Collegiate esports: an expanding “field of play” with emerging legal implications

Collegiate esports: an expanding “field of play” with emerging legal implications
Saul Ewing Arnstein & Lehr's Higher Education Highlights Summer 2019
Amy Piccola, Andrea Brockway
Saul Ewing Arnstein & Lehr's Higher Education Highlights Summer 2018

Electronic sports (esports), also known as competitive video and computer gaming, continues to boom in popularity.  Esports is a spectator-driven phenomenon: some reports estimate the global esports audience will total 456 million in 2019, a sizeable increase from the 395 million-person audience in 2018, and industry revenue generated in 2019 could reach nearly $1.5 billion. (1-2)

This explosive growth is notable at the collegiate level.  The National Association of Collegiate Esports (“NACE”), a nonprofit membership organization focused on growing and advancing collegiate varsity esports, reports that at the time of its inception in 2016 only 7 colleges and universities had varsity esports programs; NACE now reports 130+ member institutions, 3,000+ student athletes, and $15 million in esports scholarships and aid.(6)

The collegiate “field of play”

According to one report, 51 percent of college students believe that esports athlete is a viable career. (7) Recognizing the trend, many institutions of higher education are leveraging collegiate esporting opportunities as a recruitment tool to draw a broader student population.  Some schools have developed a specialized esports curriculum while others recognize “official” esports teams and offer esports scholarships.  By investing in esports programming, colleges and universities may also attract – and draw revenue from – a new and different fan-base from that of their traditional collegiate sports teams.  Popular games such as League of Legends (“LoL”) and Rocket League feature official collegiate leagues. (8)  More than 80 colleges have official LoL teams,(9)  and many schools offer scholarships specifically for LoL gamers. (10)   Tespa, a collegiate esports organization including a network of college chapters, ESPN, and others, have held widely popular esports competitions in arena-sized gaming venues.  In May 2019, ESPN Events (teaming up with Tespa, Collegiate StarLeague, and others) held its first ever collegiate esports championship, with 22 qualifying teams from 20 higher education institutions.  All 5 of the winning teams will receive scholarships. (11)

The “rules of the game”

With rapid industry growth in the past year alone, there have been some apparent growing pains, especially relating to the collegiate level governance of esports.  The NCAA’s Board of Governors decided on April 30, 2019 to shelve the prospect of the organization’s oversight of esports and the holding of esports competitions.(12) Prior to this decision, NCAA president Mark Emmert had expressed concerns with diversity and inclusion in esports. According to statements made by President Emmert at the organization’s annual conference this past January, 95 percent of esports competitors are male. (13) Emmert is also reported to have cited concerns of “misogyny” and “violence” in esports content, and “concerns about health and wellness around those games.”(14) To that end, the NCAA’s recent decision to decline adoption of college esports is no doubt related, at least in part, to the question of how, if at all, Title IX regulations would affect esporting eligibility, participation, and scholarships.(15)  It should be noted that many in the esports community are opposed to NCAA governance, arguing regulations tailored to traditional sporting may curb the growth of collegiate esports, and hinder gamers’ opportunities to win prize money or collect through streaming. (16)

Although the NCAA has opted to sit on the sidelines, on May 22, 2019, LoL publisher Riot Games announced the creation of a governing body to oversee its college and high school esports. (17)  The Riot Scholastic Association of America (“RSAA”), which will only oversee LoL competitions, has a six-member advisory board that includes some university representatives. (18)  

Despite tremendous growth in fan-base and revenue, the regulation of collegiate esports remains nascent.  While schools have started to recognize and thus legitimize esports, there is a patchwork of organization, governance, regulation, and competition across intercollegiate esports.  So, while RSAA’s announcement is a step in the right direction in creating a governance framework, collegiate esports would perhaps benefit from a single body establishing uniform rules.

Legal considerations for collegiate esports: reviewing the “playbook” from professional esports

Esports implicates a constellation of areas of law including sports, entertainment, employment, antitrust, immigration, and intellectual property and trademark.  While the legal framework supporting, and some may argue, hindering, professional esports is still developing in its own right, those involved in (or trying to manage) collegiate esports can take some cues and learn lessons from their professional counterparts.  For example, legal issues have emerged around professionals’ “gamer” contracts.  Leading the charge is professional gamer Turner “Tfue” Tenney who recently sued esports entertainment company Faze Clan Inc., his agent, alleging the company signed him to an exploitive contract that entitles it to 80 percent of any third-party revenue for his streamed videos.  See Tenney v. Faze Clan Inc. et al., No. 19STCV17341, complaint filed, 2019 WL 2195136 (Cal. Super. Ct., L.A. Cty. May 20, 2019) (alleging the “onerous” and “one-sided” gamer agreement limits his competition for sponsors).

Contracting parties should also be mindful of state and federal regulations relating to health insurance, wages, overtime, and non-compete and arbitration provisions.  Other considerations such as gamers unions and collective bargaining rights may be on the horizon.

With industry watchers agreeing that esports athletes will continue to be featured in popular marketing campaigns (even Nike got into the game, featuring professional LoL gamer Jian “Uzi” Zihao alongside LeBron James in its 2018 Chinese “Dribble &” campaign), endorsement and merchandising deals will, and should, be subject to increasing scrutiny.  And gamers are not alone – their inventor/developer and publisher counterparts must address intellectual property, licensing content, and franchising issues.   

Despite the new frontier, we can anticipate that many of the issues under consideration by, and challenges faced in, the professional sector will replicate themselves in the higher education context (particularly if the area remains free of a cohesive governance structure).  Those issues and challenges are set against the backdrop of an even broader question: are collegiate esports properly categorized as a “sport” in the traditional sense or as “extracurricular activities” or “performing arts?”(19)   It remains to be seen how, and whether, esports will be definitively classified at the collegiate level, creating yet another question mark in the legal landscape.  Legal issues cropping up around collegiate esporting may include, to name a few:

  • Title IX implications, including for example, recruitment of student athletes, equal opportunity of participation, consideration of creation of co-ed teams, proportional athletic scholarships, esports course offerings, protection against harassment, and diversity;
  • Cyberbullying policies and disciplinary implications;
  • Funding and budgeting for esports teams and programming;
  • Drug abuse and drug testing collegiate esports gamers.  Reports of misuse of performance enhancing drugs, “doping,” or abuse of prescription medications typically used to treat attention deficit disorder are common; 
  • Integrity in esports, including regulation of gambling and corruption, such as game rigging;
  • Broadcasting rights/streaming agreements;
  • Intellectual property, including licensing issues if student-developed content is “published”; and
  • Contract and tort law, including for example, allegations of putting esports gamers in a false light and tortious interference with contractual relationships.

This is an exciting and dynamic industry to watch (pun intended) and Saul Ewing Arnstein & Lehr will keep you updated as the legal landscape develops.

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(1) Jelle Kooistra, Newzoo’s Trends to Watch in 2019, NEWZOO (January 3, 2019), https://newzoo.com/insights/articles/newzoos-trends-to-watch-in-2019/.
(2) Cynthia Ramsaran, Taylor’s 2019 Esports Trends Report, TAYLOR (February 8, 2019),  https://taylorstrategy.com/2019-esports-trends-report/.
(3) Rebecca Heilweil, Infoporn: College Esports Players Are Cashing in Big, WIRED (Jan. 21, 2019), https://www.wired.com/story/infoporn-college-esports-players-cashing-in-big/.
(4) Jacqueline Martinelli, The Challenges of Implementing a Governing Body for Regulating Esports, 26 U. Miami Int’l & Comp. L. Rev. 499, 504 (Spring 2019).
(5) Id.
(6) The National Association of College Esports, https://nacesports.org/about/; for a list of NACE members and higher education varsity programs see Sean Morrison, List of varsity esports programs spans North America, ESPN, https://www.espn.com/esports/story/_/id/21152905/college-esports-list-varsity-esports-programs-north-america.
(7) See fn. 3 supra
(8) Andrew Hayward, NCAA Votes to Not Govern Collegiate Esports, THE ESPORTS OBSERVER (May 17, 2019), https://esportsobserver.com/ncaa-nogo-collegiate-esports/.  
(9) While NCAA stalls game publisher forms college esports body, AP NEWS (May 22, 2019), https://www.apnews.com/1cd02c47b7004823a8a41f84090465f0.
(10) Tom Schad, NCAA tables possibility of overseeing esports, USA TODAY (May 21, 2019), https://www.usatoday.com/story/sports/college/2019/05/21/ncaa-and-esports-not-just-yet-organization-tables-possibility/3751122002/.
(11) Press Release, ESPN EVENTS (May 12, 2019).
(12) See fn. 8 supra
(13) NCAA’s Emmert Talks Impact of Sports Betting, Concerns on Esports, SBJ DAILY (Jan. 25, 2019), https://www.sportsbusinessdaily.com/Daily/Issues/2019/01/25/Colleges/NCAA.aspx.  It should be noted that other sources dispute the 95% statistic.  See e.g., Tim Reynolds, NCAA’s Emmert expresses concern over wagering, esports, AP NEWS (Jan. 24, 2019), https://www.apnews.com/7d62e621e8dd4c3bb1edfc54363c40c6  (noting other studies “suggest the gap between male and female [esports] players – while still tilted heavily toward men – is much smaller than [95%]”).  
(14) Id.
(15) See fn. 8 supra
(16) See fn. 9 supra
(17) See fn. 8 supra
(18) Id.
(19) For a detailed discussion about this still unresolved question see The Future is Now: Esports Policy Considerations and Potential Litigation, Holden, Kaburakis, Rodenberg, JOURNAL OF LEGAL ASPECTS OF SPORT, 2017, 27, 46-78 (2017). Notably, the United States, along with Russia, Italy, Denmark, Nepal, China, Korea, South Africa, and Finland all recognize esports participants as professional athletes. The International Olympic Committee similarly recognizes video games as competitive “sports.” See fn. 4 supra at 503.