On a regular basis, we would like to highlight other perspectives on our blog in addition to our own view of the topics and let external parties have their say. Today we are publishing a guest article by Niklas Timmermann, Managing Director of the eSports consulting agency Skillshot Consulting GmbH:

Electronic sports, or competitive gaming, has been growing socially, economically and in terms of clubs for years with a high degree of consistency. E-sports now has a global market volume of more than one billion US dollars. Accordingly, the number of market participants, the interactions in the ecosystem, and the opportunities to be active in the e-sports market are increasing.

Not least due to the novelty of the e-sports market and some of its mechanisms, there is hardly any regulation. What has long been common practice in markets such as traditional sports or the entertainment industry hardly takes place in e-sports. For example, there are no generally recognized regulatory mechanisms through associations or higher-level ethics committees.

What does exist in e-sports are tentative attempts at structural alignment with traditional sports. For example, work is underway to implement a three-tier association system consisting of a national association and state and local associations. In fact, however, there is only one partially recognized federal association and two state associations. For regulation purposes, therefore, an increase in the structural conditions in e-sports would not only be desirable, but necessary.

In addition, there is a special feature in the e-sports market. The rights to computer and video games belong to the game manufacturers, called publishers. Accordingly, these have a comprehensive position of power within the market. If publishers prohibit the use of their games for certain purposes or agree to exclusive contracts, for example, this can lead to significant power shifts within the entire economic system of e-sports.

One demand to the federal government must therefore be that there should be greater regulation of the e-sports market, especially in order to provide stakeholders with a certain degree of legal certainty. On the one hand, this applies to aspects such as the legal situation around publishers described above, but also to e-sports betting and player transfers.

The signal that e-sports will be granted non-profit status in accordance with the current coalition agreement between the SPD, the Greens and the FDP is a positive one. This is an important step towards embedding the work of volunteer e-sports clubs in legal certainty. Furthermore, e-sports clubs will receive tax advantages and access to a wide range of funding opportunities. This is a good and important step, but all in all it is just a drop in the bucket, since the e-sports market as a whole is very uncontrolled.