However, the meteoric rise in popularity of esports has not been matched by implementation of appropriate facilitative and protective laws, paving the way for a slew of regulatory and ethical complications that could stymie the progress of esports in the country.

Regulatory Landscape

Apex Regulatory Federation

In March 2021, for the first time the Indian government acknowledged esports as an emerging discipline and identified its distinction from gambling/igaming since it is skill-based. While India does have esports federations like the Esports Federation of India (“ESFI”) which the Indian Olympic Association intends to recognise as the apex body for esports in the country, none of the federations have (so far) been recognised by the Ministry of Youth Affairs and Sports to regulate esports in India. Such recognition would provide legitimacy to the industry and support curtailing of certain impending issues besmirching esports including identity deception, match-fixing, fraud, betting and doping. The Electronic Sports Integrity Commission (ESIC), an international organisation which aims to combat such malpractices, mandates that members (including ESFI) abide by its anti-corruption, anti-doping and other codes of conduct failing which penal consequences apply (including a lifetime ban from competing in any esports event in case of a breach). However, without any government regulations, these codes are not binding on tournament organisers and their imposition therefore remain voluntary.

Conflict of Interest

Esports are primarily a marketing tool for gaming developers/companies that create and distribute the underlying video games, and license them to leagues and tournaments for a fee. So, unlike regulators/governing bodies, these publishers/companies are not incentivised to advocate for strict standards of play and professionalism across the industry.

So, although some game developers that organize leagues and tournaments have been known to tailor certain decisions basis regulations localized to certain nations, India largely faces an additional challenge since most game developers are based outside the nation and exerting the desired level of control over such events becomes challenging. Regulatory support can help reign in developers’ influence while still defending the interests of developers, players, team owners, and other stakeholders.

Contractual Issues

A majority of today’s esports players are minors. They are ill equipped and lack the bargaining power to address the power imbalance between the game publishers, esports teams and themselves, due to which they often end up agreeing to unfavourable contractual obligations. These contracts can have a considerable impact on players’ earnings, job security, and individual rights. If the sector were to be properly regulated, clear systems could be established for esports players to earn academic scholarships, or even viable high-paying professions (as currently enjoyed by more traditional athletes / professional sports personalities). Illustratively, in France professional gamers are subject to the French Labour Code making them eligible to certain social benefits. South Korea mandates that contracts with professional esports players be for a minimum period of one year with a minimum stipulated salary.

Way Ahead

Esports is predicted to eventually surpass traditional sports in terms of global prominence and viewership which has even led to the prospect of integrating esports as an Olympic sport. However, the esports industry is currently beset by certain issues which are counterintuitive to its long-term growth.

India has been a strong global player in the technology and animation/VFX fields. Esports streaming/broadcasting in India is now no longer limited to YouTube, Twitch etc., as there are several Indian homegrown streaming platforms. The trajectory and prospects of the sector renders it ripe for funding. If the Indian government now steps in and establishes a regulatory body to govern esports in India (to address its unique and sensitive aspects) such support will befittingly untap the true future of the sector in India by balancing global standards with the interests of all stakeholders and sustainably cement India’s position as a serious global player in the sector.

This article was originally published in The Economic Times on 24 August Co-written by: Mithun V. Thanks, Partner; Anjali Menon, Partner; Aman Agarwal, Associate. Click here for original article

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