The rise of sports wagering in Massachusetts has generated excitement around betting on traditional teams like the New England Patriots or Red Sox, but another industry could get a piece of the action esports and video games.
A new sports wagering law approved in August brings the potential for many of the countrys top players to compete for one of the states seven untethered digital betting licenses. But it also opens the door for placing wagers on a billion-dollar competitive video game industry that has skyrocketed in growth since the dawn of the 21st century.
And with that new avenue for gambling comes a host of unique difficulties that are more complex and novel than the ones stemming from traditional sports, where years of betting provide context for the burgeoning industry in this state.
Michael J. Wall, a business lawyer for Foley & Lardner LLP who is part of the firms sports and entertainment industry team, said regulators in Massachusetts are not alone in grappling with the question of how esports betting fits into the larger sports wagering landscape.
Its an unknown phenomenon to a lot of the regulators, I imagine, he said in an interview. There is going to be an education process that will be involved. I just think its going to take a lot longer for them to come up with regulations to govern esports betting than it will for the traditional sports, so I think its gonna be really lagging way behind.
The sports wagering law Gov. Charlie Baker signed on Aug. 10, and the Massachusetts Gaming Commission is now working through, allows for betting on competitive video games. But the commission is still deciding how it wants to handle the issue.
How exactly esports betting will take shape here is still foggy though one company has told the commission they are interested in setting up a sports book for competitive video games.
In a non-binding notice of intent form submitted at the end of August, G3 Esports said they will seek sportsbook wagering for esports and videogame competitions.Working on a new platform
G3 Esports CEO Anthony Gaud said his company is working on a video game and esports wagering platform that he hopes to bring to Massachusetts and other states through one of the seven digital sports betting licenses.
While most of the details are still under wraps, Gaud said his company will make an announcement pretty soon. The company, he said, has been working on the project for about three and a half years alongside a number of partners, though he declined to dive into details before a formal announcement.
Asked if he was confident about his bid for one of the states digital licenses, Gaud said, its a wagering business.
I think the argument that we have is that we could expand the market into a new direction, he said in an interview. Were something very, very different. And something that should prove to be larger than iGaming in five years, or start to show the promise of what will be larger than iGaming. Ten years from now, this will be the leading way to play games.
Wall said that argument may prove useful when G3 Esports pitches regulators on their platform.
I think that was pretty smart of them to do that because there are only seven online betting licenses that will be granted that wont be connected to a traditional licensee, he said. It may be that the Gaming Commission will want to grant that license just because they are so dedicated to esports I was pretty wise of them to get their application in there.
Gaud said Massachusetts has a good demographic for his upcoming wagering platform. He also said G3 Esports plans to announce within the next 30 days a major media partnership with a well-known sports media company to launch, essentially, the first mass-market esports media website.
Ive lived in Boston twice, actually. My wife and I love Boston. Its a good demographic, its a younger demographic because of the collegiate space, he said. We think that demographic really ties into this kind of product offering because it is for a younger demographic.
But before any wagering on esports takes place in Massachusetts, regulators need to tackle a seemingly never-ending list of questions, and the weight of the task seemed to show during a Gaming Commission meeting last week.What would the governing body for esports be?
During a discussion on what criteria should be included in a sports wagering license application, the topic of esports drew some laughs and light frustration from commissioners. The new law is broad, and both staff and commissioners will need to cover hundreds of other subtopics related to sports betting.
After discussing potential questions for the application, Commission Chair Cathy Judd-Stein brought esports to the attention of her colleagues as an issue they had not yet talked about. It was hour five of what would be a nearly seven-hour meeting.
After a brief pause where some exasperated laughter could be heard from Executive Director Karen Wells, Judd-Stein said, I know. Commissioner Eileen OBrien jumped in jokingly with, I just want to see your head explode today, a reference to the grueling nature of the seven-hour meeting that was underway.
I dont really know what were gonna do about esports. Can we put it in the parking lot and not forget it? Judd-Stein said. I just dont know if thats a separate application process or not, right? Ive heard all different reactions, and many of which are consistent with your expressions just now.
Massachusetts sports betting law mentions electronic sports a handful of times, defining it as a single or multiplayer video game played competitively for spectators. Esports events fall under the sports event or sporting event definition of the bill, and there is also a portion dedicated to an esports governing body.
The commission shall adopt regulations to determine the governing body for electronic sports for the purposes of this chapter, the law reads.
But that provision may turn out to be more complicated than it seems at first glance.
Where American football has the National Football League or hockey, the National Hockey League, esports, for the most part, is bereft of a definitive national governing body. Oftentimes, the source of official data, information, and tournament rules come from publishers in the case of League of Legends, that would be Riot Games or Counter-Strike: Global Offensive, Valve.
Wall said determining what the governing body for esports is could take a long time for the Gaming Commission.
I mean, you and I sitting here today cant necessarily say what the governing body is for esports. Should it be the publisher? he said. Is it this U.S. Esports Federation that proclaims itself the official governing body for esports in the United States? But I dont know if thats accepted.Match fixing and other threats
And there is another potential black hole of problems that could become apparent with esports betting the integrity of events, which most regulators may not be familiar with.
Cody Luongo, who writes Sharpr, a weekly newsletter focused on esports and betting, said many of the major events like the Counter-Strike Majors or the League of Legends World Championships are safe. But when delving into the second, third, or fourth division leagues, match-fixing and other integrity threats appear more often.
You have to think about how much more complex and different the esports environment is compared to traditional sports, he told MassLive. There are all these potential hazards and trip wires that are very incredibly nuanced and very complex. And for those that are not intimately familiar with the space, I think its rightfully daunting and kind of hard to wrap your head around.
Jeremey Meisinger, counsel at law firm Foley Hoag, agrees gaming regulators often lack a nuanced understanding of esports and the associated betting landscape. And in Massachusetts, regulators are going to want to do a little bit of extra homework on the topic.
They have far too much homework to do at the moment. And theyll get to t, theyll have reasons that they want to get to it, he said. But it wouldnt surprise me if it took a little bit of extra time.
When the Massachusetts House debated in July 2021 its version of what would later become the sports betting law, Rep. Andy Vargas said esports is one of the fastest growing sports industries in the United States.
Competitive video games, he said, often draw large viewer counts that rival the National Football League. And after growing up playing video games like NBA 2k and Call of Duty, he said he never thought he would talk about it on the floor of the House.
I know the esports industry will continue to grow exponentially, he said. To account for this market, that is of high potential, our bill authorizes sports betting on esports and gives the gaming commission the authority to develop a regulatory structure for this budding industry.
College EsportsX CEO and Emerson College professor Kevin Mitchell said the esports industry is massive and has the potential to expand beyond its already billion-dollar status.
Esports betting, he said, saw flashes of growth during the dark days of the pandemic when professional sports were shut down.
Thats when you really started to see people embrace it and say, Wow, this could be. I mean, they were betting on pigeon racing at that point, right? There was nothing to bet on, he said in an interview. Thats when you saw flashes of it.
Related Content:Sports betting grew without it being legal in Massachusetts; bettors primarily young, educated males Not too fast: Sports betting regulators say they are going to take the necessary time to put into place an industry that has integrity Sports betting in Massachusetts took a step forward Thursday when regulators discussed and adopted initial regulations
