Esports, or electronic sports, is growing rapidly on a global scale.

In 2020, 439 million people watched esports events, and that number will only increase as new sports, technologies and platforms are developed.

Beyond esports itself, gambling on the activity is a much larger market than many would assume: an estimated 6.5 million people wagered on esports games in 2020. From sports betting, to fantasy esports, to jackpot games at skin betting sites, there are countless possibilities and opportunities for this sector.

Here’s a look at esports as a cultural trend, the hurdles that it faces, and what’s in store for the space:

A generational activity

While esports gambling attracts a broad range of demographics, with 83% of gamblers over the age of 24, it is often looked at as a generational activity favoured by younger populations.

Perhaps the best parallel to the rise of esports and related gambling is Texas hold ‘em: when the poker variant first came to TV in the 2000’s, many skeptics asked who would watch strangers play cards on TV. The annual World Series of Poker finale is watched by over one million viewers each year, however, and no one questions the popularity of televised poker tournaments.

In truth, esports has been popular on a global scale for years. The activity first gained traction in Japan, then European markets, and is now surging in the US. We can safely expect esports to grow in popularity, across generations, ultimately leading to the development of a fully fledged, culturally impactful industry.

Regulatory challenges

Opponents of legalising esports wagering generally cite concerns over youth gambling – that by allowing our youth to gamble on esports, they will be more likely to develop gambling dependencies or addictions.

This concern, while understandable, fails to take one key fact into account; that there is already a multi-billion-dollar black market for esports wagering in territories around the world, including the US, which is near-impossible for governments to monitor. Tech-savvy youth have no issue gaining access to esports gambling as it stands.

The central benefit to passing esports gambling legislation is simple: by legalising, legitimising, and regulating esports betting, we are able to adequately track the industry and its customers to ensure a safe, fun, and transparent space. Tax revenues from the activity can be dedicated to monitoring esports and funding research initiatives, and anyone under 21 will still be unable to bet on sporting events, virtual or physical.

Further, it’s crucial that esports companies prioritise responsible gambling in newly launched states. Entain Foundation U.S., for which I serve as a Trustee, partners with Mind Your Game, a campaign dedicated to promoting safer gaming in esports.

A successful esports regulatory environment

States like New Jersey have done a tremendous job in developing responsible, practical esports betting legislation. Successful laws, such as New Jersey’s, promote responsible gambling and ensure the commitment of funds towards education, research, and public health.

State legislatures that are concerned about the impact of legalising esports betting can also impose a low limit on maximum bets to reduce gamblers’ ability to place high-dollar bets, and language concerning accessibility and safety should be robust and clear.

Looking ahead

Entain CEO Jette Nygaard-Andersen predicts the $6bn sports betting and online gaming market is poised to become a $32bn market by 2030, a view largely supported by gaming analysts. Esports is playing an increasingly large role within these markets, and it will continue to make a substantial contribution to the growth of the global gambling industry and economy.

It’s our role to ensure that esports gambling is promoted thoughtfully and carefully. It’s the best way we can ensure a robust, sustainable, and profitable industry for all who occupy it.

William J. Pascrell III, or BPIII, is a Partner at Princeton Public Affairs Group and a Trustee for Entain Foundation U.S., a nonprofit dedicated to promoting responsible gambling, sports integrity and corporate compliance in the U.S. The organisation sponsors a variety of information and education programmes on problem gambling for professional athletes, collegiate athletes, coaches and teams at 40 US colleges and universities and several associated colleges.