Part 2: Level up - Government responses to corruption in Esports

Authors: Alexander Field and Marc Bosnic

Part 1 discussed how the esports community is attempting to self-regulate its members to increase integrity. However, the State and Federal governments are also taking notice.

In response to rising corruption, governments have taken action. In 2011, Australia’s Federal and State governments worked together to produce the ‘National Policy on Match-Fixing in Sport’ (the Policy). The Policy sought to create a nationally consistent approach to deterring match fixing, facilitate information-sharing across State borders, and establish Sport Controlling Bodies for each State. One of the functions of these Sport Controlling Bodies is to register all gambling-related events occurring in their State. While the reforms that stemmed from the Policy were not specifically aimed at esports, it appears they have been drafted sufficiently widely to allow for them to be applied to both traditional and emerging sports involving gambling, including esports. These laws are somewhat akin to the blue shell in Mario Kart: able to take on everything in their path.

Indeed, the recent Victorian arrests were effected under s195C of the Crimes Act 1958 (Vic), which was inserted with the 2011 reforms. The provision makes it an offence to knowingly engage in conduct that corrupts or would corrupt an event upon which it is legal to gamble with the intent to obtain a financial advantage (or cause a disadvantage). Infringement of s 195C carries a maximum penalty of 10 years imprisonment. All Australian jurisdictions now have analogous legislation in place.

As much of this legislation appears to have been drafted in a manner that is technologically neutral, we would expect to see further prosecutions in the future as police and law enforcement agencies focus more on the rapidly spreading problem of esports corruption. However, perhaps the greatest issue for enforcement of these provisions is the fact that the amounts at stake in esports gambling are often only relatively small – the Victorian offenders only stood to win about $30,000 had they been successful. Further, as was noted in the recent ‘Report of the Review of Australia’s Sports Integrity Arrangements’ (the Report) match-fixing and corruption are most prevalent at the ‘sub-elite levels’ of sports, where there is less oversight and monitoring.¹ Given the decentralised nature of esports, this lack of oversight and monitoring makes finding match-fixing more difficult than if the event were a major attraction.

A key recommendation of the Report was the establishment of a national sports integrity commission with broad-based powers to tackle corruption, doping, and to facilitate information sharing across government agencies. This proposal was accepted by the Federal Government in early 2019, and a Bill is currently before the Federal Parliament to establish “Sport Integrity Australia”, a body to monitor and act on corruption in sports. Given the uncontroversial nature of the legislation, it appears likely to pass. While this body will not specifically be set up for esports matters, the broadness of the legislation discussed above indicates it may create a remit to investigate corruption in esports.

The Interactive Gambling Act 2001 (Cth) (IGA) provides another potential avenue of regulation of esports. The IGA regulates gambling in a variety of forms, among them electronic gambling. Importantly, the IGA defines a ‘gambling service’ as, among other things, ‘a game of chance or of mixed chance and skill’ played for ‘money or anything else of value’ where consideration is given to enter the game. Electronic games played over the internet may fall within the IGA’s purview. The IGA establishes a complaints procedure, where individuals can lodge concerns they may have with a gambling provider or platform, and allows for the Australian Communications and Media Authority (ACMA) to investigate matters in response to complaints or of its own initiative. Further, if the ACMA is concerned about the content of internet gambling, it can refer the matter to domestic or international police agencies. The IGA has broad application to online gambling and gambling on esports, and poses the potential for esports platforms to face criminal sanctions for failure to comply with obligations arising under the Act. It is likely that, as esports become more prevalent, the IGA will become increasing relevant to the sector.

The introduction of “Sport Integrity Australia”, combined with existing legislation and the increased capacity of gaming companies to self-regulate, will open several new fronts for corruption in esports to be investigated and brought to light. With increased scrutiny, it is likely the laws recently deployed in Victoria (and their interstate counterparts) are likely to become more commonly used in the coming years. Esports participants and punters: beware.

On the other hand, esports companies and IP owners may be well advised to dedicate more resources to self-governance and preventing corruption at the source, before governments and regulators decide the only reasonable step is to apply heavier regulations to their industry. Gaming companies might not have as much fun playing if the level of regulatory difficulty is turned up.

[1] Report of the Review of Australia’s Sports Integrity Arrangements, page 7.