Jul 21, 2022

Addressing Esports Betting Regulation and Compliance with PandaScore

Share Article

Originally published in iGaming Future.

Oliver Niner, Head of Sales at PandaScore, discusses the unique regulatory challenges that esports betting presents and says that by all parties coming together, frameworks that protect both competitors and bettors can be put in place.

Esports betting is now a must-have for sportsbook operators looking to engage wider audiences and provide existing customers with new and exciting wagering opportunities.

But in the haste to add esports to their books, operators must not overlook the need to be compliant not only with gaming regulations in the markets they target but also with esports rules.

This is a complex, ever-changing area as the worlds of esports and betting become more tightly bound together and more comprehensive requirements are brought into play.

It must be remembered that it is still very early days for esports and esports betting, with an education process to take place with regulators in markets around the world.

For now, this means operators wanting to add esports betting will need to get their heads around the different requirements in the different markets they target.

Of course, there are some fairly standard compliance requirements that operators have to meet in the vast majority of markets, and the big one here is player age verification.

To be clear, that is not the age verification of the bettor but the age verification of the competitor taking part in the video game being bet on as participants can be under 18.  This is data Pandascore carefully researches and includes as part of its API integration.  Giving the operator the opportunity to exclude games that the local regulation does not allow.

Of course, different markets have different approaches to betting on games where competitors are under the age of 18.

Spain and Sweden are especially strict in this regard.  Both nations have thresholds of 50% participation, which means that if more than 50% of the players on the teams taking part in the event are underage the game cannot be offered.

And it is not just competitor ages that operators have to consider, it is also the games that are permitted in specific markets.

Take Italy, for example, you are not allowed to bet on games that simulate war.

What’s more, the hugely popular game – both in terms of play and wagering – Counter-Strike: Global Offensive, is not available in Italy because of a restriction on betting on games that depict war that is unique to Italy.

Again, operators must be aware of these market nuances and ensure they are compliant. But this should not deter operators from adding esports betting to their books.

Some of the operators we speak with are cautious due to the complex regulatory environment and what I believe is a fear of the unknown.

In reality, however, esports leaves operators no more exposed to risks (match-fixing, underage play, etc) than traditional sports such as football, tennis and cricket.

This is where an education process needs to take place, not only with operators keen to add esports betting but also the regulators setting the requirements they must meet.

Take Germany, for example. There is no esports betting permitted whatsoever and again I think this is because there is a fear of the unknown.

Most consider esports to be something that younger generations engage with, and this immediately sets off alarm bells when it comes to responsible gambling and underage play.

But it must be remembered that games such as Counter-Strike: Global Offensive have been around for more than 20 years, so there are well-developed games and ecosystems with mature audiences.

Ultimately, if there is demand for esports betting (and there absolutely is) operators are going to want to offer it and regulators are therefore going to have to regulate it.

This will be driven by tier-one brands investing their significant resources into understanding esports and the legal landscape in each market they wish to target.

This in turn will generate discussions at the regulator level which is sure to drive progress.

We are also playing our part in this and work closely with regulators to educate them about the world of esports and esports betting best practice.

If all stakeholders enter the discussion – operators, regulators, suppliers, tournament organisers, publishers, etc – then together we can create frameworks that protect competitors and bettors.

And that is a win-win for everyone.