Esports Governance: Legal Frameworks and Regulatory Landscape

There are undeniably millions of esports fans around the world. People may also now get involved in betting on esports. Bookmakers now list markets on match winners or the number of rounds in a series. The scale of tournaments and the range of side industries supporting them make esports feel every bit as big as some traditional sports. Thunderpick esports betting shows just how many different markets are available.

The legal and regulatory landscape of esports governance presents a complex intersection of traditional sports law, entertainment industry regulation, and emerging digital economy frameworks.

Unlike traditional sports governed by independent federations, esports operates under publisher-controlled systems that prioritize commercial interests while raising fundamental questions about player rights, competitive integrity, and regulatory oversight.

This analysis examines actual case law, regulatory frameworks, and academic scholarship to provide a comprehensive understanding of how legal systems are adapting to govern competitive gaming. The evidence reveals significant tensions between innovation and accountability, with publishers maintaining unprecedented control over their competitive ecosystems while facing increasing legal scrutiny from antitrust authorities, employment regulators, and player advocacy groups.

Publisher control versus independent governance models

With this growth comes a question: who keeps everything organised? Traditional sports tend to have governing bodies that create rules and manage the game. Football has FIFA and UEFA. Tennis has the ATP and WTA. Even chess has an international federation.

Many of these jobs fall to game publishers in esports. Riot Games runs the League of Legends World Championship and the Valorant Champions Tour. Valve oversees The International for Dota 2 and the CS2 Majors. That means the rules for each title are controlled by whoever created it. This keeps competitive play aligned with game updates. It also means every title has its own way of doing things. Lots of the biggest esports tournaments function well without requiring a specific overarching body.

Academic scholarship identifies the fundamental distinction between esports and traditional sports governance structures. Eric Windholz’s seminal work “Governing Esports: Public Policy, Regulation and the Law” (2020) argues that esports differs from traditional sports due to “primacy of its profit motive” and lack of custodianship over socio-cultural artifacts. This analysis establishes the theoretical foundation for understanding publisher-controlled governance.

The comparative analysis reveals stark differences between governance models. Traditional sports organizations like FIFA operate through independent tribunals with equal player-club representation, while esports publishers serve as judge, jury, and appeals court. FIFA’s Football Tribunal comprises three chambers (Dispute Resolution Chamber, Players’ Status Chamber, and Agents Chamber) with mandatory equal representation principles contrasting sharply with Riot Games’ unilateral control over League of Legends competitive structures.

Cem Abanazir and Tsubasa Shinohara’s analysis in the “Routledge Handbook of Esports” (2025) identifies four key principles governing esports law: (1) inextricable links between esports and legal governance; (2) stakeholder hierarchy with developers/publishers holding dominant power through intellectual property regimes; (3) prevalence of non-state regulation; and (4) selective state intervention when necessary.

Supporting arguments for publisher control emphasize intellectual property rights, arguing that game developers deserve control over their creative products and commercial investments. Publishers contend this control ensures consistent rule application, game integrity, and innovation-driven growth.

Opposing academic perspectives highlight the democratic deficit in esports governance. The German association study published in Frontiers in Sports and Active Living (2022) notes that “publishers control the virtual sporting environment and the rules of the game” as for-profit corporations, creating fundamental conflicts between commercial interests and sporting integrity. Legal scholars argue this creates power imbalances incompatible with established sports governance principles.

Employment classification and player rights cases

The landmark Turner “Tfue” Tenney v. FaZe Clan case represents the most significant player rights litigation in esports history. Filed in California Superior Court and U.S. District Court for the Southern District of New York (2019-2020), Tfue challenged his contract under California’s Talent Agency Act, claiming “grossly oppressive, onerous, and one-sided” terms that allowed FaZe to take up to 80% of his earnings while restricting sponsorship opportunities.

The case established crucial precedents for Talent Agency Act compliance and highlighted forum selection clause challenges in multi-jurisdictional esports contracts. Though settled confidentially in 2020, it significantly influenced industry practices regarding player agreement fairness.

More recently, the Paris Tribunal Judiciaire delivered a groundbreaking employment classification decision (TJ Paris, 27 mars 2024, n° 22/02668). The court reclassified a Counter-Strike player’s “self-employed worker contract” with an American esports club as an employment relationship under French Labor Code Article L.8221-6-1. The court found employer control through mandatory competition participation, training schedules (15 hours/week), streaming requirements (20 hours/month), and economic dependency demonstrated by regular payments (EUR 4,000 – EUR 5,000) and accommodation provision.

Jackson Wong’s comprehensive analysis “More Than Just A Game: The Labor and Employment Issues Within Esports” (UNLV Gaming Law Journal, Vol. 11, Issue 1, 2020) examines classification challenges across multiple jurisdictions. The analysis highlights complications from varying state tests (economic realities test vs. ABC test) and immigration issues for international players seeking P1-A visa eligibility.

Antitrust enforcement and competition law developments

The Department of Justice’s antitrust case against Activision Blizzard (U.S. District Court for the District of Columbia, 2023) represents the first major federal antitrust enforcement action in esports. Filed 3 April 2023, and resolved through final judgment on 11 July 2023, the case challenged Activision’s “Competitive Balance Tax” that penalized teams for paying players above company-set thresholds in Overwatch and Call of Duty leagues.

The settlement prohibited compensation limits, required antitrust compliance policies, mandated employee training, and granted DOJ access to records. This precedent establishes federal willingness to regulate esports league practices under traditional antitrust frameworks, potentially affecting other publisher-controlled salary cap systems globally.

The broader implications extend beyond salary restrictions. Academic analysis suggests publisher-controlled revenue distribution systems may face increased scrutiny under Sherman Act violations, particularly where they limit player compensation or restrict team economic decisions.

Intellectual property disputes and copyright enforcement

The Riot Games v. Shanghai Moonton Technology Co. litigation (U.S. District Court for the Central District of California, Case No. 2:22-cv-3107) illustrates complex international IP enforcement challenges in competitive gaming. The multi-year battle beginning in 2017 involved claims that Moonton’s Mobile Legends copied essential League of Legends elements, resulting in a previous USD 2.9 million settlement in China (2018) before reaching “historic settlement” in April 2024.

Amy Thomas’s analysis “A question of (e)Sports: an answer from copyright” (Journal of Intellectual Property Law & Practice, Volume 15, Issue 12, December 2020) argues esports is fundamentally different from traditional sports as “a sport that is owned” – built around commercially produced and copyrightable video games. This creates unique copyright holder authority to deny access and control downstream usage.

The Kyle Hanagami v. Epic Games choreography case demonstrates expanding IP protection in gaming contexts. After the district court’s dismissal, the Ninth Circuit Court of Appeals ruled that courts incorrectly reduced choreography to static poses, holding “short does not always equate to simple” regarding copyrightability. The case, recently settled after the Ninth Circuit reversal, establishes precedent for dance/choreography protection in video games.

Armağan Ebru Bozkurt-Yüksel’s comprehensive IP analysis “Intellectual Property Rights of Gamers in Esports” (Law & Justice Review, Year 11, Issue 21, January 2021) examines the complex ecosystem including gamer rights, team trademark rights, equipment design rights, and avatar/skin rights, advocating for greater protection of player IP rights, especially for teenage players.

Regulatory frameworks across jurisdictions

European Union frameworks

The Digital Services Act (Regulation EU 2022/2065) significantly impacts esports platforms through content moderation requirements. Fully applicable since 17 February 2024, the DSA requires gaming platforms to remove illegal content, provide algorithmic transparency, offer user appeal mechanisms with human review, and prohibit targeted advertising to minors. Violations face fines up to 6% of annual turnover.

GDPR implementation creates comprehensive data protection requirements for esports organizations. Gaming industry data collection includes names, addresses, birth dates, credit card information, IP addresses, behavioral data, and telemetrics. Foley & Lardner’s analysis identifies GDPR compliance challenges for “Data Collectors” (video game studios, tournament organizers, streaming platforms), noting potential fines up to EUR 20M or 4% of worldwide revenue.

United States federal and state legislation

Federal gambling laws create complex compliance requirements for esports. The Wire Act (18 USC § 1084) prohibits interstate transmission of bets, potentially restricting esportsbooks. The Unlawful Internet Gambling Enforcement Act (31 USC § 5363) prohibits financial institutions from processing payments for unlawful internet gambling, though application depends on underlying state law violations.

Current state-by-state esports betting status reveals significant regulatory fragmentation: 19 states explicitly legalize esports betting, 13 states specifically prohibit it, and 19 states maintain gray areas without specific legislation. Jake Bland‘s comprehensive analysis “Gambling On Video Games: The Global Esports Betting Market And The Dawn Of Legalized Esports Gambling In The United States” (University of Miami International and Comparative Law Review, Vol. 29, Issue 2, 2022) examines post-PASPA legal landscapes and state-by-state legalization challenges.

Asian regulatory approaches

South Korea’s Game Industry Promotion Act establishes comprehensive esports regulation through the Ministry of Science and Technology, including loot box disclosure requirements (effective 2023) and professional player frameworks under the Act on Promotion of e-Sports. The Korea e-Sports Association (KeSPA), approved by the Ministry of Culture, Sports and Tourism in 2000, manages 25 esports with official sporting event authority.

China’s regulatory structure through the National Press and Publication Administration implements strict minor protection measures limiting gaming to 8-9 PM on weekends and holidays (3 hours/week total), requiring real-name authentication and anti-addiction systems. Professional requirements mandate players be 18+ for official competitions and clubs maintain minimum 5 registered players.

French esports recognition framework

France became the first European country to legally recognize esports through the Digital Republic Act (2016) Articles 101-102, implemented through two decrees (May 2017). Decree 2017-871 governs competition organization requiring three-year approval from the Ministry of Digital Affairs, while Decree 2017-872 establishes professional player employment contract protections.

Professional player protections include recognition as athletes under Labour Code, minimum 12-month contract duration requirements, mandatory training and physical/mental support provisions, and professional risk prevention measures. Tax benefits include pension contributions and social security coverage.

Dispute resolution mechanisms and enforcement

Riot Games launched the first major industry-specific arbitration system for EMEA regions in 2024, covering League of Legends and Valorant competitions. Governed by Swiss law with administrative fees (EUR 500 – EUR 4,000) and arbitrator fees (EUR 1,000 – EUR 5,000), the system includes a Legal Aid Fund for financial assistance and ex aequo et bono decision-making based on equity and fairness.

WIPO and ESIC launched the International Esports and Gaming Tribunal. WIPO Alternative Dispute Resolution Services reports over 70% success rates for esports-related mediations, handling copyright infringement disputes between North American and Asian companies, royalty payment disagreements, unauthorized streaming cases, and cross-border IP licensing disputes.

Traditional sports comparison reveals significant disparities. FIFA’s modernized Football Tribunal system (2023-2024) provides equal player-club representation, transparent decision publication, and comprehensive appeals processes. The NBA’s collective bargaining agreement creates binding arbitration systems with player association representation, contrasting with esports’ publisher-controlled dispute resolution.

Data protection and privacy compliance

GDPR implementation creates specific challenges for esports organizations as comprehensive data controllers. Gaming platforms collect vast personal data including behavioral analytics, biometric information, location data, and financial records. Special category data processing requires additional Article 9 conditions, while child consent varies by EU member state (generally age 16).

Leonid Shmatenko’s analysis identifies key GDPR principles affecting gaming: lawfulness/fairness/transparency, purpose limitation, data minimization, accuracy, storage limitation, and integrity/confidentiality. International data transfer requirements for multiplayer games create additional compliance complexities.

The right to data portability creates particular technical implementation challenges for gaming platforms, requiring systems to export user data in structured, commonly used, and machine-readable formats while maintaining data integrity and security.

Player unionization and collective representation efforts

The League of Legends Championship Series Players Association walkout (2023) represents the first major collective action in esports history. The LCSPA successfully negotiated five demands including VALORANT-style promotion systems, revenue pools for developmental leagues, and changes to slot ownership policies, preventing World Championships exclusion.

The Counter-Strike Professional Players Association (CSPPA) organizes 180+ global players under advisor Scott “SirScoots” Smith, focusing on equipment standards, tournament quality, and collective representation without formal union structure.

Unionization faces unique legal challenges in esports’ three-party system (players, teams, publishers). Independent contractor associations may violate Sherman Act provisions absent labor exemption protection, while short game lifecycles complicate organization before games lose popularity.

SAG-AFTRA’s video game strikes (2016-2017 and 2024-2025) establish collective bargaining precedent in gaming. The recent 11-month strike (July 2024-June 2025) achieved 95% ratification of new Interactive Media Agreement with AI protections, securing consent requirements for voice replication and fair compensation structures.

Academic scholarship on governance effectiveness

Multiple academic frameworks analyze esports governance effectiveness. Network governance theory examines power distribution evolution toward network administration models, while legitimacy theory explores how esports organizations gain authority without traditional sports’ inherent legitimacy.

The German associations study applies institutional analysis to understand how World Esports Association (WESA) and eSport-Bund Deutschland e.V. (ESBD) pursue legitimacy in publisher-dominated ecosystems where they “cannot rely on taken-for-granted legitimacy” unlike traditional sports.  Agency theory and stakeholder theory applications reveal governance challenges and power dynamics, with publishers maintaining lead organization control while other stakeholders seek network administration organization models with distributed authority.

Regulatory body enforcement mechanisms

ESIC, established in 2015 as a not-for-profit members’ association, operates comprehensive anti-corruption frameworks including Code of Ethics, Code of Conduct, Anti-Corruption Code, Anti-Doping Policy, and Disciplinary Procedures. However, enforcement depends on member-driven implementation without independent authority.

The Global Esports Federation achieved IOC recognition as an international federation but lacks unified authority comparable to traditional sports governing bodies. Fragmented governance between International Esports Federation (IeSF), Global Esports Federation, and various national associations creates inconsistent implementation and enforcement.

The FIA’s groundbreaking Esports Code (December 2024) represents the first sports federation to create dedicated esports regulation, establishing the “FIA Esports Code” as Appendix E to the International Sporting Code for sim racing competitions with international licensing systems.

Future implications and legal evolution

The 2022-2025 period represents critical maturation in esports legal frameworks, marked by transition from legal gray areas to established regulatory oversight. Key trends include formalization of regulatory structures, increased enforcement of existing laws, and industry adaptation to legal requirements.

The DOJ antitrust enforcement, AI copyright precedents, and employment classification decisions signal growing governmental willingness to apply traditional legal frameworks to esports while recognizing unique industry characteristics. However, fragmented international governance, rapid technological change, and novel competitive formats continue creating specialized legal challenges.

Academic scholarship increasingly advocates for hybrid governance models that balance innovation with democratic representation, independent oversight, and established legal protections. The tension between commercial interests and sporting integrity remains central to ongoing legal evolution, with resolution likely requiring industry-specific regulatory frameworks that balance publisher rights with participant protections.

Conclusion

The legal and regulatory landscape of esports governance reveals an industry in transition from commercial entertainment to regulated sport. While publisher-controlled models enable rapid innovation and market growth, they sacrifice accountability, transparency, and democratic governance principles that characterize established sports frameworks.

Current legal developments demonstrate increasing governmental and judicial willingness to apply traditional legal frameworks to esports while recognizing unique digital competition characteristics. The emergence of employment protections, antitrust enforcement, IP precedents, and player collective representation suggests continued evolution toward hybrid governance models that balance commercial innovation with participant rights and competitive integrity.

Future development will likely focus on international harmonization, player protection standardization, and adaptation to emerging technologies while maintaining the delicate balance between innovation and regulation that defines competitive gaming’s unique position in the global sports ecosystem.