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Researchers have called for a governance framework to tackle “unhealthy” esports sponsorships, in order to protect players and fans.
Led by Dr Matthew Hutchinson from Keele University Business School, the researchers interviewed a number of UK-based esports competitors and fans, to learn more about their attitudes towards the current levels of governance in the esports industry.
Their findings, published in the International Journal of Sport Policy and Politics, revealed what they termed as a “wild west” governance landscape, with a ‘vulnerable financial structure, imbalance of power, and a lack of representation for stakeholders such as players and fans at the highest levels of the industry’.
Currently, the regulation of sponsorship within esports is ‘piecemeal’, according to a press release sent out this morning about the study, ‘as tournaments and teams devise their own rules with no discernible standardisation between them, resulting in a rise in “unhealthy” brands sponsoring esports events and teams such as those promoting fast food, alcohol, gambling, or cryptocurrency’.
Of course, there is no overarching governing body in esports as such, not one that has any true power over publishers, anyway. It is the publishers themselves who set the rules, instil governance in their own games and decide which sponsors are allowed, and which aren’t.
Several publishers have typically restricted team sponsorships around certain areas, such as alcohol, gambling and cryptocurrency. One example this year is Gaimin Gladiators players not being allowed to wear their usual esports jerseys at the RLCS London Major 2024.
Though, there is some change happening in recent years. Activision relaxed sponsorship restrictions in the Call of Duty League a few years ago, and Riot Games recently relaxed restrictions around betting sponsorships (more on that in the section below).
“Esports sponsorships from unhealthy brands are rising, but banning them could harm the industry financially according to our participants, showing a conflict between reality and ideality. We suggest a governance model that incorporates a multistakeholder approach, and with education on healthy and moderate consumption at the heart of it, to allow agency for individuals, rather than an outright ban of sponsors.”
Dr Matthew Hutchinson, Keele University
According to the study, “the public health sector has renewed its scrutiny of esports in recent years, due to concerns that it could put fans and players at risk of problems such as an inactive or sedentary lifestyle, poor diet, poor mental health, and problem gambling.
“These fears have led some tournaments to ban certain sponsor product categories like gambling companies, cryptocurrencies, political campaigns and several alcohol products. But despite these concerns, the researchers found that both players and fans felt powerless to influence the sponsorship decisions that take place in the industry, due to esports’ over-reliance on sponsorship revenue.
Instead, a multistakeholder approach and individual responsibilisation is proposed to address the challenges, with Dr Matthew Hutchinson, a Lecturer in Sport Business Management, saying: “Esports sponsorships from unhealthy brands are rising, but banning them could harm the industry financially according to our participants, showing a conflict between reality and ideality.
“We suggest a governance model that incorporates a multistakeholder approach, and with education on healthy and moderate consumption at the heart of it, to allow agency for individuals, rather than an outright ban of sponsors.”
The report continued: “When deciding on whether and how to implement greater regulation of sponsorship in esports, legislators and managers need to balance public health concerns with the potential benefits that sponsorship investment can bring to esports. For example, esports could be leveraged as a platform for health promotion education among young audiences.”
The role of governments in esports governance was much debated. Several participants expressed a desire for government responsibility in regulating esports sponsorship. But while some called for this, others said the UK government may not be best-placed to govern esports ‘given a lack of industry understanding’. Some also took the stance of allowing a range of esports sponsorships, and letting the viewers decide whether they are healthy or not, placing the responsibility around purchase decisions more with the viewers.
In 2022 the global esports market was valued at $1.384 billion, according to Statista, a figure expected to grow to $1.866 billion by 2025. Sponsorship provides by far the largest proportion of this revenue, contributing $837 million in 2022.
Riot Games relaxes restrictions around betting esports sponsorships for tier 1 teams
The release of the study is timely.
A few days ago, esports personality and content creator MonteCristo tweeted out the following, saying Riot will allow League of Legends and Valorant esports teams to have betting sponsors in 2025.
This was later confirmed by Riot Games COO of esports, Whalen Rozelle, who said: “A few weeks ago, we told partnered LoL Esports and VCT teams in Americas and EMEA that starting in 2025, they’ll be allowed to explore partnerships with Riot-approved betting platforms. (to make it clear, these are for LEC/VCT tier 1 teams)
“This decision wasn’t made lightly—it’s the result of careful study and planning to settle on a move that will unlock new revenue opportunities for teams while also protecting competitive integrity and the overall fan experience.”
Whalen also confirmed that Riot-owned channels will stay betting-free, with no betting brands appearing on its own broadcasts, socials, or jerseys.
He also said that Riot will vet all potential betting partners ‘to meet our standards for integrity, transparency, and fan engagement’.
All sports books partnering with teams will need to meet local regulatory and licensing requirements and match Riot requirements around content and promotion for this category.
So, it’s official. We’re now in an era of esports where Sam Cook’s face is not allowed on a Ruddy Esports jersey, but betting brands are fine, and where a football game with harmful loot boxes in it has a 3+ age rating, but a mobile single-player card game with no actual gambling in it is deemed 18+.
So, yes, better – and fairer – governance is absolutely needed, it seems.
Dom is an award-winning writer and finalist of the Esports Journalist of the Year 2023 award. He graduated from Bournemouth University with a 2:1 degree in Multi-Media Journalism in 2007.
As a long-time gamer having first picked up the NES controller in the late ’80s, he has written for a range of publications including GamesTM, Nintendo Official Magazine, industry publication MCV and others. He worked as head of content for the British Esports Federation up until February 2021, when he stepped back to work full-time on Esports News UK and offer esports consultancy and freelance services. Note: Dom still produces the British Esports newsletter on a freelance basis, so our coverage of British Esports is always kept simple – usually just covering the occasional press release – because of this conflict of interest.
