What is Esports Law? What is an Esports Lawyer?
By Justin M. Jacobson, Esq.
Esports has become a new buzz word among industry professionals and the masses alike. “Esports” refers to “electronic sports” and is the world of professional competitive gaming. It usually involves an individual or a team competing against others in an organized league or tournament in a video or computer game. These competitions are usually for cash prizes, including some that award the winner several million dollars. Recently, in addition to the growth in the total prize winnings offered, a series of professional gamers and streamers are garnering substantial annual salaries (sometimes six figures or more) to compete on behalf of esports organizations and teams. In addition to these income streams, some players and gaming influencers have also received lucrative sponsorship and brand partnership opportunities. This is all in addition to any streaming and social media advertising revenues as well as any other merchandise and licensing income that they may generate.
As a result of the substantial earnings of these gamers, there has been a development of an entire professional industry to support them. This includes seasoned as well as upstart attorneys, agents, accountants and wealth managers who have begun focusing on assisting individuals involved in the professional gaming industry. This mirrors the myriad of professionals who have traditionally worked in the entertainment, music, motion picture, television, fashion and sports worlds. In fact, similar to sports attorneys and entertainment lawyers; being a practicing “esports lawyer” has become a budding field in the industry. Additionally, there has been the development of a specialized bar association, the Esports Bar Association, established by practicing esports attorneys.
In the same way that there is no easy way to define what “sports law” or “music law” entails, the definition of “esports law” had yet to be clearly articulated. While, there are many parallels to the experience that an attorney who assists entertainers, athletes, and other talent may possess; nonetheless, there are still many unique aspects of esports law that involve novel matters mainly applicable to competitive gaming professionals. These individuals may include a professional gamer or coach as well as a streamer or content creator. They might also include a professional esports team or organization as well as any third-party who works with any of these parties. For instance, this could include a merchandise, gaming peripheral or hardware company that works in the space, such as a mouse or keyboard brand. A potential client might also be a live esports event production entity; or, even a streaming or broadcast company. These are entities that actually televise, stream or otherwise license existing esports content.
Similar to other talent-focused areas of the law, esports law encompasses a variety of different legal fields. One of the central legal disciplines involved is intellectual property. Within this, the two most applicable to competitive gaming professionals are trademark and copyright law. For instance, trademark law can be utilized to protect an esports organization’s name as well as to secure rights to a professional gamer’s “gamer-tag” or “nickname.” Similarly, copyright law may be utilized in the licensing of any original content, like live tournament streams or other created works. There are also related player “likeness” and “right of publicity” issues. This is because many of the top gaming influencers have created a significant, independent commercial value in their “likeness” and “image.”
Another central legal area is contract law. Similar to most other talent-based industries, many professional gamers and streamers sign a formalized (generally written) document with their employer. In most cases, this would be an agreement with the esports team. Likewise, a professional coach or broadcast announcer (referred to as a “shoutcaster”) may also negotiate and execute a written agreement. Additionally, an esports organization or an individual gamer may enter into sponsorship and brand partnership deals with a third-party company as well as may require assistance in formalizing and negotiating licenses of their intellectual property assets to others.
While generally applicable to professional esports organizations and ancillary gaming companies, an additional practice of law within the esports realm is business law. This includes the formation and proper maintenance of limited liability entities, such as a corporation, limited partnership or L.L.C. Furthermore, as a party grows, some may look to secure third-party investments in their companies. These cases may then also involve traditional investment and mergers and acquisition legal concepts as well as other corporate finance issues.
As with most for-profit ventures, esports also encompasses tax law. This includes the personal taxes applicable to an individual’s income, such as their salary, sponsorship revenues and tournament winnings as well as any related business deductions. Since the competitive gaming scene is global, many esports competitors may generate income from a variety of countries and states. This fact invokes international tax considerations as well as presents long-term wealth management situations that might require legal consultation.
Since the competitive gaming circuit is an international one, any professional wishing to travel to another country must obtain proper work authorization to compete in a tournament or in order to earn a salary. This includes the party complying with any local visa and other immigration requirements. As a result of this need, immigration law plays a central role in esports. This includes assisting professional gamers and coaches in obtaining the proper work authorization to compete and earn income within the United States. A practitioner may also assist an American citizen in securing proper authorization to play in another country.
As with most businesses, there may be additional legal considerations related to any third-party personnel involved in a company’s operation. In particular, employment law and other work-place related legal matters may come into play. In light of recent legislation addressing the proper worker classification, these issues may also be particularly important for teams. Specifically, these types of clients might require assistance in understanding the different personnel designations and the legal implications of being labeled as an “employee” versus an “independent contractor.”
Finally, another highly relevant area is digital communications and internet law. This includes proper compliance with established Federal Trade Commission standards and expressed guidelines for social media “disclosure” and related marketing techniques. This is relevant because a large portion of the gaming industry is based in digital space. Specifically, many of these esports entities typically derive substantial income from utilizing social media and other digital outlets for commercial purposes, such as Twitter, Twitch, Facebook, Instagram, and YouTube. In addition, there may also be data privacy considerations that might need to be addressed and properly managed. This is especially true for parties operating within the European Union.
While, this is not an exhaustive list of every legal issue that a party involved in the competitive gaming and esports scene encounters, it is meant to highlight some of the most common legal issues encountered. Ultimately, the entire legal profession seems to continue to progress as the global esports scene expands and evolves over time.
This article is not intended as legal advice, as an attorney specializing in the field should be consulted.
© 2020 The Jacobson Firm, P.C.