The e-sports industry has grown rapidly in recent years, with audiences now comparable to traditional sports like tennis and basketball. As the industry expands, online betting on e-sports has also increased, leading to vulnerabilities like match-fixing and betting fraud. While groups like the International e-Sports Federation aim to promote integrity, there is currently no single regulator, and the growth of the industry could expose young fans to gambling risks if not properly addressed. As e-sports continues to boom, it will need effective governance and rules around betting to maintain its integrity as it has become more closely associated with sports betting.

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The crowd cheers during an international League of Legends tournament
in Paris, June 2014. The E-sports industry has seen rapid growth in
recent years, with audience numbers comparable to traditional sports
T
he phenomenon of E-sports – video game
matches and tournaments – is growing so
rapidly that while it is not considered a sport
in the traditional sense of the word, it is taking
on characteristics that merit attention, and that may
provide lessons for the traditional sport sector.
Worldwide audiences for E-sports are now at levels
comparable with sports such as tennis and basketball,
and are expected to grow further in the next five years.
The importance of the sector is such that the United
States granted professional athlete visas for League
of Legends players in 2013.
In 1997, the first professional E-sports league was
established, and since then the scene has grown to
incorporate hundreds of tournaments. In the past two
or three years, this growth has been manifest in well
The rise of E-sports:
vulnerabilities and opportunities
Jake Marsh examines the rapidly growing E-sports sector, highlighting its
vulnerabilities to match-fixing operations and betting fraud, and suggesting that
these problems represent an opportunity to explore better models of governance
attended stadium-style events, huge prize funds
(some are more than $10 million), sponsorship
(Coca-Cola and Red Bull, among others), advertising,
worldwide followers and mass participation. In January
2015, WME | IMG announced its acquisition of the
talent agency Global eSports Management (GEM),
effectively moving the sport business giant into
professional gamer representation for the first time.
The expansion of the industry is soon to be
exemplified by the launch of Britain’s first dedicated
E-sports stadium in London. Scheduled to open in
March, it will accommodate up to 600 spectators for
each event. The company behind this venture, the
online platform Gfinity, is reportedly investing £350,000
($521,000) to upgrade a cinema venue and will expand
to similar sites in the United Kingdom. Platforms such
LionelBonaventure/GettyImages

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as Gfinity also offer gamers the opportunity to subscribe
so they can compete against others or watch live matches.
The site E-sports Earnings lists the top 100 players
by winnings – and shows that the top five gamers, all
from China, have each earned over $1 million, while the
person that is ranked 100 has made more than $200,000.
South Korea, considered the birthplace of E-sports, saw
around 45,000 people attend the Sangam Stadium, which
was used for the 2002 FIFA World Cup, for the League
of Legends World Championships. The prize fund for the
tournament totalled just over $2 million. The games in
question are mainly real-time strategy games (RTS), such
as Dota 2 and Starcraft, and massively multiplayer online
games (MMOs), such as Counter-Strike: Global Offensive.
As part of the X-Games in Aspen in January 2015, a
Counter-Strike tournament was included with teams
competing for gold medals and prize money. According
to one video game research company, there were over
89 million E-sports enthusiasts watching livestreams
of professional gamers playing tournaments in 2014.
These are just some of the dynamics associated
with the sport’s growth. It should come as no surprise,
then, that a sport dependant on the
internet – its growth is largely due to
the ability to stream live matches –
for its existence should also be seeing
a rise in online betting interest and,
as a consequence, betting fraud and
match-fixing. Even court-siding could
become an issue. There are already
reports of individuals gaining access
to tournaments in order to place bets
ahead of the ‘live’ stream, which is
often a few minutes behind.
While E-sports has only seen significant uptake in
recent years, betting markets are offered already, for
example, through companies such as Pinnacle Sports,
188Bet, William Hill and bet365. This simply reflects how
quickly the connected electronic market moves. Asian
bookmakers CMDbet and MaxBet (previously known as
IBC Bet) have also entered the market. Typical bets include
‘match-winner’, ‘match handicap’ and ‘total rounds’.
The demand for betting on competitive gaming is
growing. Established betting providers such as Pinnacle
Sports, which has its own E-sports ‘hub’, offer a variety
of ways to bet, as do sites for the games. Pinnacle Sports
announced on 18 December 2014 that it had accepted its
one-millionth E-sports bet. The company says this type
now ranks above golf and rugby in terms of popularity
with its bettors and is now also sponsoring some events.
Some games have betting sites targeted at fans,
such as CS:GO Lounge for Counter-Strike. It has its own
gambling portal, details of upcoming matches with odds
and even includes video guides to betting. It also allows
individuals to place bets with in-game items – which are
predominately weapons. They have values attached to
them, and thereby winnings and losses are calculated.
Crucially, these items can be resold on specialist websites
in exchange for actual money.
There have already been a number of instances of
alleged match-fixing in E-sports tournament matches
and, as the industry’s popularity continues to grow, there
is a strong possibility that these will grow in proportion.
The majority of fixes to date have been ‘favourites’
betting on opponents and deliberately losing matches.
As with other sports, match-fixing has occurred when little
or no prize money has been on offer, but rewards are still
possible through betting fraud. In this way, match-fixing
can be driven by players themselves looking to maximise
the reward from being involved in tournaments, especially
when no prize fund is available.
The E-sports industry has reportedly seen a rise in
match-fixing cases, whereby players have either been
bribed to lose, have placed bets on the outcome of a
match they were playing in and lost deliberately, or had
friends bet on them to lose. Moreover, heavily favoured
teams have been accused of deliberately performing
badly, and allegations of gamblers being linked to losing
sides have surfaced. In the past few months, Valve, the
company behind Counter-Strike, has banned several
players from tournaments as a result of a match-fixing
investigation and improper use of insider information.
The gaming site PCGamesN reported that an assistant
team manager alleged on Twitter that match-fixing has
become endemic in the professional Korean Starcraft 2
scene. The assistant team manager also suggested that
some professional players are conspiring with gamblers to
fix results. Furthermore, the report indicated that Korean
gamblers are sponsoring tournaments in order to gain
access to competitors and matches. The betting link to
match-fixing may be made more complex by some betting
sites offering the option to make wagers using bitcoins,
which essentially allow owners to bet anonymously. The
benefits for match-fixers are therefore easy to see.
Safeguarding players
Despite the evident popularity and enjoyment gained from
E-sports, there is now arguably – in the way it is currently
developing – a significant risk of children and young
people being exposed to gambling, betting fraud and
match-fixing. These represent risks that their parents,
and they themselves, are possibly not even aware of.
This is not to say betting firms are part of the
problem. They will have appropriate systems in place
to prevent underage gambling. It is also the case that
companies such as Gfinity, which organise tournaments,
place age restrictions on both entrants and spectators.
The Gfinity Call of Duty: Advanced Warfare Open taking
place in April 2015 states on its website that players and
audience members must be over 18. This is done in line
with the Pan European Game Information (PEGI) rating.
This is a good example of a responsible approach.
However, it is likely that as E-sports grow, so will the
associated betting markets, which could see poorly
regulated or illegal betting sites become a reality.
Favoured teams have been accused
of deliberately performing badly, and
allegations of gamblers linked to losing
sides have surfaced
Robyn Beck/Getty Images
Imaginechina/Corbis
League of Legends players compete at the International E-sports
Festival in Wuhan, China. The top five earning players in the world all
originate from the country and have each made more than $1 million
Cloud 9 team members following the action
during a 2014 League of Legends tournament in
California, US. It was estimated that 89 million
people tuned into live tournaments last year

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The CS:GO Lounge website mentioned earlier has a
rules section, which includes the following: “By placing
a bet on CSGO Lounge you are confirming that you are
in abidance with your country’s laws which allow you to
participate in skin-betting. This is generally 18 years of age
or older, but make sure to check. If we have any questions
regarding your age, we have the right to freeze your
account and ask you for documents to confirm your age.”
The website, eSportsventure.com, registered in Malta
and regulated by the country’s Lotteries and Gaming
Authority, has a registration page to set up an account
and a tick box to declare you are over 18. Similarly,
egamingbets.com, located in Costa Rica (where betting
websites can operate if they are serving foreign markets,
and which is known to have a lax attitude to gambling
regulation), provides drop-down menus to ‘prove’
your age. Therefore, it would appear there are limited
safeguards in place on such sites to prevent children
and young people from betting using other people’s
(such as parents’) credit card details.
ICSS Journal spoke to Betfair, which confirmed they
do not offer E-sports gambling. They made it clear that
preventing underage gambling is paramount to them,
not only from a moral angle, but also from a licensing
perspective. This is something that E-sports will, at
some point soon, need to address. Betfair has rigorous
checks and processes in place to prevent children and
young people from gambling. This includes electronic
checks after registration in order to verify age, address
and identity. If these initial checks prove inconclusive,
registrants are then required to provide alternative proof
of identification and address.
Ethics in governance
Paul Buck, Founder of EPIC Problem Gambling
Consultancy, told ICSS Journal that there are already
60,000 known problem gamblers in the UK between
11-15 years old, but he believes the real figure is probably
much higher and will never be known. The number of
young people exhibiting problematic behaviour has risen
sharply due to online gaming, which is widely available
through apps such as Bejewelled and Candy Crush. These
games offer similar transactional emotions as gambling,
from lining up symbols to the ‘near miss’ sensation. There
is also the continual temptation to buy extra credits or
enhancements offering ‘rewards’ or ‘powers’.
E-sports have a relationship with popular games
played on PCs, X-boxes and Playstations across the globe.
These can have an instant attraction for young people,
who will want to get involved. Buck believes that, just as
gambling has become normalised with sport, the E-sports
market could go the same way, helping to create a ticking
time-bomb of gambling addicts in the coming years.
The International e-Sports Federation (IeSF) is based
in Seoul, Korea and has 43 member nations from Europe,
Asia, Africa, North and South America and Oceania. It is
not clear what oversight the IeSF has over these countries’
tournaments, or those that are not member nations,
such as the UK and US. It does not have jurisdiction
over privately organised tournaments, however, one of
the federation’s future priorities may be to increase its
influence and establish a set of regulations that can be
implemented in those events. The IeSF Statute does include
references to integrity, fair play, ethics and preventing
manipulation. While this is laudable, it may be that the
body needs to augment these with specific rules around
betting and match-fixing, as these are not included in their
Competition Regulations, which mainly appear to focus on
world championships and not tournaments in general.
Chul Woong (Alex) Lim, Secretary General of the
IeSF, who is responsible for organising and operating
world-championship level e-Sports tournaments, is also a
Non-Executive Director of VGambling, an internet betting
company licensed in Canada and
Antigua. VGambling’s website says
it intends to bring the worlds of video
gaming and betting together so that
it can “lead a global ‘online video
gambling’ industry.”
The President and CEO of
VGambling, Grant Johnson, told
ICSS Journal that he believes
E-sports have a great opportunity
to put in place best practice in relation to betting and
match-fixing, and that “integrity and transparency are
critical to the future of this business”. Regarding betting
markets, Johnson stated that at present “from what we
have seen, most E-sport betting is taking place in a grey
market environment.” He believes companies operating
in this space need to be properly regulated and licensed.
Johnson says VGambling takes a “proven practices
approach”, whereby it utilises services that have been
market tested in the casino business and modifies them
for the E-sports market. They can ensure the location of
the individual placing the bets is from a jurisdiction where
the activity is not illegal, along with age verification of all
players wishing to open accounts.
Lim says that research is still taking place at the IeSF
on the best measures for regulating suspicious activities.
However, he echoes Johnson’s opinion that working with
the gambling industry is vital for protecting the integrity
of E-sports, but “it will be the priority thing to investigate
who will be the proper partner for this”.
On the position of Lim at VGambling, Johnson stated:
“It is conceivable some might see this as a conflict as
that might suit their purposes to do so. However, as
VGambling has no current relationship with the IeSF we
do not see this as a conflict at all. Mr Lim is an outside
Director whom we feel is one of the top experts in the
field of E-sports and brings a wealth of knowledge that
helps us better understand the nuances of the cyber
athlete and their fan base. We would never ask him for
any information that would put him in a conflict with his
position at the IeSF as clearly it would not be in our best
interest to ever jeopardise that relationship.”
Lim confirmed this, telling the ICSS Journal in an
e-mail: “For my position at VGambling, this is nothing
to do with IeSF since there is no connection or any
information sharing between these two parties. As one of
the [experts] in sports marketing business and E-sports
field, I am just providing proper guidance so VGambling
can work in [the] E-sports [field] in proper and legal
manner as ‘outside non-executive director’.”
Valve prohibits professional players, as well as
team managers and anyone involved with setting up an
event, from betting on matches. It also advises players
to hold themselves to a high standard of integrity and not
associate with bettors or pass on any inside information.
However, these are only “recommendations” and it is not
clear how it can be enforced or monitored.
As with many sports, betting is becoming ever more
closely associated with E-sports and, as an industry, it will
need to consider how this relationship can grow in such a
way that allows for investment, but does not damage its
integrity and image. Traditional sports have had to evolve
their rules on betting and oversight of issues related to it,
and E-sports will need to do the same if it is to continue
its huge surge forward and the level of success to date.
It is clear that in tandem with its phenomenal growth,
there are questions of integrity surrounding the E-sports
industry. In some instances this has already been linked
directly to betting fraud and the symptomatic match-
fixing that occurs. While game developers and tournament
organisers are now more aware of the risks associated
with betting, no single organisation currently regulates or
protects the industry from betting fraud or match-fixing.
Having said this, the relative immaturity of E-sports
also provides the unique opportunity to explore better
ways to manage the areas of betting, match-fixing and
corruption. And it is also clear that these issues are on
the radar of those who want to see the sport progress
successfully in a clean way, from players and developers
to licensed betting operators. Johnson comments that “to
be sure the match-fixing by pro players should be under
their [IeSF] regulatory oversight, as for betting the IeSF
could always model themselves after the major league
sporting organisations NFL, MLB, where betting by players
on league games is illegal and VGambling would be
supportive of such a move.”
All quotes attributed to Chul Woong (Alex) Lim are his
personal opinions and do not represent the views of the
International e-Sports Federation
Jake Marsh is the Head of Training and Youth Protection
at the International Centre for Sport Security
It is clear that in tandem with its
phenomenal growth, there are questions
of integrity surrounding E-sports
JessicaRinaldi/Corbis
A player dressed in costume concentrates on a computer game at the
PAX East gaming conference in Boston. The growing risk of betting
fraud and match-fixing in E-sports is also putting young people at risk