Originally published in iGaming Future.

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Right now we are witnessing the birth of a new entertainment industry, esports. It merges the competitive and athletic element of traditional sports with high-quality scripting, storytelling and broadcast value. It’s no wonder, then, that fans want to bet on this action.

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This can be seen in the numbers. Today, esports betting is around 1 per cent of the size of traditional sports betting, but just a couple of years ago it was around 0.1 per cent. This shows how quickly the sector is growing in scope and scale with huge untapped potential still on the table.

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Sports betting and esports betting work in the exact same way, and there are similar parallels in how punters bet on the action. The size of bets placed is similar in both spheres and live betting is king-matching or eclipsing pre-match bets in the markets where it is permitted.

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But there are some differences, and the greatest difference is the one that regulators are struggling to overcome as they seek to apply standards to operators and suppliers wanting to offer markets and odds on esports contests from around the world.

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This difference is latency. In traditional sports, fans are at a stadium and they get to see the action live. For those watching on television, there is a slight broadcast delay of perhaps a second or two. With esports, there is a delay for those watching live and those watching at home.

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More significantly, the delay is much longer – upwards of three minutes. For punters, this creates a very different betting experience and one that stacks the odds very much in favour of the bookmaker. For many, it is enough to deter them from betting at all.

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As a fan wanting to bet on esports by watching a stream, you will consistently be beaten by the bookie using a faster data feed. Due to the latency, the bookmaker has all of the information several minutes before the player and can adjust their odds accordingly.

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So why does this latency exist in the first place?

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It is due to the nature of esports contests. Most teams cannot see everything on a map and information can also be hidden through what is known as “fog of war”. This absence of knowledge is a key ingredient to what makes the games exciting.

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For comparison, in a football match, players can see the entire pitch and the goalkeeper can tell his defender to adjust when he sees the opposing left-back make a run down the wing. This is of course part of the strategy and planning that comes with football.

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In esports, however, if there was a zero-latency environment with no delay, teams could “stream snipe” by having someone watch the stream and feed information about the enemy team’s position to the people currently playing.

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It would be like having a live feed of your opposing teams’ coach talking strategy during a football match half-time or a basketball timeout.

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This hurdle can be cleared, and I think it is an example of how regulators can improve the betting experience for esports fans. Right now, the current business model for many is to rely on the latency, but this is creating an unfair betting environment.

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The best way of achieving this would be to distribute the data five second faster than the public video feeds rather than three minutes or more. This would protect the integrity of the game, while also providing a fair opportunity for punters to place bets.

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It’s worth noting that regulators are already doing an incredible job when it comes to esports betting and are working hard every day to help drive the sector forwards. This is incredibly valuable and much appreciated by all industry stakeholders.

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There is always more that can be done, and I think the best way of doing this is by continuing to build close relationships between operators, suppliers, regulators and industry bodies such as the Esports Integrity Commission.

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These relationships will ensure that esports is free of match-fixing and that fans can bet fairly on the action they love watching. Most importantly, it will mean the same levels of responsible gambling and safe gaming are applied to this high growth, huge potential sector.