Lines between esports, gaming, gambling blurred

Around the time KL Rahul of Kings XI Punjab was taking down Virat Kohli’s Royal Challengers Bangalore in the IPL last week, Lawrence The Beast Incarnate was fighting off Brutal Death in the ESL India Premiership. Live esports has a fast-growing following in India, estimated to be nearly 20 million currently, as tournaments like ESL have received backing from mainstream sponsors such as Airtel and exposure on channels like Hotstar.

Despite the evolving digital culture in a country with over 500 million smartphone users, India is yet to recognize esports as a real sport involving speed, agility and strategy like traditional sports. China was one of the first to do so in 2003, and over 50 other countries have followed suit since then. Neighbouring Sri Lanka declared it an official sport last year, after 150 schools participated in an inter-school esport championship. Last month, Indonesia recognized esports and included it in the national games. The 2019 Southeast Asian Games in the Philippines had esports as a medal event. Video games like League of Legends and Pro Evolution Soccer featured in demonstration events at the 2018 Asian Games.

This month Ukraine became the latest to recognize esports. Government recognition means esports teams from Sri Lanka, Indonesia and Ukraine can participate in world championship events representing their countries, just like the BCCI’s cricket team represents India in the World Cup. Apart from being a matter of pride, official recognition brings regulatory clarity.

No framework

Right now, because of the scant attention that esports has received from the Indian government, lines between esports, competitive gaming and fantasy sports get blurred, causing confusion. What involves skill and strategy and where it verges on public gambling are also obfuscated in the absence of a regulatory framework.

The first step would be categorization of the different forms of gaming. When teams enter an esports tournament and play for prize money, showcasing the best video game players to a mass audience, the model is similar to IPL. It has players, franchises, sponsors, broadcasters and advertisers.

Fantasy sport has a different proposition. Here you create a virtual team, whose performance is linked to that of players in a real event like IPL. For example, you could pick the names of players participating in Kings XI Punjab vs Royal Challengers Bangalore and form a fantasy team according to rules set by a platform like Dream11. Your team would gain points based on the real performance on the ground.

The betting element comes in when you pay money to register your virtual team for a contest with other virtual teams. Here the winners gain money from the losers, with the platform taking a cut. Courts have so far ruled that picking a fantasy team involves strategy, and so it doesn’t come under the purview of gambling, like in a card game or roulette that’s based more on chance.

The skill vs chance question is hard to resolve because there are varying degrees of each in sports, including traditional ones like cricket. The laws that courts interpret to make judgements on this, based on the 1867 Indian Gambling Act, are also archaic. Hence the need for a regulatory body that considers the different models of online gaming.

The business model of fantasy sports differs from esports. You cannot download Dream11 or any fantasy sport app from Google Playstore because it treats it like an online casino. Whether you agree with Google’s policy or not, there’s no gainsaying that fantasy sports, competitive gaming and esports cannot all be clubbed into the same category as they tend to be.

On a competitive gaming platform, players pay to play and their success depends on the monetary loss of other players. This makes the business model more like a stock trading platform than an esports event where teams play for prize money supported by media rights. It differs in skill level, as gully cricket is different from IPL.

Esports ecosystem

The title sponsorship of IPL by Dream 11 and sponsorship of two teams by MPL has drawn attention to fantasy sports platforms, with questions being raised on promotion of a betting culture. This raises the hackles of the online gaming community that considers itself “the real deal.”

“We want to dissociate ourselves from all this noise,” says Akshat Rathee, co-founder and MD of Nodwin Gaming, which conducts top-tier esports tournaments like ESL India Premiership. "The total amount of investments done in esports businesses in India is less than $10 million, whereas the total investments in real money gaming is over $1 billion."

For Rathee, esports promotes skills in demand in the digital age. “The US military has been recruiting gamers for its Predator drone programme. South Korea exempts its elite gamers from conscription. If you’re a top gamer in China, you have a job opportunity in the strategic defence force. Gamers get multitasking and super skills for emerging domains. It’s both sports and a harbinger of the future.”

He feels government recognition of esports and disassociating it from betting-oriented models would promote a healthy ecosystem where gamers can showcase their skills at university, national and international levels just like in other sports, instead of putting their money down in competitive gaming and fantasy sport contests. At the same time, he acknowledges the addictive concerns around gaming.

“Parents complain that I’ve got their children into esports and they’re spending 9 hours a day practising. I tell them the kids are pulling wool over their eyes. They’re playing, not practising,” says Rathee. What he means is practising for esports requires as much discipline as a cricket practice session involving various exercises.

Rathee, who is known as an “esports professor,” started gaming “when I was six.” He had a career as an investment banker with Ernst & Young which he left to start his own practice. About eight years ago, he and his co-founder, Gautam Virk, went to play in a tournament in Noida called the Indian gaming carnival.

“It was an unmitigated disaster. If you’ve seen the Netflix documentary Fyre Festival, it was that. People were beaten up, we had things stolen from us, there was no electricity and the organizers had run away. We basically got swindled,” recounts Rathee. That was the trigger for him to conduct gaming tournaments himself and he spent the next couple of years learning how difficult that was going to be.

“My first sponsorship was returnable mouse pads.” From there, Nodwin grew to an annual turnover of a few million dollars. A couple of years back, it sold a majority stake to Mumbai-based gaming company Nazara.

Challenges remain aplenty. Social distancing has reduced scope for physical esports events with spectators. But Rathee believes India can be a “superpower” in mobile esports because most gamers in the country take to it on smartphones unlike the PC culture of the West.