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Labor&Immigration

Moist Esports’ Legal Battle with U.S. Immigration over B1-Visas

The esports industry has recently been thrust into a legal spotlight due to Moist Esports’ initiation of a lawsuit against the U.S. Department of Immigration. This action follows a series of visa denials for the Australian contingent of their Apex Legends team, a pivotal challenge given the team’s qualifications and the implications of their participation in critical esports tournaments. This article offers an in-depth analysis of the legal and procedural aspects of the case, referring to foundational visa policies as discussed in our previous coverage on esports and U.S. immigration law.

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U.S. Immigration

Case Background

Charles ‘MoistCr1TiKaL’ White Jr., the founder of Moist Esports, has publicized the organization’s struggles with obtaining U.S. visas for its players. Despite qualifying for a major tournament in Los Angeles, the team faced repeated visa rejections. The U.S. immigration authorities challenged the veracity of the team’s professional status and ranking, leading to initial visa applications being denied. Subsequently, the players were compelled to abandon their team visas and individually apply for B-1 business visitor visas instead of P-1 or O-1 visas, which are typically issued for attending conferences or consulting with business associates. The last-minute approval of these visas allowed the players minimal preparation time for the tournament.

The lawsuit is built on allegations of procedural mishaps and the potential misinterpretation of eligibility criteria under U.S. immigration laws concerning professional esports players. As detailed in “An Overview of Esports and United States Immigration Law,” the specific visa requirements and criteria for esports athletes are intricate and often subject to the discretionary powers of immigration officials. The denial of P-1A visas, intended for internationally recognized athletes, to Moist Esports players suggests a significant disconnect between the recognition of esports in legal versus operational realms of immigration policy.

The case unfolds under the shadow of sovereign immunity, which may limit the scope of recoverable damages against a government agency, as hinted by MoistCr1TiKaL’s commentary on constitutional constraints. The discretionary nature of visa issuance, particularly under the P-1A category, often leaves substantial room for subjective decision-making by immigration officers. This aspect makes legal challenges arduous and sets a high bar for proving any claims of improper handling or bias in visa processing.

Economic Impact and Organizational Disruption

The visa denials and subsequent legal battles have wrought considerable financial strain on Moist Esports. The inability to compete under the organization’s banner not only resulted in direct financial losses but also diminished potential sponsorship and earnings from the tournament. These disruptions underline the significant stakes that immigration decisions hold over esports organizations, which operate in a rapidly globalizing competitive field.

Concluding Observations

This lawsuit may serve as a critical juncture for the recognition and handling of esports professionals within U.S. immigration frameworks. It challenges the consistency of the application of immigration laws to esports athletes, a relatively new area where traditional sports and modern digital competitions intersect. Whether or not Moist Esports succeeds in its legal claims, the outcome will likely influence future policy considerations and the operational practices of immigration authorities dealing with similar cases.

Image source: VisaService.de

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  • 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.

Labor&Immigration

Dubai Introduces Long-Term ‘Dubai Gaming Visa’ to Propel Esports Sector Growth

Dubai has introduced the ‘Dubai Gaming Visa,’ a strategic long-term initiative aimed at supporting talented individuals, creators, and pioneers in the e-gaming sector. This groundbreaking move seeks to foster skill development and provide numerous investment opportunities, enabling innovators to transform their ideas into successful projects.

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Dubai Gaming Visa / ELN

This initiative is a key component of the Dubai Program for Gaming 2033, launched by His Highness Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of the Executive Council of Dubai, last November. The program aims to position Dubai among the top 10 cities in the global gaming industry, significantly boosting the sector’s contribution to Dubai’s digital economy and increasing the GDP by approximately USD 1 billion by 2033.

Supporting Talent and Innovation in E-Gaming

Hala Badri, Director General of Dubai Culture and Arts Authority (Dubai Culture), emphasized the potential impact of the Dubai Gaming Visa on the cultural and creative industries, stating,

“The Dubai Gaming Visa embodies the vision and aspirations of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, and contributes to enhancing the emirate’s appeal as a premier destination for entrepreneurs, investors, game developers, designers, and programmers. It also attracts individuals with innovative ideas and both established and emerging companies specialising in the development and production of content, gaming applications, and artificial intelligence. This helps achieve Dubai’s cultural vision of being a global centre for culture, an incubator for creativity, and a thriving hub for talent.”

Enhancing Dubai’s Cultural and Creative Ecosystem

Badri further affirmed that the long-term visa highlights the uniqueness of Dubai’s ecosystem and the richness of its cultural and artistic scene, along with its cultural and social diversity. She added,

“Dubai continues its efforts to attract thinkers, intellectuals, and highly skilled individuals to provide opportunities and broaden their horizons by supporting and harnessing their efforts in comprehensive development and advancing the creative economy, which Dubai aspires to be a global hub of by 2026. At Dubai Culture, we are also keen on creating a sustainable creative climate that empowers talent, in line with our sectoral priorities.”

Job Creation and Industry Growth by 2033

With aspirations to create 30,000 new jobs in the esports sector by 2033, Dubai demonstrates substantial support for the industry. The emirate has leveraged its capabilities and framework to attract leading professionals and extends its support to hosting various initiatives, events, and exhibitions dedicated to the sector’s rapid growth and expansion.

Applying for the Dubai Gaming Visa

The Dubai Gaming Visa is part of the multi-year cultural visa categories granted by Dubai Culture and GDRFA-Dubai to writers, thinkers, authors, artists, intellectuals, and those with creative skills across six key sectors: cultural and natural heritage, performing arts and festivals, visual arts, books and press, audio-visual and interactive media, and design and creative services. This initiative is designed to encourage these talented individuals to enrich Dubai’s cultural and creative landscape and support Dubai’s strategic goals to establish itself as a leading destination for living, entertainment, and employment.

Applications for the Dubai Gaming Visa can be submitted via the Dubai Culture website or through https://dubaigaming.gov.ae/. Required documents include educational qualifications, proof of community contributions, job roles, copies of passports, residence permits, EIDs, cultural biographies and CVs, and contact details. Applicants must also provide information about their addresses, places of residence, occupations, and workplaces.

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  • 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

Legal Challenges and Future of eSports Employment in Chile

In recent years, the esports industry in Chile has witnessed significant growth, paralleling the global surge in popularity of digital sports. However, this expansion has not been without its legal challenges. A notable case adjudicated by the Second Labor Court of Santiago on March 30, 2021 (case file Nº-O-4046-2020), has spotlighted the complexities surrounding the esports employment status of players in Chile.

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eSports Employment in Chile | ELN

Introduction

The esports industry in Chile, mirroring the global surge in digital sports, has seen substantial growth but not without its share of legal complexities in the field of esports employment law. A significant ruling by the Second Labor Court of Santiago on 30 March 2021, under case file Nº-O-4046-2020, challenges the traditional understanding of employment relationships within this field, being significantly different from what the French courts ruled in 2024. This ruling has denied the existence of an employment relationship between an esports team and its players based on the criteria of subordination and dependency, sparking wide discussions in the legal and esports communities across Chile and Latin America.

Background of the Case

The case arose from a dispute over whether esports players should be considered employees of the esports teams they play for, entitled to corresponding labor protections and benefits. The court’s decision hinged on the lack of sufficient evidence of subordination and dependency, key elements that characterize an employment relationship under Chilean labor law. This judgment has significant implications, as it contrasts with the growing trend in other jurisdictions to recognize such relationships within the esports context.

In Chile, the labor context is governed by the principle of the primacy of reality, which aims to address discrepancies between the formal contractual arrangement and the actual practice. In the esports industry, where specific regulations are lacking, teams often engage players under Service Provision contracts. However, even with such contracts, an employment relationship can be established if the conditions of subordination and dependency, as outlined in Article 7 of the Labor Code, are met.

Article 7 of the Labor Code of Chile states:

“An individual employment contract is an agreement by which the employer and the worker mutually obligate themselves, the latter to provide personal services under the dependence and subordination of the former, and the former to pay a specified remuneration for these services.” Translation by the Author

The court’s dismissal of an esports employment relationship in this case was based on two main points:

  1. Independence of Players: The court found that esports players could perform independently from the team, a finding that deviates from the reality where players often have to adhere to strict training schedules and team strategies.
  2. Lack of Fixed Hours: The absence of fixed working hours was seen as indicative of a non-employment relationship, despite the players’ involvement in continuous and permanent activities, including training and participation in scheduled tournaments.

However, these findings overlook the structured nature of professional esports, which involves rigorous training regimes, adherence to team tactics, and participation in leagues that operate on fixed schedules.

In the opinion of Chilean legal scholars, the court erred in both key points. First, it suggested that an esports player could perform independently from the team, and secondly, it noted the absence of fixed work hours or continuous and permanent work. Diego Pinto Bravo argues that this reasoning greatly deviates from the actual conditions under which esports are conducted in the region. For instance, a League of Legends player necessarily belongs to a team to compete and must adhere to numerous contractual obligations such as daily training, maintaining a minimum division in the game, obeying coaches’ orders, and exclusivity.

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Furthermore, Diego Pinto Bravo contends that the concept of subordination and dependency is already regulated under our labor code, specifically articulated for football players within Articles 152 bis A and subsequent sections of the Labor Code. These articles establish a labor relationship between the parties that operate under the same conditions, with the same characteristics, and following the same elements discussed in these legal proceedings.

In his view, the second argument is equally flawed based on practical experience in esports. It completely overlooks the fact that the Entel Honor League and its seasons begin each year in January, comprising two tournaments; one from January to April, and the other from July to October. This schedule necessitates that players engage in continuous and permanent work for ten out of twelve months each year, involving daily training, weekly tournaments, constant competition, and content creation—a logic that was severely neglected by the judges in their reasoning.

As mentioned in the introduction, this decision, which admittedly was taken in 2021, starkly contrasts with the legal trends in jurisdictions like France, where the relationships between esports teams and players are increasingly acknowledged as employment, prompting legislative adaptations tailored to the unique aspects of esports. The ongoing legal debates and pending appeals in the Chilean Supreme Court are anticipated to further evaluate the employment status of esports players in Chile.

Conclusion

The case underscores a critical need for specialized legislative frameworks in Chile that recognize the distinctive attributes of esports and esports employment. These frameworks should equitably balance the rights and protections for players with the operational realities of esports teams. Proactive legal and policy reforms are essential to support the sustainable growth of esports, ensuring that Chile and, by extension, Latin America can adequately navigate the evolving legal landscape of this global phenomenon.

With material from: Estado Diario

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  • 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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