Earlier this month, a set of gaming industry representatives agreed upon and released a set of unifying esports principles. These representatives include the Entertainment Software Association (ESA), as well as associations from Canada, Australia and New Zealand, the UK, and Europe. These “Principles of Esports Engagement” were developed in a collaborative effort and form a set of values applicable in all aspects of the global esports environment.
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Mark Patrick
All Bets are On! Gambling and Video Games
How the Evolution of Games Has Led to a Rise in Gambling Concerns
Recently, there has been a frenzy of legal activity with U.S. gambling laws and the number of gambling-related legal issues with video games. U.S. gambling laws have changed more in the past few years than they have in a long time. Significant state law changes have occurred concerning online gambling, sports betting, fantasy sports, and skilled-based games, to name a few. Some significant recent changes under federal gambling law have also occurred. The evolution of certain aspects of games by the game industry—particularly those involving loot boxes, casino-style games, and chance-based mechanics with virtual items—has raised the perception of certain gambling-related issues. Despite being prohibited by game publishers, players’ engagement in unauthorized activities (e.g., selling virtual items on secondary markets and “skin gambling”) have exacerbated these issues. The financial success of these monetization techniques has led to greater legal scrutiny. The rise of eSports has also implicated sport betting issues.
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Are Loot Boxes An Illegal Gambling Mechanic?
A member of the United Kingdom’s Parliament has opened an inquiry into the legality of loot boxes. Loot boxes are virtual items that may be redeemed to receive a randomized selection of additional virtual items. Various countries around the world have recently moved to regulate the provision of loot boxes in video games, often in response to inquiries from consumers or legislators, such as the aforementioned inquiry in the UK. This leads to the ultimate question: are loot boxes legal? The linked article below addresses this question and several other issues related to loot boxes.
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eSports on the Rise as Collegiate Sport
Across the country, colleges and universities are turning to eSports as a new addition to their athletic programs. Earlier this year, the University of Utah became the first school from a major athletic conference to offer varsity eSports. With an increasing number of institutions offering scholarships to the top high school video gamers, a single administrative body will likely emerge to regulate recruiting, monitor the amateur status of participants, and govern other issues related to the bourgeoning collegiate sport.
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eSports League Expands with Addition of NFL Owners and Cloud9
Activision Blizzard’s Overwatch League gained two new teams this month as Stan and Josh Kroenke, owners of the Los Angeles Rams and numerous other professional sports franchises, and Jack Etienne, founder and CEO of American eSports organization Cloud9, each acquired a team in the expanding league. The team acquired by Stan and Josh Kroenke will be based in Los Angeles, and the team acquired by Jack Etienne will be based in London.
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DraftKings and FanDuel Call Off Merger Following FTC Intervention
On July 13, 2017, daily fantasy sports providers DraftKings and FanDuel announced their decision to call off their proposed merger. Last month, the United States District Court for the District of Columbia issued a temporary restraining order, blocking the proposed merger until a decision can be reached regarding the complaint filed by the Federal Trade Commission (FTC). The FTC’s complaint alleges that the merger would create a monopoly in the market for paid daily fantasy sports contests in violation of Section 7 of the Clayton Act.
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U.S. Supreme Court Set to Address Sports Betting
On June 27, 2017, the United States Supreme Court agreed to hear a challenge to a law that prohibits individual states from permitting gambling based on professional or amateur sports. The Professional and Amateur Sports Protection Act of 1992 (PASPA)—the federal law being challenged—effectively outlaws sports betting nationwide minus exemptions for a few states, including Nevada.
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Vermont Becomes Second State to Legalize Daily Fantasy Sports in 2017
On Thursday, June 8th, Vermont Governor Phil Scott signed into a law a bill that legalizes and regulates the operation of paid-entry fantasy sports contests within the state. Vermont is at least the eleventh state to pass a bill legalizing some form of fantasy sports and the second state to do so in 2017.
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New Challenge to Daily Fantasy Sports in New York
A group of New York citizens backed by the anti-gambling group Stop Predatory Gambling has filed a lawsuit against New York Governor Andrew Cuomo challenging the constitutionality of the bill that legalized daily fantasy sports in the state. The lawsuit contends that the law violates the Constitution of the State of New York because a constitutional amendment is needed to legalize a new form of gambling. This is the latest development in the ongoing legal battle over daily fantasy sports in New York.
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Massachusetts Becomes Ninth State to Legalize Daily Fantasy Sports
Massachusetts Governor Charlie Baker has signed into law a bill to legalize daily fantasy sports in the Commonwealth. Massachusetts is the ninth state to legalize daily fantasy sports, and the eighth to do so this year. The legalization of daily fantasy sports, or “fantasy contests,” was included in a larger bill—H. 4569—related generally to job creation and workforce development.
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New York Legalizes Daily Fantasy Sports
Governor Andrew Cuomo signed into law a bill to legalize daily fantasy sports in New York. This is the eighth state to legalize daily fantasy sports, and the seventh to do so this year. With the start of the NFL season just around the corner, the timing of this development is especially fortuitous, as daily fantasy sports operators who had run contests in New York prior to November of 2015 may receive temporary permits to continue doing so.
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