GRID Esports CEO Moritz Maurer on US betting regulations for esports and the role of game publishers in the esports ecosystem
Esports betting in the US is taking shape with more states actively working on new frameworks for the adoption of esports betting.
In light of recent developments towards the adoption of esports betting regulations in North Carolina, one of the industry’s veteran entrepreneurs in the esports betting space – Moritz Maurer, CEO and Founder of GRID, a game data platform focusing on official esports data assets – discusses the US esports betting landscape.Moritz breaks down the critical role that official esports data provided directly from game publishers will play in the industry.
iGN: Let’s start with a basic question. Where is it officially legal to bet on esports and which states are actively working on the esports betting regulations?
MM: As of today, esports is recognised in the licensing framework of 14 states that have introduced regulation for legal sports wagering. Since PASPA repeal in 2018, esports has been evaluated by regulators across the US to find the best approach that could ensure a suitable framework for esports betting given its unique nature compared to traditional sports. What we see now is that more states are taking the lead on devising esports-specific frameworks from a significantly more informed standpoint.
iGN: What are the major differences between each states’ approach?
MM: In some states, for example Nevada, esports initially required a licensing process for every single tournament. This approach naturally clashes with the fast-paced nature of esports and is being reevaluated because it limits the ability of operators to develop a consistent offering and ultimately inhibits the growth of the betting vertical across all game titles.
Contrary to this approach, lies the framework for esports betting in New Jersey which defines the games that are legal for wagering in the state and therefore equips operators with more clarity in regards to the content that they can engage their customers with.
iGN: What are the recent trends in esports regulation in the US?
MM: While both of the examples mentioned here consider the game publishers as special/super rights holders in the esports betting ecosystem, the state of North Carolina expanded on this concept and introduced an improved ability to impact the governance of the betting activity in their respective game IPs, for example dictating the scope of the events/tournaments within a specific games circuit that are fit for wagering.
iGN: Why is the precedent set in the North Carolina regulation an important milestone?
MM: In our opinion, the direction taken by North Carolina sets a precedent that other states should embrace. By actively involving the rights holder, who in the case of esports is the actual owner of the sport, it ensures that esports wagering is conducted in accordance with their respective vision for the game and its ecosystem. Aiming for this alignment will ultimately result in the best market conditions. It removes uncertainty for all stakeholders involved and ensures that the IP holder is in control of their game, data and ecosystem.
iGN: What is official data in esports?
MM: Official data in esports is in a class of its own when compared with unofficial data for esports and official or unofficial data for traditional sports. Firstly, in esports there is an actual IP owner of the sport itself contrary to traditional sports where the rightsholder licenses data rights only to the competition or tournament played in a specific sport. This means, from a rights’ perspective the data is as part of the game IP, similar to artwork, logos, or images, and therefore a lot more tangible as an asset that belongs to the game publisher.
Secondly, due to the digital nature of esports, there is a vast difference in the quality, speed and accuracy of official esports data as it is collected directly from the game server. By contrast, unofficial esports data is collected via scraping or manually from public broadcasts. Compared with official data, it is unreliable, limited (as most games have a limited field of view) and is delayed by multiple minutes. In traditional sports, the qualitative difference between official and unofficial data feeds is not as significant as it is in esports; as the means of data collection involve a human element. The technological solutions – while having improved in the past years are just not as integrated into the match as they are in esports.All of these factors make official data solutions in esports unrivalled for powering the best products for consumers in betting and media and the availability of an official data feed signals an intention by the rights holder to allow betting as engagement channel in their respective games.
iGN: How are regulatory bodies informing themselves as they approach policy making? Are industry professionals actively involved in the process?
MM: Each state has its own approach. We see increasing interest and engagement by regulators across the US. In fact, in July, 2022 I had a chance to present the topic of official data and the rights holders in esports betting to the Esports Technical Advisory Committee Meeting of the Nevada Gaming Control Board.
It was an honor for me to contribute to the legislative process, because I have been working at the intersection of esports, betting, and data for over a decade at this point, always advocating for the use of officially sourced data assets. The fact that official data and the rights holders are now part of the conversation in these rooms is a massive milestone on the way to actually address the esports-native challenges in the betting regulations.
iGN: What do you think are the central aspects in drafting these policies?
MM: Betting is built on data, and esports is a digital sport by nature. For nearly five years GRID has been operating in regulated esports betting as a conduit between all relevant stakeholders, introducing a strong data-driven technological foundation and learning about the industry’s needs. During that time we identified the key elements that matter – the integrity of the game, the bet and the data source itself.
With quality data being at the core of any betting activity, esports offers a unique opportunity to use a truly official source that provides access to instantaneous and reliable information on the exact status of the game and every single action taken by players at all times.
In essence, relying on official data preemptively addresses various aspects that have to be catered to in order to ensure a fair, sustainable and safe esports offering. This ultimately allows regulators and operators to embrace esports and its potential as a betting market.
iGN: What would you like to see next in this space?
MM: I want to see rights holders, in this case the game publisher, being recognised as the governing bodies that they are already acting for with their communities.To reiterate, representing the rights holders in esports is core to our identity as a company and mission as a platform business. The goal of GRID and our partners is to establish a framework that aligns the incentives of all stakeholders, has the integrity of the game in mind and ensures that the game publishers are recognised in the governance of regulated betting in relation to their game/IP.
I anticipate seeing other states taking note of the current trends, like the newly introduced regulatory framework in North Carolina, and hope for a general advance in esports betting legislation in the US.
GRID is a data platform serving the game industry with in-game data infrastructure, data management and asset distribution solutions. GRID partners with more than 90 rights holders including Riot Games, KRAFTON, WePlay and PGL, and offers a robust network of integrated data customers in media, fantasy, player coaching, and other categories.
If you are interested in official in-game data for your product contact GRID at firstname.lastname@example.org or visit www.grid.gg.