Regulating Esports: Bridging the Gap Between Traditional and Digital Sports
Introduction
The development of high-speed broadband internet in the 90s triggered a growth in online gaming, particularly in East Asian countries like South Korea and China. This culminated in the proliferation of competitive video game genres, which had otherwise existed mostly in the form of high-score and face-to-face competitions at arcades. The online competitive gaming market has only become bigger over the years, with a separate domain for professional competition, called esports. This industry is projected to reach US$4.3 billion by 2029, driven by advancements in gaming technology, increased viewership, multi-million dollar tournaments, professional leagues, sponsorships, and advertising revenues. However, the industry is still in its infancy and struggles with fairness and integrity issues. It can draw lessons in regulation from the traditional sports market to address these challenges for uniform global growth.
The Growth of Esports
The appeal of online gaming lies in its design innovations, social connectivity, and accessibility. Its rising popularity has culminated in online gaming competitions becoming an industry, formally organised into leagues and tournaments with reward prizes reaching up to millions of dollars. Professional teams now have coaches, analysts and psychologists supporting their players. For scale, the 2024 ESports World Cup (EWS) held in Saudi Arabia had the largest combined prize pool of over US$60 million. Such tournaments can be viewed in arenas and streamed online, and by 2025, around 322.7 million people are forecast to be occasional viewers of esports events.
According to Statista, esports revenue is expected to demonstrate an annual growth rate (CAGR 2024-2029) of 6.59%, resulting in a projected market volume of US$5.9 billion by 2029. Esports has even been recognised in traditional sporting events, debuting as a medal sport in the Asian Games 2022. In 2024, the International Olympic Committee (IOC) announced the Olympic Esports Games, with the inaugural event set to take place in 2025 in Saudi Arabia. Hosting esports events such as the EWS is expected to boost tourism and the host country’s local economy.
The Challenges of Esports Regulation
While the esports ecosystem provides numerous opportunities for growth and partnerships, its under-regulation presents challenges. Due to the lack of a single governing body like the IOC for the Olympics or FIFA for football to lay down centralised rules, the industry faces certain challenges, such as :
- Integrity issues: Esports are not immune to cheating attempts. Match-fixing, using advanced software hacks, doping (e.g., Adderall use), and the use of other illegal aids are common. DOTA, Counter-Strike, and Overwatch tournaments are particularly susceptible to cheating scandals.
- Players’ Rights: The teams that contractually own professional players provide remuneration and exercise significant control over athletes, who face issues like overwork, a short-lived career, stress, the absence of collective bargaining forums, instability, etc.
- Fragmented National Regulations: While multiple countries have recognised esports as a sport, policies on esports governance and allied regulation vary within and across borders. For example, age restrictions and laws on gambling, taxation, labour, and advertising differ by country. This can create confusion, risks and extra costs, impacting the growth of the ecosystem.
- Cybersecurity Concerns: The esports industry carries substantial prize pools and has growing viewer engagement, which makes it increasingly vulnerable to Distributed Denial of Service (DDoS) attacks, malware, ransomware, data breaches, phishing, and account hijacking. Tournament organisers must prioritise investments in secure network infrastructure, perform regular security audits, encrypt sensitive data, implement network monitoring, utilise API penetration testing tools, deploy intrusion detection systems, and establish comprehensive incident response and mitigation plans.
Proposals for Esports Regulation: Lessons from Traditional Sports
To address the most urgent challenges to the esports industry as outlined above, the following interventions, drawing on the governance and regulatory frameworks of traditional sports, can be made:
- Need for a Centralised Esports Governing Body: Unlike traditional sports, the esports landscape lacks a Global Sports Organisation (GSO) to oversee its governance. Instead, it is handled de facto by game publishers with industry interests different from those of traditional GSOs. Publishers’ primary source of revenue is not esports, which means they can adopt policies unsuitable for its growth but good for their core business. Appointing a centralised governing body with the power to balance the interests of multiple stakeholders and manage issues like unregulated gambling, athlete health, and integrity challenges is a logical next step for this industry.
- Gambling/Betting Regulations: While national laws on gambling/betting vary, GSOs establish uniform codes of conduct that bind participants contractually, ensuring consistent ethical standards across jurisdictions. Similar rules in esports are managed by individual publishers/ tournament organisers, leading to inconsistencies and legal grey areas. The esports ecosystem needs standardised regulation to preserve fair play codes and competitive integrity.
- Anti-Doping Policies: There is increasing adderall abuse among young players to enhance performance with the rising monetary stakes in esports. The industry must establish a global framework similar to the World Anti-Doping Code, which, in conjunction with eight international standards, harmonises anti-doping policies across all traditional sports and countries in the world. The esports industry should either adopt this or develop its own policy to curb stimulant abuse.
- Norms for Participant Health: Professional players start around age 16 or 17 and tend to retire around 24. They may be subjected to rigorous practice hours and stringent contracts by the teams that own them. There is a need for international norm-setting by a federation overseeing the protection of underage players. Enforcement of these norms can be one of the responsibilities of a decentralised system comprising country and state-level bodies. This also ensures fair play governance.
- Respect and Diversity: While esports is technologically accessible, it still has room for better representation of diverse gender identities, age groups, abilities, races, ethnicities, religions, and sexual orientations. Embracing greater diversity and inclusivity would benefit the industry's growth and enhance its potential to foster social connectivity through healthy competition.
Conclusion
The development of the world’s first esports island in Abu Dhabi gives impetus to the rapidly growing esports industry with millions of fans across the globe. To sustain this momentum, stakeholders must collaborate to build a strong governance framework that protects players, supports fans, and strengthens the ecosystem. By learning from traditional sports, esports can establish centralised governance, enforce standardised anti-doping measures, safeguard athlete rights, and promote inclusivity, especially for young and diverse communities. Embracing regulation and inclusivity will not only enhance esports' credibility but also position it as a powerful platform for unity, creativity, and social connection in the digital age.
Resources
- https://www.statista.com/outlook/amo/esports/worldwide
- https://www.statista.com/statistics/490480/global-esports-audience-size-viewer-type/
- https://asoworld.com/blog/global-esports-market-report-2024/#:~:text=A%20key%20driver%20of%20this%20growth%20is%20the%20Sponsorship%20%26%20Advertising,US%24288.9%20million%20in%202024.
- https://lawschoolpolicyreview.com/2023/12/28/a-case-for-recognising-professional-esports-players-as-employees-of-their-game-publisher/
- https://levelblue.com/blogs/security-essentials/the-hidden-risks-of-esports-cybersecurity-on-the-virtual-battlefield
- https://medium.com/@heyimJoost/esports-governance-and-its-failures-9ac7b3ec37ea
- https://www.google.com/search?q=adderall+abuse+in+esports&oq=adderall+abuse+in+esports&gs_lcrp=EgZjaHJvbWUyBggAEEUYOTIHCAEQIRiPAjIHCAIQIRiPAtIBCDU2MDdqMGo5qAIAsAIB&sourceid=chrome&ie=UTF-8
- https://americanaddictioncenters.org/blog/esports-adderall-abuse#:~:text=A%202020%20piece%20by%20the,it%20because%20everyone%20was%20using
Related Blogs
Introduction
Cyber attacks are becoming increasingly common and most sophisticated around the world. India's Telecom operator BSNL has allegedly suffered a data breach. Reportedly, Hackers managed to steal sensitive information of BSNL customers and the same is now available for sale on the dark web. The leaked information includes names email addresses billing details contact numbers and outgoing call records of BSNL customers victims include both BSNL fibre and landline users. The threat actor using Querel has released a sample data set on a dark web forum and the data set contains 32,000 lines of leaked information the threat actor has claimed that the total number of lines across all databases amounts to approximately 2.9 Million.
The Persistent Threat to Digital Fortresses
As we plunge into the abyssal planes of the internet, where the shadowy tendrils of cyberspace stretch out like the countless arms of some digital leviathan, we find ourselves facing a stark and chilling revelation. At its murky depths lurks the dark web, a term that brings forth images of a clandestine digital netherworld where anonymity reigns supreme and the conventional rules of law struggle to cast their net. It is here, in this murky digital landscape, where the latest trophy of cyber larceny has been flagrantly displayed — the plundered data of Bharat Sanchar Nigam Ltd (BSNL), India's state-owned telecommunications colossus.
This latest breach serves not simply as a singular incident in the tapestry of cyber incursions but as a profound reminder of the enduring fragility of our digital bastions against the onslaught wielded by the ever-belligerent adversaries in cyberspace.
The Breach
Tracing the genesis of this worrisome event, we find a disconcerting story unfold. It began to surface when a threat actor, shrouded in the mystique of the digital shadows and brandishing the enigmatic alias 'Perell,' announced their triumph on the dark web. This self-styled cyber gladiator took to the encrypted recesses of this hidden domain with bravado, professing to have extracted 'critical information' from the inner sanctum of BSNL's voluminous databases. It is from these very vaults that the most sensitive details of the company's fibre network and landline customers originate.
A portion of the looted data, a mere fragment of a more extensive and damning corpus, was brandished like a nefariously obtained banner for all to see on the dark web. It was an ostentatious display, a teaser intended to tantalize and terrify — approximately 32,000 lines of data, a hint of the reportedly vast 2.9 million lines of data that 'Perell' claimed to have sequestered in their digital domain. The significance of this compromised information cannot be overstated; it is not mere bytes and bits strewn about in the cyber-wind. It constitutes the very essence of countless individuals, an amalgamation of email addresses, billing histories, contact numbers, and a myriad of other intimate details that, if weaponized, could set the stage for heinous acts of identity theft, insidious financial fraud, and precisely sculpted phishing schemes.
Ramifications
The ramifications of such a breach extend far beyond individual concerns of privacy invasion. This event signifies an alarming clarion call highlighting the susceptibility of our digital identities. In an era where the strands of our daily lives are ever more entwined with the World Wide Web, such penetrations are not merely an affront to corporate entities; they are a direct assault on the individual's inherent right to security and the implicit trust placed in the institutions that profess to shield their most private information.
Ripples of concern have emanated throughout the cybersecurity community, prompting urgent action from Cert-In, India's cyber security sentinel. Upon notification of this digital transgression, alarms were sounded, and yet, in a disconcerting turn, BSNL has remained enigmatic, adopting a silence that seems to belie the gravity of the situation. This reticence stands in contrast to the urgency for open dialogue and transparency — it is within the anvil of these principles that the foundations of trust are laid and sustained.
Conclusion
The narrative of the BSNL data breach transcends a singular tale of digital larceny or vulnerability; it unfolds as an insistent call to action, demanding a unified and proactive response to the perpetually morphing threat landscape that haunts our technologically dependent world. It is an uncomfortable reminder that in the intricately woven web of our online existence, we each stand as potential targets with our personal data held precariously as the coveted prize for those shadow-walkers and data marauders who dwell in the secretive realms of the internet's darkest corners.
References
Introduction
The world has been riding the wave of technological advancements, and the fruits it has born have impacted our lives. Technology, by its virtue, cannot be quantified as safe or unsafe it is the application and use of technology which creates the threats. Its times like this, the importance and significance of policy framework are seen in cyberspace. Any technology can be governed by means of policies and laws only. In this blog, we explore the issues raised by the EU for the tech giants and why the Indian Govt is looking into probing Whatsapp.
EU on Big Techs
Eu has always been seen to be a strong policy maker for cyberspace, and the same can be seen from the scope, extent and compliance of GDPR. This data protection bill is the holy grail for worldwide data protection bills. Apart from the GDPR, the EU has always maintained strong compliance demographics for the big tech as most of them have originated outside of Europe, and the rights of EU citizens come into priority above anything else.
New Draft Notification
According to the draft of the new notification, Amazon, Google, Microsoft and other non-European Union cloud service providers looking to secure an EU cybersecurity label to handle sensitive data can only do so via a joint venture with an EU-based company. The document adds that the cloud service must be operated and maintained from the EU, all customer data must be stored and processed in the EU, and EU laws take precedence over non-EU laws regarding the cloud service provider. Certified cloud services are operated only by companies based in the EU, with no entity from outside the EU having effective control over the CSP (cloud service provider) to mitigate the risk of non-EU interfering powers undermining EU regulations, norms and values.
This move from the EU is still in the draft phase however, it is expected to come into action soon as issues related to data breaches of EU citizens have been reported on numerous occasions. The document said the tougher rules would apply to personal and non-personal data of particular sensitivity where a breach may have a negative impact on public order, public safety, human life or health, or the protection of intellectual property.
How will it secure the netizens?
Since the EU has been the leading policy maker in cyberspace, it is often seen that the rules and policies of the EU are often replicated around the world. Hence this move comes at a critical time as the EU is looking towards safeguarding the EU netizens and the Cyber security industry in the EU by allowing them to collaborate with big tech while maintaining compliance. Cloud services can be protected by this mechanism, thus ensuring fewer instances of data breaches, thus contributing to a dip in cyber crimes and attacks.
The Indian Govt on WhatsApp
The Indian Govt has decided to probe Whatsapp and its privacy settings. One of the Indian Whatsapp users tweeted a screenshot of WhatsApp accessing the phone’s mic even when the phone was not in use, and the app was not open even in the background. The meta-owned Social messaging platform enjoys nearly 487 million users in India, making it their biggest market. The 2018 judgement on Whatsapp and its privacy issues was a landmark judgement, but the platform is in violation of the same.
The MoS, Ministry of Electronics and Information Technology, Rajeev Chandrashekhar, has already tweeted that the issue will be looked into and that they will be punished if the platform is seen violating the guidelines. The Digital Personal Data Protection Bill is yet to be tabled at the parliament. Still, despite the draft bill being public, big platforms must maintain the code of conduct to maintain compliance when the bill turns into an Act.
Threats for Indian Users
The Indian Whatsapp user contributes to the biggest user base un the world, and still, they are vulnerable to attacks on WhatsApp and now WhatsApp itself. The netizens are under the following potential threats –
- Data breaches
- Identity theft
- Phishing scams
- Unconsented data utilisation
- Violation of Right to Privacy
- Unauthorised flow of data outside India
- Selling of data to a third party without consent
The Indian netizen needs to stay vary of such issues and many more by practising basic cyber safety and security protocols and keeping a check on the permissions granted to apps, to keep track of one’s digital footprint.
Conclusion
Whether it’s the EU or Indian Government, it is pertinent to understand that the world powers are all working towards creating a safe and secured cyberspace for its netizens. The move made by the EU will act as a catalyst for change at a global level, as once the EU enforces the policy, the world will soon replicate it to safeguard their cyber interests, assets and netizens. The proactive stance of the Indian Government is a crucial sign that the things will not remain the same in the Indian Cyber ecosystem, and its upon the platforms and companies to ensure compliance, even in the absence of a strong legislation for cyberspace. The government is taking all steps to safeguard the Indian netizen, as the same lies in the souls and spirit of the new Digital India Bill, which will govern cyberspace in the near future. Still, till then, in order to maintain the synergy and equilibrium, it is pertinent for the platforms to be in compliance with the laws of natural justice.
Introduction
Significantly, in March 2023, the Prevention of Money Laundering Act, 2002's regulations placed Virtual Digital Asset Service Providers functioning located under the purview of the Anti Money Laundering/Counter Financing of Terrorism (AML-CFT) scheme. An important step toward controlling VDA SP operations and guaranteeing adherence to Anti-Money Laundering and Combating the Financing of Terrorism (AML-CFT) regulations.
The significance of AML-CFT procedures
The AML-CFT framework's incorporation of Virtual Digital Asset Service Providers (VDA SPs) is essential for protecting the banking industry from illegal activities including the laundering of funds and counter-financing of terrorist attacks. These regulations become more crucial as the market for digital assets develops and becomes more well-known.
The practice of money laundering is hiding the source of the sum received illegally, thus it's critical to have strict policies in place to track down and stop these kinds of operations. Furthermore, funding for terrorism is a serious danger to international safety, hence stopping the flow of money to terrorist companies is a top concern for global officials.
The goal of policymakers' move to include VDA SPs in the AML-CFT architecture is to set up control and surveillance procedures that will guarantee these organisations' open and honest operations. This involves tracking transactions, flagging questionable activity, and conducting extensive customer investigations. Incorporating such procedures not only reduces the potential for financial crimes but also builds confidence and trust in the electronic asset market.
It is important to see the significance of AML-CFT procedures and the changes in the legal framework to reflect the evolving characteristics of digital currencies. These procedures are essential to preserving the reliability and safety of the wider banking system.
Notifications of Compliance Show Cause
Under Section 13 of the PMLA Act 2002, FIU IND sent adherence Show Cause Notices to nine offshore Virtual Digital Asset Service Providers (VDA SPs) as part of its dedication to upholding compliance with regulations. This affirmative step requires organisations to be scrutinised and attempted to bring them under inspection.
Governmental Response
The Director of FIU IND has addressed the Secretary of the Ministry of Electronics and Information Technology to take further measures due to the disregard of offshore firms. According to the notification, URLs connected to these organisations that operate in India in violation of the PML Act's requirements must be blocked.
Mandatory Registration for VDA SPs
Virtual Digital Asset Service Providers (both onshore and offshore) who perform a range of operations, including the trading of digital goods for monetary currencies, the distribution of digital currency, and the management or preservation of electronic assets, are now obliged to register with FIU.
Range of Statutory Responsibilities
In accordance with the PML Act, VDA SPs are subject to several requirements, including documentation, disclosure, and other duties. One of their responsibilities is to register with the FIU IND. The primary focus is on guaranteeing that VDA SPs comply with AML-CFT protocols, hence enhancing the general reliability of the banking industry.
Difficulties with Offshore Compliance
There are many obstacles in guaranteeing that offshore organisations comply with Anti Money Laundering/Counter Financing of Terrorism (AML-CFT), chief amongst them being their unwillingness to undergo registration. Some overseas Virtual Digital Asset Service Providers (VDA SPs) have been reluctant to comply with the existing rules and regulations, even though they cater to a significant number of Indian users. There are several reasons for this hesitation, such as worries about heightened monitoring, the expense of compliance, and the apparent complexity of governmental processes. Regulatory organisations have taken steps to close the discrepancy between offshore businesses' real activities and the regulations they must follow. In addition to maintaining the trustworthiness of the economic system, resolving the issues with offshore adherence is essential for promoting confidence and openness in the market for electronic assets.
Conclusion
FIU IND has demonstrated its dedication to creating an effective regulatory framework for Virtual Digital Asset Service Providers through its recent measures. India hopes to fortify its countermeasures against money laundering and safeguard the financial well-being of its users by expanding the AML-CFT legislation to offshore firms. The continuous efforts to restrict the URLs of non-compliant companies show a proactive approach to stopping illicit activity and fostering a safe and law-abiding virtual asset ecosystem. The safety and soundness of the banking sector will be crucially maintained by laws and regulations as the digital world develops.
References
- https://pib.gov.in/PressReleasePage.aspx?PRID=1991372
- https://www.thehindubusinessline.com/books/reviews/business-economy/fiu-ind-issues-compliance-showcause-notices-to-nine-offshore-vda-sps/article67684613.ece
- https://business.outlookindia.com/news/fiu-issues-notice-to-9-offshore-crypto-platforms-writes-to-meity-for-blocking-of-urls
