Esports players compete in a Call of Duty video game tournament
For years parents have been concerned about the amount of time their children spend playing video games but there’s more to worry about now than their square eyes and a lack of fresh air.
The popularity of esports tournaments, where players compete against one another on the latest computer games, is booming but as with any fast-growing industry it is attracting some undesirable interest including from illicit gambling websites.
The total number of hours spent watching esports events exceeded 6 billion globally in 2016, up 19pc compared to the year before, according to a study by IHS Markit.
As esports events have risen in popularity – and profitability – a growing number of businesses have sprouted up in a bid to leverage the trend’s success for their own gain.
The Gambling Commission secured the first prosecution of its kindearlier this year of two men running the unlicensed gambling website FutGalaxy.com which allowed gamblers – including people under the age of 18 – to use a virtual currency to bet on the outcome of esports matches.
After being shown footage of a 12-year-old boy gambling on the site, District Judge McGarva described it as “horrific” and added the video had “hit home to me how serious this is”.
The Gambling Commission said since November 2014, it had contacted 100 unlicensed online gambling sites and 16 of these were related to the issue of gambling using virtual currencies on esports tournaments.
It added unregulated third-party websites were on the rise and that one US report estimated the global ‘skins’ gambling market – where in-game items such as digital guns and knives are used as a proxy for gambling chips – was worth between $3.9bn and $5.1bn in 2016.
The issue of young people – predominantly the audience interested in esports – being lured into gambling on computer game tournaments is now a key focus for the UK’s Gambling Commission and will heavily feature on the agenda at charity GambleAware’s conference at the end of the year.
Marc Etches, chief executive at the charity, said it was “very alert” to the issue.
“We’ll be asking what implications this has for minimalising gambling-related harm in the future,” he said.
“Gambling is everywhere and technology makes it very accessible. One specific thing we will be exploring is this convergence between gaming and gambling, which is very real.”
Mr Etches said while it might be difficult to identify too many young problem gamblers now he was worried the country would “reach a tipping point” if the authorities did not grasp control of the burgeoning trend.
Ian Smith is the first esports integrity commissioner and was appointed last year to head the Esport Integrity Coalition, known as ESIG.
He sympathises with the concerns about the effect the thin boundary between esports and gambling could have in the near future.
Mr Smith said while he felt the issue surrounding betting using virtual currencies, or skins, was fading, its prevalence between 2013 and last year had created a problem that would endure.
“Lots of young people learned how to gamble in a way they would not have done with other sports,” he said.
The commissioner added industry projections envisage a rapid rise in the amount of bets placed on esports by 2020.
Mr Smith said his organisation was “trying to put up the barriers” now in a bid to discourage or guard against the potential elicit activity it envisaged being more prevalent in the next few years.
“Where the markets get big enough esport betting will become interesting to the type of people we don’t want it to be interesting to,” he said.
A key reason why the esports sector is vulnerable to illicit gaming growing alongside it is because it is “not a coherent industry”, Mr Smith said.
“ESIG is as close as it gets to some form of regulatory body,” he said.
“We are literally in the process of recruiting members to ESIG one by one and it’s a long and tedious process.”
The lack of an established regulatory body and few formal relationships between esports providers and gambling companies makes it a potentially attractive target for unregulated gambling sites, mainly because data collection is unreliable which makes it easier to defraud people.
“The flow of data and use of data is pretty haphazard,” ESIG’s Mr Smith said.
The Gambling Commission, buoyed by its February prosecution, is engaging the might of big companies to help it tackle the problem. The people convicted for the FutGalaxy site were aligning themselves to the FIFA series of computer games, even though there was no official association.
FutGalaxy allowed customers to buy its virtual currency – FUT coins – which could then be used to gamble or turned into Fifa coins via a jackpot game.
The maker of the Fifa football games, EA sports, did help the Gambling Commission with the prosecution and the body is working with other game developers too.
It also working with payment providers Visa and Mastercard when it finds an illicit esports gambling website in a bid to get those large companies to refuse to process any related payments.
“We are targeting the lifeblood of these businesses and Mastercard and Visa have agreed to work together with us, support which is key,” a Gambling Commission spokeswoman said.
Protecting the integrity of the burgeoning esports sector could also soon have the world’s biggest corporates behind it, including Amazon.
In 2014, the online retail giant bought the leading gaming video platform Twitch for $970m, or $18 for each of the platform’s 55m unique visitors at the time, which IHS Markit said was “notable as the first media not directly tied to Amazon’s retail footprint”.
It will no doubt be keen to help regulators, like its peers in the payment processing world, tackle anything which could give the sector a bad name, as will Tencent, the Chinese internet giant, which dominates the Asian nation’s esports market and this month announced the forthcoming launch of a dedicated esports TV channel, ESPTV.
[“source-ndtv”]
