Betting On Esports Seems To Interest The Public — But Not Lawmakers

If you were a sporting sort, now might seem like the time to place a wager on the broader acceptance of betting on esports, or organized multiplayer video games.

While esports are wildly popular and gaining even greater acceptance, it is not so with esports wagering. At least not yet — and likely not in the next few months. Maybe not this year, either, with politicians focused on the existential threat posed by the coronavirus and not on the lost revenue that has resulted from that threat.

The growing interest in esports

Interest in esports is way up, but not in statehouses, which is a puzzle.

The popularity and the viewership for esports are at a record high across delivery platforms such as Twitch, with individual participants topping 2 billion. Those hordes of gamers are watching consecutively for more than five hours at a stretch, MarketWatch reported just this week.

That’s the sort of audience engagement that marketers only dream about.

Few jurisdictions allow sports betting. But here’s the rub: Most esports currently do not include sanctioned wagering.

Esports’ massive and growing numbers of fans and players make sense for a world constantly craving entertainment and a sports void created by COVID-19. After all, precautions against the pandemic have benched nearly every sporting event dependent on physical competition.

And without most traditional sports, there is almost no sports betting — plus, no sports revenue and no tax revenue from betting. That’s significant.

Between June 2018 and late March 2020, aggregate sports revenue topped $20.5 billion and state tax revenue was more than $180.8 million. Those are some big holes to fill.

Nevada just approved esports wagering

Only two states, Nevada and New Jersey, have clearly prioritized esports wagering in 2020, though that does not entirely translate quickly.

Just last month, Nevada agreed to let sportsbooks to take wagers on Counter-Strike ESL Pro League. In both Nevada and New Jersey, NASCAR iRacing is approved, but no other esports.

Because of the virus, the regular season will take place entirely online to avoid international travel. The finals will take place in a studio in Europe but without spectators.

Esports events routinely are held before live audiences and staged at arenas. Matches began on March 16 and they run through April 9. This year’s season includes 24 teams, divided into four groups.

There are numerous possible wagers in esports, but Nevada began by allowing just three:

• Head-to-head
• Winner of each match
• Overall season winner

What might come next in the Silver State is unclear.

New Jersey is working on approving esports

New Jersey did a brief test run on esports wagering last November. Several esports tourneys (without wagering) also took place in Atlantic City.

A state assemblyman moved a bill through committee in early March, but there’s been no forward motion since, legislatively. A regulatory framework must also get approved.

Anthony Gaud, president and co-founder of the Jersey-based G3 Gaming Group, is confident that full approval of wagering on esports will come, but he is not sure when.

Gaud testified on behalf of the passage of the enabling legislation.

David Rebuck, New Jersey’s director of the Division of Gaming Enforcement, endorsed the bill during the committee meeting.

“New Jersey is the most aggressive state” in the country intent on approving esports gambling, said Gaud. He mentioned benefits such as attracting STEM students, IT and software professionals and building hotel room nights around tournaments.

“It is something happening overtime, seeing what works and what didn’t work” in other locations, added Gaud.

Esports has sticking points

One ongoing issue, in his view, is gambling executives in Atlantic City have been slow to incorporate mobile devices into their businesses.

Other sticking points that Gaud agreed with are:

• An age gap. The esports industry is unfamiliar to older lawmakers and regulators.
• There is no one universal definition of what is or isn’t esports.
• Esports gamers do not fit the familiar demographics of casino gamblers, nor even mobile phone-leaning sportsbook fans.
• Policing esports is a challenge and fixing of matches is a real concern.

Esports progress for Washington tribal casinos

Washington state tribal casinos approved to offer esports as part of a sports betting bill. Still, each tribe will negotiate individually with the state for precisely what is provided, according to Geek Wire.

But the news site also reported that esports is unlikely to be included initially. And even once approved, esports wagers would only be allowed at retail locations, not via mobile or internet.

Many murky situations

• Indiana, which offers legal sports betting, has flatly banned esports. The situation in other states with sports betting is murky.
• Colorado is set to add sports betting on May 1, except, of course, there are virtually no sports to bet on due to the pandemic. The Denver Post reported in mid-March that the app PointsBet is working to have esports available, but details are scant.
• West Virginia has proposed esports legislation, which has not been enacted.
• Rhode Island is hung up by a legal challenge to its sports betting law, according to Legal Sports Report.
• Pennsylvania and additional jurisdictions have murky laws, Play Pennsylvania recently reported. Most neither allow nor expressly ban wagering on esports, so it doesn’t look like PA is moving toward approval.

With a robust sports betting market even online, you might think a jurisdiction with revenue shrunk by the virus might be the candidate to go next.

You’d be wrong.

PA Sen. Tom Killion said, “While the COVID-19 emergency is an unprecedented public health and economic emergency and esports wagering is a potential new revenue stream, I’m not aware of any discussion regarding esports wagering. … ”

Killion, a Republican, leads the committee that oversees most gambling legislation in PA.

His Democrat counterpart, Sen. Lindsey Willams, also said esports is not a legislative priority now, as did Jim Marshall, chair of the gaming committee in the legislature’s lower house.