Turkey’s booming eSports market

Introduction

This article was written by Olgu Kama and Ece Sürmen, lawyers at İnal Kama Attorney Partnership, affiliate firm of Norton Rose Fulbright in Turkey.

While people argue whether eSports, i.e., competitive and organized video gaming¹ , is actually a sport, the industry is expected to grow by more than US$1bn in revenue this year, which is a 26.4 percent boost from 2018². It is predicted that the industry will keep growing. To give an example, the 2018 finale of the League of Legends (LOL) World Championship, which has approximately 100m monthly players³, was viewed by more than 200m people⁴  and the total number of hours of LOL views on streaming sites is over onebn⁵. In the first quarter of 2019, the amount of prizes won at eSports competitions totalled nearly US$32.8m⁶.

The approach to eSports and online gaming is no different in Turkey. Turkey has the youngest population compared to countries in the European Union⁷ and half of the population is under 32. These figures, as well as statistics regarding the rise of eSports in Turkey, make the country very enticing for eSports investments.

Facts about eSports in Turkey

• Turkey is the 18th country in the games market globally in terms of revenue⁸.
• The total income from digital games is approximately US$853m in 2018⁹.
• The first eSports team was Dark Passage, established in 2003, for Counter Strike¹⁰.
• There are more than 14,000 unprofessional eSports teams¹¹.
• The Ministry of Youth and Sports provides licenses to eSports professionals. There are currently 1,014 licenced eSports professionals.
• In 2016, the Turkish Counter Strike Global Offensive team won the world champion title¹².
• In 2018, the Turkish ESports Federation was established within the body of Youth and Sport Ministry¹³.
• Riot Games, an American video game developer and also an eSports event organizer, has opened Riot Games ESports Arena in Ataşehir, Istanbul¹⁴. Nonstop Zula ESports Centre¹⁵ and 42 Maslak Ininal ESports Arena are the additional eSports venues that are opened in Istanbul recently.¹⁶
• Vodafone sponsors the LOL Championship League in Turkey. Vodafone anticipates that it will invest in TRL 30m (approximately US$5,208,000) in eSports in the next five years¹⁷.
• Beşiktas ESports, a Turkish team associated with the football club Beşiktaş, is the first professional eSports team established by a professional sports club worldwide¹⁸ and all three of the biggest sports clubs in Turkey, Fenerbahçe¹⁹, Galatasaray²⁰  and Beşiktaş have eSports teams.
• In the first quarter of 2019, a total of 60 Turkish players won approximately US$107,000 at eSports competitions around the world²¹.

Legal issues

Even though the sector is growing, the legal framework of eSports in Turkey is still developing. Countries like France and South Korea have laws that cover eSports. While Turkey does not have any specific laws regarding eSports, other than (i) Turkey eSports Federation Referee Instruction implemented to define the work, authority and obligations of the referees at eSports tournaments, (ii) Turkey eSports Federation License, Registration and Transfer of Sportsperson Instruction, implemented to define the procedures and principles regarding obligations of sportspersons who participate to tournaments and will obtain a license, and (iii) Turkey eSports Federation Special eSports Arenas and Proficiency Certificate implemented to define rules for eSports arenas and houses, there are applicable references in the general rules of law.

Intellectual property and broadcasting rights

Intellectual property issues in eSports have different aspects than the ones in traditional sports. Turkish Intellectual Property (IP) law defines “work” as products that can be counted as scientific and literary, musical, fine arts or cinematographic work with the individuality of its creator. There are no specific clauses that define digital games as “work”. However, the software is categorized as “work” under computer programs and the overall product is categorized under cinematographic “work.”

A digital game consists of many components such as images, music, animations, motions, underlying code etc. In this context, game creators should act diligently to make sure that they do not violate IP rights of others, such as image rights, copyrights, and trademarks.

Game developers own the intellectual property rights of the games. These ownerships provide the creators with certain exclusive financial and moral rights such as the right to publicize, right to be named, right to deny any changes to the game, right to process, right to produce, right to publish, right to represent and right to publicize through signs; audio and/or video. Such exclusive rights also affect broadcasting since broadcasters do not have the right to publicize the event without authorization. There are also questions about the status of the eSports tournament itself, i.e., whether the streamed tournament itself can be deemed as a derivative work under the law and what conditions must be met to consider the streamed tournament as derivative.

Contracts

Contracts constitute an important place in eSports. There are several contracts that have to be enacted; e.g. (i) the eSports team has to have an agreement with the game developer and also with brands, (ii) the player has to have an agreement with the team and also with the sponsors. It is recommended for every stakeholder to work with an independent lawyer while negotiating and enacting these agreements.

In Turkey, contracts with athletes are subject to the terms of the standard agreements issued by the relevant federations. In cases when the standard agreement issued by the relevant federation does not govern a certain issue, then the Turkish Code of Obligations numbered 6098 (“Code of Obligations”) shall apply. The Code of Obligations provides certain rights in favour of the athletes, such as, an agreement term, remuneration right, right to paid leave etc. The players are generally very young, around the ages of 15-16 when they start their careers and they sometimes retire around the age of 25. At such a young age, players may not realize the seriousness and power of the legal provisions²². The lack of legal knowledge and anticipation of becoming a professional player can lead to significant consequences for a young eSports professional. France, which is the third largest eSports market in the EU, enacted the Numeric Law regulating eSports contracts and eSports competitions. With the Numeric Law, France sought to protect the young professionals from these possible outcomes.

Doping, eDoping and match fixing

Doping, defined as “the use of artificial enhancements and methods to gain an advantage over others in competition, is cheating and is fundamentally contrary to the spirit of sport,”²³ has always been a significant problem in traditional sports and is an issue for eSports as well. In eSports, there is another method of doping, which is sometimes referenced as eDoping. Advantages gained by external factors such as software, malwares and drugs count as doping and eDoping tools²⁴. For example, software can be integrated into the system to enhance performance. Additionally, hardware based doping, such as cheat injectors or hardware triggerbots, can create unfair competition. Organizers try to prevent the use of such enhancements by providing computers and hardware to the players at the arena.

In addition to doping through software and hardware, players may use performance enhancing drugs to get ahead. Turkey applies World Anti-Doping Agency’s (WADA) Rules and prohibits the use of substances mentioned in the prohibited list. WADA prohibits the use of stimulants such as amphetamine and according to Instruction on Fight with Doping in Turkey, all licensed athletes in Turkey shall abide by WADA prohibitions. It bears great significance to have adequate laws or regulations that define what doping is in eSports to ensure a sportsmanlike atmosphere²⁵.

Besides doping, match fixing²⁶ is another threat to integrity in eSports, where the team or some of the players are bribed by third parties. Match fixing is a crucial concern as it may affect the popularity of the games among the viewers and the sponsors while the sector is still growing²⁷.

Violence in sports

According to the Law on Prevention of Violence and Disorder in Sports, supporters are prohibited from insulting players or other supporters. It is also prohibited to act or speak offensively about religion, language, ethnicity, sex or sects in and around sports arenas. There are criminal and administrative liabilities for the above mentioned actions, such as banning. In traditional sports, violence happens in real life and the perpetrators are usually at the arena. It is problematic to pin the scope in eSports as eSports are generally broadcast through online platforms, which raises the question: Is it possible to be banned from online eSports platforms when someone contravenes these regulations, i.e. when a viewer uses racial slurs or sexist swear words?

What next?

Laws are implemented and practised in accordance with the requirements of the ever-developing world. ESports is an area that is gaining increasing attention and investment. It is crucial to implement provisions that are tailored to eSports’ technicalities and broad scope, and that grasp the irregularities such as match fixing, doping and violence in eSports.