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Justice Department Cracks Down on Activision Blizzard Over Esports Wages

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Recently, the U.S. Department of Justice took action against Activision Blizzard, Inc. They claimed that Activision Blizzard, working with teams from the Overwatch and Call of Duty Leagues, conspired to lower esports players’ wages. They used the “Competitive Balance Tax” to achieve this. This tax penalized teams that compensated players beyond an Activision-set limit. These actions directly violated section 1 of the Sherman Act.

Specifics of the Violation

Delving into the specifics of the violation, the proposed Final Judgment mandated Activision to undertake several corrective measures. Firstly, Activision was required to certify that it had terminated all rules in the Overwatch and Call of Duty Leagues that imposed an upper threshold on player compensation. Furthermore, the company was prohibited from reinstating or implementing any rule that sets an upper limit on player compensation in any professional esports league under its control. Activision was also directed to notify all teams and players in its professional esports leagues about the meaning and requirements of the Final Judgment. Additionally, the company was instructed to roll out a revised antitrust compliance policy and to adhere to stringent cooperation and reporting requirements.

Public Participation and Feedback

The public was given an opportunity to voice their opinions on this matter. They were invited to submit their comments within a 60-day window from the notice’s issuance. All these comments would be made accessible on the Antitrust Division’s official website and would be filed with the Court for consideration.

Detailed Allegations

The allegations against Activision were detailed and pointed. It was revealed that Activision, in agreement with the independently owned teams in each league, had imposed the “Competitive Balance Tax,” which essentially functioned as a salary cap. This cap penalized teams for compensating esports players beyond a set threshold. Such conduct was found to stifle competition between the teams in each league, leading to suppressed wages for the players. It’s noteworthy that, unlike players in other professional sports leagues who have agreed to salary restrictions as part of collective bargaining agreements, players in Activision’s esports leagues were not unionized and had never negotiated for these rules. Following the Department of Justice’s investigation into this tax, Activision, in October 2021, publicly announced its decision to discontinue the implementation or enforcement of the Competitive Balance Tax in both leagues.

Relief Sought by the Department of Justice

In terms of relief, the U.S. Department of Justice sought the court’s intervention to declare that Activision’s agreements with teams regarding the Competitive Balance Tax rules were unlawful under section 1 of the Sherman Act. The court was also requested to permanently restrain Activision from entering into or enforcing any rule that imposes an upper limit on player compensation in any professional esports league that it owns or controls. Lastly, the U.S. sought any other relief that the court deemed just and proper to redress and prevent a recurrence of the alleged violations.

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Settlement Details

The Department of Justice’s press release outlined the terms of the settlement’s consent decree. This decree would prevent Activision Blizzard from implementing any form of tax or salary cap in the future. Notably, even before this settlement, Activision Blizzard had already ceased the tax in 2021, amidst an ongoing investigation by the Department of Justice. Joe Christinat, a spokesperson for Activision Blizzard, reiterated the company’s stance in an email to The Verge, stating their belief in the lawfulness of the Competitive Balance Tax and its non-impact on player salaries. He emphasized that the tax was never enforced, and the leagues had voluntarily removed it from their regulations in 2021. However, in 2022, reports emerged that settlement discussions between Activision Blizzard and the DOJ had stalled. The recent settlement indicates Activision Blizzard’s intent to sidestep any potential hindrances to its impending acquisition by Microsoft, which is already mired in allegations of anti-competitive conduct.

Conclusion

The case of United States of America v. Activision Blizzard, Inc. underscores the complexities of the esports industry and the challenges in ensuring fair compensation for players. The settlement serves as a reminder of the need for transparency and equity in player contracts and compensation structures.

United States of America v. Activision Blizzard, Inc., D.D.C., No. 1:23-cv-00895

Author

  • Leonid Shmatenko

    Leonid Shmatenko is part of Eversheds Sutherlands’ data protection and technology law team. He has vast experience in regulatory and general issues in the areas of eSports and Blockchain. He advises eSports associations and clubs on all legal issues, advises and supports crypto startups in all matters from planning, preparation to execution of private and public token offerings (so-called Initial Coin Offerings or ICOs). Furthermore, Leonid Shmatenko specializes in international arbitration and has participated in several arbitration proceedings (SAC, ICC, DIS, UNCITRAL, ICSID, ad hoc) as a party representative and secretary of the tribunal. Leonid Shmatenko studied at the Heinrich Heine University in Düsseldorf and is currently pursuing a PhD in international law. After his successful first state examination (2011), he completed his legal clerkship, inter alia, at the German Embassy in Lima and within international law firms in Düsseldorf and Paris. He passed the second state examination in 2015. He is an external lecturer at the National Law University of Ukraine “Yaroslav Mudryi”, where he teaches International Investment Law. He is admitted to the Bar in Switzerland and Germany. Before joining Eversheds Sutherland, Leonid Shmatenko worked as an attorney at leading law firms in Geneva, Munich and Paris.

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Labor&Immigration

Tribunal Judiciaire de Paris: Rethinking the Esports Employment Contract

The Paris Tribunal Judiciaire issued a landmark ruling on 27 March 2024, that has significant implications for the contractual relationships within esports. This decision, which reclassified an esports player’s service contract as an employment contract, marks a pivotal shift in how employment relationships are perceived and regulated in the rapidly growing esports sector. The ruling not only emphasizes the need for a clearer understanding of employment laws in new-age digital and entertainment industries but also potentially sets a precedent for future contractual disputes in esports across jurisdictions.

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Esports Employment Contracts ELN | Tribunal Judiciaire de Paris

Statement of Facts

The case, TJ Paris, ps ctx protection soc. 3, 27 mars 2024, n° 22/02668, involved an esports player who had entered into a contractual agreement with an American esports club to participate in Counter-Strike competitions from 2016 to 2017. The employment contract in question was titled a “self-employed worker contract,” under which the player was ostensibly hired as an independent contractor. This classification has significant legal and financial implications, primarily regarding tax and social security liabilities.

The French URSSAF Caisse Nationale, responsible for the collection of social security and family benefit contributions, challenged the contractual classification. URSSAF initiated a recovery action claiming that the income derived by the player under this contract should be subject to contributions as “non-commercial profits,” according to Article L131-6 of the French Social Security Act. The agency’s position was that the player’s engagement bore all the hallmarks of traditional employment rather than those of an independent contractor.

The player contested URSSAF’s assessment, arguing that despite the contractual designation as a self-employed worker, the actual terms and conditions of his engagement demonstrated a dependency and subordination typical of an employment relationship. This challenge led to judicial scrutiny of the nature of the contractual relationship between the player and the esports club.

The tribunal’s analysis centered on distinguishing between self-employed status and employment based on the degree of subordination to the employer, as characterized by French labor law. Article L.8221-6-1 of the French Labour Code defines independent contractors as follows:

“is presumed to be an independent contractor, any individual whose working conditions are defined exclusively by himself or in a contract, in conjunction with his customer”.

The French Labour Code stipulates that individuals registered as self-employed service providers are generally assumed not to have an employment contract with their clients while carrying out their activities. Nevertheless, this assumption can be challenged. The same legal provision notes that an employment contract may still be recognized if the registered individual delivers services in circumstances that create a continuous subordinate relationship with the client.

The judges meticulously reviewed the contractual obligations and daily activities imposed by the esports club on the player, which included:

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  • Mandatory participation in specific competitions as directed by the club.
  • A set schedule for training and streaming that the player was required to follow.
  • Requirements to wear the club’s uniform during official events and partake in promotional activities.

These conditions, alongside regular monthly payments and the provision of accommodations and travel arrangements by the club, clearly illustrated an employer-employee relationship, as the club exerted substantial control over the player’s professional activities.

Analysis of the Tribunal’s Ruling

The judges’ assessment focused on various aspects of the player’s contract and daily work engagements that pointed toward an employment relationship. The following elements were particularly influential in the tribunal’s decision:

  • Subordination and Control: The club required the player to participate in specific competitions, adhere to a strict training schedule of 15 hours per week, and engage in a minimum of 20 hours of streaming per month. Such requirements are indicative of an employer’s control over the employee’s work activities.
  • Contractual Obligations: The contract stipulated that the player wear the team uniform during competitions and participate in marketing activities dictated by the club. These obligations demonstrate the club’s control over the player’s professional image and public engagements, further evidencing an employment relationship.
  • Economic Dependency: The regular payment between EUR 4,000 and EUR 5,000, alongside provisions for accommodation and travel for competitions, indicated an economic dependency typical of an employment relationship rather than freelance or self-employed arrangements.
  • Termination Conditions: The contract allowed the club to terminate the agreement if the player failed to meet the set obligations or was unable to provide services for at least 30 consecutive days. This level of control and the potential for penalization align with the characteristics of an employee-employer relationship.

Implications of the Ruling

For Esports Clubs: The reclassification of service contracts to employment contracts suggests that esports clubs need to meticulously review and possibly revise their contractual practices. Clubs may face increased financial liabilities due to obligations to pay social security contributions and potential penalties for previously undeclared work, as outlined in articles L8223-1 and L8211-1 of the French Labour Code. This ruling may compel clubs to establish clearer, more structured employment agreements, potentially increasing operational costs but providing more stability and clarity for both parties involved.

For Players: Esports players may find this ruling beneficial as it provides a clearer path to securing employment benefits, including social security, health insurance, and guaranteed wages. This could also empower players to challenge unfavorable contractual terms and seek reclassification as employees to gain the protections and benefits that employment status confers.

For the Esports Industry: The decision may prompt a broader reevaluation of how esports professionals are classified across the industry. It challenges the current contractual norms and may lead to more standardized employment practices. While this could increase costs for esports organizations, it also has the potential to professionalize the industry further, attracting more stable investments and improving the overall working conditions for players.

Conclusion

The Paris Tribunal Judiciaire’s decision of 27 March 2024 is a very important one for the esports industry. As the sector continues to grow and professionalize, the legal definitions and frameworks that govern these professional relationships will be crucial. Esports organizations and players must take these changes carefully into account, balancing competitive interests with legal compliance and fair labor practices.

Via: Victoire-Avocats

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Author

  • Leonid Shmatenko

    Leonid Shmatenko is part of Eversheds Sutherlands’ data protection and technology law team. He has vast experience in regulatory and general issues in the areas of eSports and Blockchain. He advises eSports associations and clubs on all legal issues, advises and supports crypto startups in all matters from planning, preparation to execution of private and public token offerings (so-called Initial Coin Offerings or ICOs). Furthermore, Leonid Shmatenko specializes in international arbitration and has participated in several arbitration proceedings (SAC, ICC, DIS, UNCITRAL, ICSID, ad hoc) as a party representative and secretary of the tribunal. Leonid Shmatenko studied at the Heinrich Heine University in Düsseldorf and is currently pursuing a PhD in international law. After his successful first state examination (2011), he completed his legal clerkship, inter alia, at the German Embassy in Lima and within international law firms in Düsseldorf and Paris. He passed the second state examination in 2015. He is an external lecturer at the National Law University of Ukraine “Yaroslav Mudryi”, where he teaches International Investment Law. He is admitted to the Bar in Switzerland and Germany. Before joining Eversheds Sutherland, Leonid Shmatenko worked as an attorney at leading law firms in Geneva, Munich and Paris.

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Takaze’s Take: Free the Agents – Sexism and Misogyny in the Esports Business

This new format of an article (Takaze’s Take) explains how an eathlete can file a discrimination lawsuit in the USA. This article also discusses women in sports.

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Takaze's Take: Free the Agents

On 28 February 2024, Josefine Jensen, a member of Astralis’ Women’s Counter-Strike team, took a stand. She Xed a letter to Valve Corporation, demanding a change in their business practices. Specifically, she urged them to make female agent skins free to use in Counter-Strike. This issue, she believes, is not just about Skins but about the deep-rooted sexism and misogyny that pervades the esports industry. 

The esports world has a rich history of mistreating women.[1] However, women in America do have a way to counterattack. For example, suppose the misandrist is someone you work with. In that case, you can file a Charge of Discrimination with the Equal Employment Opportunity Commission (EEOC).[2] 

The EEOC enforces “federal laws that make it illegal to discriminate against a job applicant or an employee because of the person’s race, color, religion, sex, national origin, age, disability, or genetic information.”[3] If you sign and file a Charge of Discrimination, you are “asserting that an employer, union or labor organization engaged in employment discrimination.”[4] You must file a Charge of Discrimination with the EEOC before you can sue your employer for discrimination.

Takaze’s Take

Filing a Charge of Discrimination is not your only option. In fact, as the war against Diversity, Equity, and Inclusion (DEI) intensifies, the EEOC may be unable to protect you. Unfortunately, your enemies intend to compel the EEOC to enforce the status quo.[5] If DEI is important to you, then a showdown with your adversaries may be inevitable. 

Mr. Monopoly’s Wisdom

Your opponents view DEI as a zero-sum game. Fear and insecurities are at the center of the conflict.[6] We ought to celebrate your accomplishments.[7] Instead, your adversaries recognize that these fears and insecurities make their followers susceptible to viewing your success as a threat.[8] Mr. Monopoly can help you understand the schism. Until recently, your enemies owned the entire board. Their rule was ruthless and absolute. Over time, your foes’ forefathers were forced to make half-hearted concessions. Your forebears were given Mediterranean Avenue—Connecticut Avenue. Their adversaries expected them to be content. 

Those whose shoulders you stand upon continued to press the issue. You landed on Atlantic Avenue, and your sights are set on Boardwalk. The last seven to eight years in American politics should have clarified one thing for you: Your enemies consider your desire to own Boardwalk wholly unacceptable. 

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Their Strategy

Your enemies are clever.[9] They copied the tactics of Civil Rights activists.[10] Now, your opponents are erasing them from your history books.[11] Their recent legislative and judicial victories show that your adversaries are reaping the rewards of their efforts.[12] Your enemies likely believe their victory will be absolute if they can expunge the history of your forebears.

The Counter-Strike

The sports and entertainment worlds have not acquiesced to your enemies’ demands.[13] As we enter the next phase of the streaming wars, alienating marginalized groups is a surefire way to lose.[14] You can leverage the pursuit of profits to your advantage. For example, working at the FDIC was a never-ending party until the Wall Street Journal arrived.[15]The author hopes that soon, every woman will feel safe in the workplace. Perhaps your enemies feel secure because the esports world is not mainstream. The author hopes you show them that they are misreading the tea leaves.

The spotlight is shining brightly upon the women’s sports universe. The WNBA and ESPN plan to capitalize on Caitlin Clark and Angel Reese’s fame.[16] The NWSL is expanding.[17] Private equity firms are investing heavily in the sports world.[18] The NFL is arriving fashionably late to the dance, but their dance card is undoubtedly full.[19] The esports world claims to be unhappy with its dependence upon the Saudis, and the business model needs to be tweaked.[20]Investors not chosen by the major sports leagues will need a date. If DEI is important to you, now may be the time to press the issue. 

Advance your token to Boardwalk.

Image source: Netcompany

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[1] Ajay Rose, Inside the World of Female esports: “It’s a Scary Space for Women’, The Athletic (Jul. 23, 2023), https://theathletic.com/4635621/2023/07/23/inside-the-world-of-female-esports/.

[2] Filing a Charge of Discrimination with the EEOChttps://www.eeoc.gov/filing-charge-discrimination (last visited Apr. 7, 2024).  

[3] Overviewhttps://www.eeoc.gov/overview (last visited Apr. 7, 2024). 

[4] Id.

[5] Robert Draper, America First Legal, a Trump-Aligned Group, Is Spoiling for a Fight, N.Y. Times (Mar. 21, 2024), https://www.nytimes.com/2024/03/21/us/politics/stephen-miller-america-first-legal.html?smid=nytcore-ios-share&referringSource=articleShare&ugrp=c&pvid=E1F42499-3ECC-4095-9233-0DA8057CA02A&sgrp=c-cb.

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[6] Why Young Men and Women Are Drifting Apart, The Economist (Mar. 13, 2024), https://www.economist.com/international/2024/03/13/why-the-growing-gulf-between-young-men-and-womenMaking Sense of the Gulf Between Young Men and Women, The Economist (Mar. 14, 2024), https://www.economist.com/leaders/2024/03/14/making-sense-of-the-gulf-between-young-men-and-women.

[7] Aparna Rae, White Men’s Role in Advancing Equity and Inclusion, Forbes (Mar. 14, 2024), https://www.forbes.com/sites/aparnarae/2024/03/14/white-mens-role-in-advancing-equity-and-inclusion/?sh=6f4d22b85b5f.

[8] Nicquel Terry Ellis & Catherine Thorbecke, DEI Efforts are Under Siege. Here’s What Experts Say is at Stake, CNN (Jan. 11, 2024), https://www.cnn.com/2024/01/07/us/dei-attacks-experts-warn-of-consequences-reaj/index.html.

[9] Nicholas Confessore, ‘America is Under Attack’: Inside the Anti-D.E.I. Crusade, N.Y. Times (Jan. 20, 2024), https://www.nytimes.com/interactive/2024/01/20/us/dei-woke-claremont-institute.html; Meg Little Reilly, Anti-DEI Bills Rely on Vague Language and Self-Censorship, Forbes (Mar. 5, 2024), https://www.forbes.com/sites/meglittlereilly/2024/03/05/anti-dei-bills-rely-on-vague-language-and-self-censorship/?sh=75b5535b1742.

[10] James Devitt, Bayard Rustin’s Blueprint for Activism—and Perhaps Progresshttps://www.nyu.edu/about/news-publications/news/2023/august/bayard-rustin-s-blueprint-for-activism-and-perhaps-progress.html (last visited Apr. 7, 2024); Adam Gopnik, Eclipsed in His Era, Bayard Rustin Gets to Shine in Ours, The New Yorker (Nov. 6, 2023), https://www.newyorker.com/magazine/2023/11/13/eclipsed-in-his-era-bayard-rustin-gets-to-shine-in-ours.

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[11] Taifa Natalee Alexander, Tracking the Attack on Critical Race Theory in Education, U.S. News (Apr. 11, 2023), https://www.usnews.com/opinion/articles/2023-04-11/tracking-the-attack-on-critical-race-theory-in-education;  Daniel Golden, Muzzled by DeSantis, Critical Race Theory Professors Cancel Courses or Modify Their Teaching, ProPublica (Jan. 3, 2023), https://www.propublica.org/article/desantis-critical-race-theory-florida-college-professors; Myles Hollingsworth, AP African American Studies and Critical Race Theory Ban in Florida, The Crisis (July 24, 2023), https://naacp.org/articles/ap-african-american-studies-and-critical-race-theory-ban-florida;  David Bernstein, Is Opposition to Critical Race Theory Correlated With Ignorance of Critical Race Theory?, Reason (Apr. 2, 2024), https://apple.news/AQmeDx-k2Te6xfEP5a69ndg.

[12] Jeff Green & Simone Foxman, Why Corporate America Has a Diversity Problem, Bloomberg (Mar. 14, 2024), https://www.bloomberg.com/news/articles/2024-03-14/video-why-corporate-america-has-a-diversity-problem.

[13] Bill King, The Pushback on DEI, Sports Business Journal (Mar. 11, 2024), https://www.sportsbusinessjournal.com/Articles/2024/03/11/dei-pushback; Jeremy W. Peters & Brooks Barnes, The Oscars Now Have D.E.I. Rules, But Some Say It’s Just a Performance, N.Y. Times (Mar. 10, 2024), https://www.nytimes.com/2024/03/08/us/oscars-oppenheimer-dei-diversity.html.

[14] Dr. Darnell Hunt & Dr. Ana-Christina Ramon, Diverse Audiences Prop Up A Struggling Theatrical Industry and Demand Diversity on Screen, Forbes (Mar. 7, 2024), https://www.forbes.com/sites/drdarnellhuntanddranachristinaramon/2024/03/07/diverse-audiences-prop-up-a-struggling-theatrical-industry-and-demand-diversity-on-screen/?sh=3ff2cb78742d.

[15] Rebecca Ballhaus, ‘What the Hell is Going on at the FDIC?’, The Wall Street Journal (Jan. 10, 2024), https://www.wsj.com/articles/fdic-6d9e8bf1.

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[16] Jacob Feldman, WNBA Has Big Plans to Ride Women’s Basketball Momentum, Sportico (Apr. 4, 2024), https://www.sportico.com/leagues/basketball/2024/caitlin-clark-wnba-momentum-popularity-draft-marketing-1234773879/; Tom Friend, Engelbert: Clark-Reese Could be the New Bird-Magic, Sports Business Journal (Mar. 3, 2024), https://www.sportsbusinessjournal.com/Articles/2024/03/03/wnba-cathy-engelbert-caitlin-clark-angel-reese.

[17] Cleveland Soccer Group Announces 12k Season-Ticket Pledges for Possible NWSL Expansion Franchise, Sports Business Journal (Apr. 4, 2024), https://www.sportsbusinessjournal.com/Articles/2024/04/04/cleveland-ohio-nwsl-expansion-team-bid?hl=NWSL&sc=0&publicationSource=searchNWSL Enters 2024 Campaign with Renewed Hope Amid Offseason Growth, Sports Business Journal (Mar. 15, 2024), https://www.sportsbusinessjournal.com/Articles/2024/03/15/nwsl-2024-season-preview?hl=NWSL&sc=0&publicationSource=search.

[18] Arctos Partners Raises $4.1B for Investments in Sports, Sports Business Journal (Apr. 2, 2024), https://www.sportsbusinessjournal.com/Articles/2024/04/02/arctos-partners-deals?hl=private+equity&sc=0&publicationSource=search; Abby Schultz, The Wealthy are Turning to Sports for Diversification, Barron’s (Jan. 2, 2024), https://www.barrons.com/articles/the-wealthy-are-turning-to-sports-for-diversification-9726aaac.

[19] Ben Fischer, Explaining the Caution on Private Equity, Sports Business Journal (Mar. 28, 2024),https://www.sportsbusinessjournal.com/Articles/2024/03/28/explaining-nfl-private-equity-caution?hl=private+equity&sc=0&publicationSource=search.  

[20] Asli Pelit, In Fading Esports Business, Saudi Money Still Flows, Sportico (Mar. 15, 2024), https://www.sportico.com/business/sponsorship/2024/esports-investment-saudi-arabia-1234770868/.

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Author

  • Takaze Turner

    Takaze A. Turner, a distinguished figure at the intersection of entertainment and law, showcases a profound passion for anime, cinema, and gaming. His academic journey commenced at the Ohio State University, where he excelled in English, earning his degree with cum laude honors. Furthering his legal education, Takaze achieved his Juris Doctor from the University of Missouri School of Law, before embarking on specialized legal studies. He has since attained an LL.M. in Business Law from Florida State University College of Law and an LL.M. in Entertainment Law from the University of Miami School of Law. Currently, he is enhancing his expertise by pursuing an LL.M. in Taxation Law at the same institution. Takaze’s multifaceted legal education, coupled with his deep-rooted interests in entertainment, positions him uniquely within the legal landscape. His academic accomplishments reflect a dedicated pursuit of knowledge across various sectors of law, particularly those intersecting with the business and entertainment industries. At the core of his professional journey is a commitment to understanding and navigating the complex legalities surrounding entertainment and media, ensuring he remains a pivotal figure in legal discussions related to these dynamic fields. His ongoing pursuit of an LL.M. in Taxation Law further exemplifies his dedication to broadening his legal acumen, underscoring his role as a key contributor to the legal community, especially in areas where law meets entertainment and technology.

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Labor&Immigration

Saudi Arabia Esports and Ethics: The Dilemma of the LGBTQ+ Community Competing in KSA

The intersection of esports, international law, and human rights has once again come into the spotlight with the announcement of the 2024 World Esports Championship (WEC) in Riyadh, Saudi Arabia. This event, poised to be a major gathering for gamers from across the globe, has raised serious concerns regarding the safety and inclusion of LGBTQ+ players, with Esport Canada at the center of a growing debate.

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Saudi Arabia LGBTQ / ELN

On 11 March 2024, Esport Canada opened applications for the Canadian women’s Counter-Strike 2 team, set to compete in Riyadh. Interest from players like Ariane “ARIANARCHIST” Lafrenière, a current ESL Impact Season 5 competitor and openly transgender player, quickly turned to concern over safety in a country known for its stringent laws against the LGBTQ+ community. According to Human Rights Watch, Saudi Arabia’s treatment of LGBTQ+ individuals includes severe punishments such as flogging, imprisonment, and even the death penalty for homosexual acts.

In light of these concerns, Melissa Burns, Founder and CEO of Esport Canada, made a sobering acknowledgment:

“Esport Canada cannot make any promises/guarantees about the safety of LGBTQ+ competitors at the Saudi event.”

This admission reflects a troubling conflict between the organization’s commitment to “Equity, Diversity & Inclusion” and the reality of participating in an event hosted in a country with a well-documented history of human rights abuses.

The Global Esports Dilemma

This issue is not unique to Esport Canada. The Norwegian Esports Federation, through its President Elin Yoojung Moen, expressed similar sentiments, acknowledging the impossibility of assuring safety for LGBTQ+ members of their delegation. Moen’s statement to Erik Fossum of pressfire.no,

“we cannot guarantee that a Norwegian gay or transgender person [won’t be] arrested for being themselves while in Saudi Arabia,”

highlights the ethical responsibilities of esports organizations and the broader gaming community when choosing event locations and partners.

The dilemma faced by Esport Canada and others is emblematic of a larger issue within international sports and esports: the balancing act between global inclusivity and the sovereignty of host nations with conflicting values. Saudi Arabia’s investments in sports and esports, part of its Vision 2030 initiative, have sparked debates about “sportswashing” – the practice of using sports investments to distract from human rights issues.

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The Facade of Openness

The Saudi Tourism Authority’s recent statement that it is “welcoming LGBT tourists” underscores a profound contradiction within the kingdom’s policies towards the LGBTQ+ community. By stating,

“Everyone is welcome to visit Saudi Arabia and visitors are not asked to disclose such personal details,”

the authority suggests a superficial openness that belies the harsh reality faced by the local LGBT community. This form of “don’t ask, don’t tell” policy, aimed at boosting tourism, starkly contrasts with the life-threatening conditions under which the local LGBTQ+ individuals live.

Modernization Versus Human Rights

The kingdom’s efforts at modernization under Crown Prince Mohammed bin Salman, including the introduction of cinemas and music concerts, have not extended to meaningful reforms in human rights practices. The continued enforcement of sharia laws and the doubling of capital punishments under his leadership reveal a disconcerting gap between the image Saudi Arabia wishes to project and the oppressive conditions that prevail within its borders. For the local LGBTQ+ community, the kingdom’s invitation to LGBT tourists is a grotesque insult, highlighting the disparity between the treatment of foreign visitors and the reality of those living under its laws.

Implications for Esports and Beyond

The juxtaposition of Saudi Arabia’s attempts at rebranding with its unchanged human rights record poses significant ethical questions for international bodies and organizations like Esport Canada. Participating in events hosted by countries with such glaring discrepancies in their treatment of human rights exposes the complex interplay between economic opportunities and ethical considerations. As the esports industry continues to grow, the decisions made today will undoubtedly influence its moral and ethical landscape in the years to come.

The scenario surrounding WEC 2024 in Riyadh illustrates the urgent need for a broader dialogue within the esports community and beyond—about respecting and ensuring the safety of all participants, regardless of their identity. It challenges stakeholders across the spectrum to reconcile the allure of global engagement with the imperative of upholding the dignity and rights of every individual.

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Image source: New Thinking

Article with information from: dust2.us

Author

  • Leonid Shmatenko

    Leonid Shmatenko is part of Eversheds Sutherlands’ data protection and technology law team. He has vast experience in regulatory and general issues in the areas of eSports and Blockchain. He advises eSports associations and clubs on all legal issues, advises and supports crypto startups in all matters from planning, preparation to execution of private and public token offerings (so-called Initial Coin Offerings or ICOs). Furthermore, Leonid Shmatenko specializes in international arbitration and has participated in several arbitration proceedings (SAC, ICC, DIS, UNCITRAL, ICSID, ad hoc) as a party representative and secretary of the tribunal. Leonid Shmatenko studied at the Heinrich Heine University in Düsseldorf and is currently pursuing a PhD in international law. After his successful first state examination (2011), he completed his legal clerkship, inter alia, at the German Embassy in Lima and within international law firms in Düsseldorf and Paris. He passed the second state examination in 2015. He is an external lecturer at the National Law University of Ukraine “Yaroslav Mudryi”, where he teaches International Investment Law. He is admitted to the Bar in Switzerland and Germany. Before joining Eversheds Sutherland, Leonid Shmatenko worked as an attorney at leading law firms in Geneva, Munich and Paris.

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