eSports is facing a considerable growth, but its qualification as gambling, social gaming or prize promotion is based on a detailed review of the features of the game.
I discussed in the past about the regulations governing eSports with cash winnings, the launch of bets on eSports in Italy and the narrow distinction between gambling, social gaming and the complex regime applicable to prize promotions. But how are these principles applied to eSports games?
Lack of elements of chance? you are not on the safe path!
The position in other jurisdictions is that if the elements of skill prevail in eSports over elements of chance, there are no major restrictions to the offering of the game that cannot be qualified as gambling.
It is true that the absence of elements of chance can avoid the applicability of Italian gambling regulations, but prize promotions regulations would still apply, obliging to comply with the strict procedure required by Italian law. Indeed, prize promotions regulations apply both to games of chance and skill games and prohibit both any payments in cash and in kind as well as any cash winning.
In relation to the above, an interesting case law has been proliferating on the qualification of live poker tournaments as skill games rather than gambling, if some conditions are met. And the same reasoning might be applicable to eSports under certain circumstances.
Watch payments and winnings
Most of the discussions around the qualification of social games, including eSports, concern the presence of any amount to be paid in order to play and the type of winning to be awarded.
If players are paying in cash in order to participate to an eSport tournament which contains elements of chance and obtain a winning in cash or in kind with economic value, the game might be considered gambling. On the contrary, if the winning sits within the game and players are only allowed to pass for instance to the next stage of a tournament where they will not win anything other than the possibility to continue playing, it might be argued that that no gambling rules or prize promotions regulations apply and this is a mere social game.
And what about bets on eSports?
Bets on eSports with cash winnings fall under gambling regulations. But, what about bets on eSports with prizes in kind? In such case the response is not unique since this conduct might amount to a mere prize promotion, but authorities might also try to argue that this is a solution aimed at by-passing gambling regulations.