There is so much talk about the growth of eSports globally as a property. However with all the momentum comes risk, especially when you are talking about potentially billions of dollars being invested in the growth of the business in the coming years. Gambling, match fixing, even PED’s are already an issue with the sport, and if not controlled, can have potential devastating effects going forward.
Luckily the business of eSports, the game developers, and others involved in putting on high level events, are already looking into ways to combat issues as they arise and even before. To get a better understanding of the issues and how they can be prevented, we caught up with Moritz Maurer, Head of eSports Integrity for SportIM. One of the biggest and most effective companies dealing with the global integrity of data in sport, SportIM has created and is expanding its new initiatives into the fast-growing world of eSports.
Get The Latest Sports Tech News In Your Inbox!
People talk about the growth of eSports as a property but how big is the legal gambling market on the business now?
eSports is a gambling industry buzzword at the moment which has enjoyed massive growth over the past few years with main stream channels making it hard to ignore and increasing demand for betting opportunities. However there are few bookmakers that have not yet added eSports to their portfolio. We are observing a steady increase of turnover due to more eSports enthusiasts becoming customers and a more and crossover of customers for traditional sports towards eSports.
How has the market grown, and where do you think it could be as eSports grows in places like Europe and eventually the US?
Over the past 5-6 years especially the eSports movement in Europe and the US has exploded. The development of betting markets picked up naturally. Nowadays there are plenty of eSports specific betting operators that often operate with questionable legal setups but are growing and becoming more visible in the eSports community. A good indicator for the eSports betting potential in the US in the skin betting market. The US is #1 or #2 consuming region of the most known skin betting & gambling or fantasy eSports websites when looking at traffic alone. I can foresee a development in which the betting segment for eSports will be an integral and sizable part of the offering of bookmakers along common sports.
Where is most of the money being wagered; what are the bigger games?
The biggest eSports titles in regard to turnover are certainly League of Legends, Counter Strike: GO and Dota2. Furthermore I want to mention Call of Duty. The console title had quite surge in wager in 2016 with the introduction of the Call of Duty World league. COD is one of the eSports titles that leverages the crossover between sports & esports betting. League of Legends is very suitable for betting because of the great in-play market potential due to the various in-game objectives. The sheer size of the player base makes up for a big betting customer potential in LoL, whereas the community for Dota2 and CS:GO shows naturally a bigger affinity towards betting/gambling due to the exposure to all the services that revolve around weapon/hero skins that are inherit in the game.
Approximately how big is the illegal eSports wagering market?
Due to its exotic nature eSports betting has been out of scope of many regulators in the past which has changed definitely by now. However a big unregulated market remains with websites that lack KYC or responsible gambling measures as they would be deemed appropriate by most established governing bodies or licensing entities. It is hard to tell how big this market is in total but it can be assumed that a big part of viable customers of these services should be converted to established operators as they can find a superior offering in a fair and safe betting environment.
How does one explain the concept of Skin betting and how it works?
In Dota2 and CS:GO items exist that provide aesthetic upgrades to the hero you play (Dota2) or the weapon you wield (CSGO). The items – referred to as “skins” – are traded like commodities on a market place within the Steam platform operated by the game´s publisher Valve. The inventory of one´s Steam account can be connected to websites such as csgolounge.com or csgodouble.com where the user can wager these skins on eSports games or gamble in casino style games. Skins have a monetary value derived from the current market price and can be converted into currency.
With regard to monitoring illegal betting, how is it different than what companies like Genius Sports do for sports like soccer?
Besides monitoring real money markets SportIM/Genius Sports is observing movements in the skin betting economy. Furthermore for eSports additional educational measures are carried out. (We will run workshops with players/participants of eSports events and tournament hosts/organizers) In the long term it is key to involve the publishers of the games into the conversation, as they have the role of a governing body for their respective game.
How are the challenges differently, and who do you report them to when there is suspicious activity?
Match fixing is a risk that affects eSports like any other sport. There are however other eSports specific challenges in regard to match manipulation. These include the use of cheating software, the use of performance enhancing substances which is a topic that has just recently been started to be addressed by eSports organisations, and lastly an online game specific issue of DoS attacks on players. DoS stands for denial of service and explains the concept of dropping the connection of a player to the internet/the game server by pinging his IP in a very high frequency in a short time frame. Especially players in lower tier leagues/competitions are affected by this as they are often not well informed about measures that should be carried out to protect one´s IP address.
There is no central governing body in eSports. The closest equivalent to this role is inherited by the game publishers in their respective franchises. Genius Sports is in a position to assist any authority in the eSports space in combating match fixing/match manipulation and is working closely with customers to ensure that they are informed.
What is the biggest risk facing eSports today as a business?
A factor that could impact the success and growth of eSports as whole is a disregard for the integrity of the games at all levels of competition. Furthermore the development of a growing and widely unregulated betting & gambling market around skins can hurt eSports and undermine the efforts of many to establish it as a legitimate activity and career path.
As businesses like legal sports wagering and pay fantasy become more the norm in the US, how do you see eSports fitting into the gaming and gambling mix in the next 5-7 years? Is it a growth area and why?
There are various factors that would support the statement of eSports playing a big part in the gaming sphere in the next 5 years. Various big names and companies invest in eSports at the moment which can be seen as a confirmation of continued long term growth at a stage where eSports is just making its entry into main stream channels. Furthermore when looking at eSports in general one can observe a positive shift in the perception of the entire concept of competitive gaming which makes it more accessible to a broader part of the public. This is in my opinion an important factor for the development of the gaming segment of eSports in the long run. Lastly a US specific factor is the high popularity of fantasy eSports and skin betting/gambling websites in the US. A tangible demographic that participates in some sort of gaming is already there which is promising for the development of the legal sports wagering markets in the future.
What are the simple things the consumer should watch for if he/she is worried that a game they are following is not being played legitimately?
The betting product that is provided by Betgenius – the sportsbook branch in the Genius Sports Group – includes only top tier events in 8 different eSports in which the league and competition formats have reached a certain standard that we deem as appropriate to cover with a betting service. Things that we are looking out for and that can serve as a criteria for someone who wants to bet on eSports are the following:
- Clear and visible rules for the competition/league
- Referees that ensure the setup´s of the players are clean/players can not cheat
- The players play in booths that eliminate the possibility of obtaining information from the audience (offline events)
- The stream of online competitions should be delayed to prohibit competitors from “ghosting” their own game