At the height of the COVID-19 pandemic in 2020, the sports betting world was essentially short-circuited as professional and college sports leagues canceled games. With the notable exceptions of Belarusian football and Russian table tennis, actual markets for sporting events were few and far between.
Esports has filled some of that void, with NASCAR drivers compete in a virtual racing league and popular multiplayer games such as League of Legends and Counter Strike: Global Offensive (CS:GO) are introduced to the sports betting community. More than two years later, however, the potential of esports being shown as an additional vertical to the sports betting space has yet to be realized.
There have been a handful of one-time events that have been approved by a handful of state regulators, but no leagues have been sanctioned for betting. The Esports Integrity Commission has been around since 2015 to try to help combat issues including match-fixing and to ensure a level playing field in terms of technology, and the sport held its first global summit in April.
But the final steps – creating a regulatory framework for sports betting and then getting sports betting operators to offer those markets – remain elusive. The Nevada Gaming Control Board is making progress on the first issue, hoping that what it crafts in rules and regulations will help address the second.
The growth of esports has been global, but not local
Speaking on a panel at the Global Gaming Expo in Las Vegas, moderator Seth Schorr, CEO of Fifth Street Gaming and President of the Downtown Grand Hotel and Casino, joked that the title of the session, ” Esports Wagering: Passing Trend or New Vertical,” sounded “so 2019. Another panelist, Dr. Brett Abarbanel, said lightheartedly that she wondered if she had been on that panel — before explaining the current market. .
“We’ve been talking about the size and quality of esports for a very long time and the size and quality of this parallel esports betting space for just as long,” she said, pointing out that Schorr’s bookmaker was the first in Nevada. to accept a bet on an esports event. “I remember talking back in 2015 that esports betting is about five to ten times the esports market, and they continue to be that size. But to take that metric, you really have to look globally, and when we do, we can see incredible progress.
“We see betting being integrated into esports itself. But where we seem to have faltered is in the United States,” Aberbanel continued. “We’ve been slow to take up. Nevada has been the the first to allow esports betting, Seth was the first sports betting operator in the United States to bet on a sporting event, but we haven’t really gotten past that.
Both Aberbanel and Schorr serve on the Esports Technical Advisory Committee, which was created following the passage of SB 165 by the Nevada State Legislature last year. NGCB Board Member Dr. Brittnie Watkins, who completed the G2E panel, chairs the committee. Watkins has extensive esports research experience as part of its overall gaming litigation experience.
“There is an increased focus on betting regulations,” Watkins said in an interview with American bets on what has changed since she resumed an active interest in esports in 2019.”[At the end of] my research in 2017, William Hill had just taken his first esports bet. I think there’s increased legitimacy in the United States with college and high school esports teams. You’re starting to see it flow into education and that’s a sign of its legitimacy.
“I think [the esports committee] will be very helpful for us to get advice from people in the industry who understand esports on how best to protect integrity when betting on esports is involved.
What is the biggest challenge to growing in the vertical?
Aberbanel said regulators face the biggest challenge in bringing esports into the full-time sports betting landscape because “there is an element of ignorance that comes naturally with a new topic, no matter who you are. .… [Esports] is a new case, there are all sorts of new quirks about esports that are unique from other games that have been regulated in the past.
To that end, Watkins and the Esports Technical Advisory Committee have been working on a draft whitelist of leagues and game developers. The problem is that no one has submitted a request to be on this whitelist, and part of that may stem from the expected rigorous due diligence that NGCB will perform after receiving a request.
“I think any company entering the Nevada market strongly considers a strict regulatory environment,” Watkins said. “There was a lot of consensus that a whitelist would be helpful. What we want to do is best practices, whatever will be best to balance betting integrity and industry growth. If a whitelist is what works, then this is what works.
Schorr countered with the belief that sports betting is struggling the most. Not with esports as a sport – he said the industry has moved past that argument – but the question is whether “the gaming industry knows how to leverage esports”. Schorr pointed out that operators have a lot to do with a comprehensive sports program in addition to operating in multiple jurisdictions, and they still need to put themselves in a position to act.
Commitment may be the biggest hurdle for sports betting
Aberbanel, who has worked in esports for more than a decade and is the director of research at UNLV’s International Institute of Gaming, suggested that sports betting with an online presence is more receptive. to esports betting – something that could prove frustrating in the Nevada market since brick-and-mortar betting still makes up such a big part of the handful.
But engaging with the general public who don’t play esports but might want to bet on events might prove to be the most elusive piece of chicken-and-egg arguments of sorts. Aberbanel pointed out that esports doesn’t need traditional media to succeed in the big picture, but when these tournaments are broadcast, the terminology may not be easily understandable to this new audience. She remembered when ESPN2 broadcast a “Heroes of the Dorm” tournament in 2015, there was a sense that people “were interested in it, but not much interest in it being on ESPN”.
Additionally, esports fans are consuming media at a much faster rate thanks to platforms like Twitch, where many tournaments are streamed. Aberbanel noted the high levels of community engagement via chat boxes, which include people “making predictions on Twitch, some betting with each other – which I’m sure the Gaming Control Board might be interested in – and cashing in through Discord”.
And without that traditional interest, operators might have less incentive to pursue esports as an additional vertical. Watkins pointed out that 2020 remains the peak of requests for esports events for betting, and that the NGCB received none in the past year.
“The short answer is that there’s not a lot of interest among operators,” Watkins said. “I hear among the operators, but in terms of esports betting acceptance requests, there haven’t been many. Although it might come as a surprise to people because esports is a big deal everywhere else, here in Nevada, we haven’t received an application and we haven’t received an application for our whitelist.