Esports unregulated due to ‘fear of the unknown’

Activities involving esports and consequently betting on esports lack regulatory frameworks in many jurisdictions mostly due to “fear of the unknown,” said Chris Kissack, head of esports for Digital Isle of Man, during a webinar for the 2021 edition of Gaming Global Expo Asia (G2E Asia).
Kissack, who runs the executive agency for the Isle of Man government’s Department for Enterprise, explained that the lack of regulatory frameworks for esports and betting on esports in many jurisdictions, including Macau, “ultimately is about [regulators] being afraid to dive in. There is this fear from decision-makers to jump into these [kinds of] games.” He added that to remedy this “fear of the unknown,” regulators need to be exposed to these games and be a part of them.
“They need to see it and they need to play it to get over that fear,” Kissack said.
Addressing how the Isle of Man has been able to come up with regulations much faster than any other jurisdiction around the globe, Kissack noted that the fact that the territory is a relatively small island played a decisive role, as this makes it easier to seat all stakeholders at the negotiation table and explain the advantages and the potential challenges such activities might have.
The webinar, which was moderated by Hai Ng, a co-founding partner at technology strategy and management group Neomancer, featured several experts in the field who shared opinions on how regulating esports can contribute a “pandemic-proof” option for gross gaming revenue for certain jurisdictions.
As Ng mentioned when introducing the topic, “Most jurisdictions that didn’t have online and alternatives to physical sports games were basically shut down for at least the second quarter of the year [2020] if not up to the third quarter of the year.” Ng also noted that the disruption caused by the Covid-19 pandemic has not yet ceased its effects.
“Even right now there are a lot of disruptions in sports here in the U.S., where activity comes and goes. Every time somebody tests positive, games stop and schedules change,” he said.
Acknowledging the advantages of esports, Ng said that the fact that the organization of such events is mostly online-based, even if some events are physically held at a venue, means that situations such as the Covid-19 pandemic will not only have a minimal effect on these kinds of activities compared to sports activities, and that they also have the advantage of being much easier and faster to adjust to ever-changing conditions and last-minute restrictions related to the pandemic.
Michael Keown, head of operations of Askott Entertainment, added, “Covid-19 brought [above all] a new attitude to the larger companies [which have disregarded esports in the past]. Now they are paying added attention to esports and I think that will be a permanent change.”
For Keown, this additional attention and allocation of resources from large corporations might “push regulators to pay attention to this,” accelerating the process of regulating the area.
During her turn, Brett Abarbanel, a director of Research at the University of Nevada, Las Vegas International Gaming Institute, noted the regulatory framework created by the Isle of Man was a good example. She said that a problem that often arises during attempts to address esports regulation is the definition, as “most of the time, the word is used to define a large number of activities that, in a way, fall under the umbrella of esports.”
For Abarbanel, in the process of regulating the activity, it is of great importance to come up with a regulatory system that includes several other aspects that are being discussed at the moment, such as the possible use of cryptocurrencies. Above all, regulators need to understand that this is an area that is far more dynamic than other forms of gambling or betting, so regulation needs to be flexible enough to allow for constant changes and upgrades to remain up-to-date with the developments in the field.
G2E Asia is scheduled to resume in-person events in Macau from May 25 to 27 this year.