterion may be problematic for Esports. In Esports, it is common that a single games developer supplies the essential technology for the activity and that this developer frequently changes the rules of the game. Without the games developer, who holds the intellectual property rights to the game, the activity cannot exist. From the declarations after the 8th Olympic Summit on 7 December 2019, it can also be concluded that the Olympic Movement has issues with this characteristic of the Esports sector given that it was announced that “the focus should be put on players and gamers rather than on individual games”.
However, one may argue that GAIFS’ criteria for defining a sport are overly formalistic and the dominant position of the games developers in the current concept of Esports could be addressed through a strong(er) regulatory framework and establishing an international federation.
Jim Parry has defined an (Olympic) Sport as “an institutionalised, rule-governed contest of human physical skill”. The more problematic elements of this definition appear to be the human physical skill and the institutionalism. Whereas one might not necessarily agree with Parry’s conclusion that Esports are not a sport because of the lack of these elements, his paper does reveal some important insights and critical reflections on Esports’ case for qualifying as a sport.
“Training regimes crafted specifically for their needs: a strong core, perfect posture, hand-eye coordination and strong forearms, hands, wrists and fingers.”
According to Parry, contestants in Esports are physically distant from the action (as they are remotely contesting over what they can make happen on a screen by manipulation of a console) and the physical exertion involved in Esports is not adequately physical in the sense required to qualify as a sport. However, the reality is that the best professional gamers follow training regimes crafted specifically for their needs: a strong core, perfect posture, hand-eye coordination and strong forearms, hands, wrists and fingers. In addition, they are performing cardiovascular exercises, they focus on nutrition and they participate in cryotherapy. In light of the above, the physical activity inherent to Esports does not seem to differ all that much from the physical activity in Olympic sports like archery and shooting. It seems therefore hard to deny that Esports implies a clear physical activity that is adequate to qualify as an (Olympic) sport.
“This lack of institutionalism prevents Esports from qualifying as a true (Olympic) sport today.”
Parry further raises the issue of institutionalism within Esports, or rather its lack. It is true that, today, there is no overseeing association that acts as ‘rule maker’ within Esports. This is a direct consequence of the way Esports is structured: the developer supplies the essential technology for the activity, holds the intellectual property rights to such technology, and frequently changes the rules of the game. This lack of institutionalism prevents Esports from qualifying as a true (Olympic) sport today. However, given that Esports is a relatively new phenomenon, it seems plausible that in the near future such an overseeing association could be established. Such an association would not need to be burdened with the development of the games, but could for example be in charge of granting licences to different games that could then be played, under certain conditions, as a true sport under the umbrella of this association. In most other sports as well, the institutionalism today is the result of a yearlong process. This process has only just begun within Esports.
It should be noted that other commentators have remarked that, on the topic of institutionalism, Esports is already, to some extent, similar to other sports. Indeed, a set of rules already exists as the basis of each competition between players and a rule maker provides for a player’s permitted and prohibited moves (albeit that the rule maker is a developer or a tournament organiser, rather than an association). Furthermore, the rule makers also regulate team eligibility and team ownership, just like in other sports. Finally, the International Esports Federation is already a signatory to the World Anti-Doping Agency Code. In a way, the nature of Esports (in which the developers own the intellectual property rights to the underlying games) provides the opportunity for a system with even more institutionalism in comparison to other sports given that the rule maker has absolute control over the entire activity itself, rather than only controlling a tournament or a league.
In a recent answer to a parliamentary question, the Flemish minister for sport, Ben Weyts, shared his viewpoint on Esports. He emphasised that the Flemish sports policy entails the goal to getting as many people as possible moving. Given that, according to the Flemish Minister for Sport, Esports is essentially a sedentary activity that does not contribute to a more active lifestyle, it is in stark contrast to the Flemish sports policy.
“According to the Flemish minister for sports, Esports is essentially a sedentary activity that does not contribute to a more active lifestyle.”
It appears that the Belgian (Flemish) point of view regarding Esports’ qualification as a sport is inspired by the recent developments regarding Esports’ recognition by the Olympic Movement, given that an opening is left for the value of classic ‘sports games’ as long as they have a moving component and are combined with virtual reality technology. Such games do stimulate an active lifestyle and can therefore qualify for grants from the Flemish government according to the Flemish Minister for Sport.
The question whether Esports is compatible with any definition of sports cannot be easily answered and has triggered many debates in the context of Esports’ official recognition as a sport in various countries and the question of whether state subsidies, which is common practice in other sports, are desirable.
In 2017, the Court of Justice of the European Union (CJEU) already confirmed that not just any activity qualifies as a sport. In its ruling, the CJEU held that ‘duplicate bridge’ cannot be given the status of a sport for the purpose of the VAT directive as a sport must involve “a not negligible physical element”.
The current International Esports Federation and World Esports Association are working on Esports’ promotion, but still need to take major steps in fine-tuning the rules of the game(s) in collaboration with the games developers. Many see these developers’ dominant position as a huge challenge in the upcoming years. A strong federation next to the developers is necessary to further tackle the legal challenges and opportunities for a fast-growing activity like Esports.
We are one of the few law firms in the Benelux region that has developed expertise in the Esports sector. We have assisted both games developers and Esports teams, and have advised newly established federations with the setting up of their structure for Esports.
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