Connect with us

Vissers Legal

Published

on

Continue Reading
Advertisement

Gambling

Legal Regulation of eSports in Chile

eSports presents novel legal challenges for regulators globally, with Chile experiencing its unique set of complications due to existing legislative frameworks. This analysis explores the intersection of Chilean gambling laws and eSports, emphasizing the legislative gaps and ambiguities that currently govern this rapidly growing industry. The paper aims to dissect the pertinent legal provisions and propose avenues for legislative reform, ensuring that eSports can thrive within a clearly defined legal environment in Chile.

Published

on

Esports in Chile | ELN

Introduction

In Chile, the rise of eSports has highlighted significant gaps in the existing legal framework, particularly concerning the classification and regulation of these activities. Unlike traditional sports, eSports involve virtual competitions that can include elements typically associated with gambling, such as entry fees and monetary rewards. This article examines Chile’s gambling laws, their applicability to eSports, and the legal challenges that arise from the current regulatory landscape.

Chile’s legal approach to gambling is primarily governed by the Ley N° 19.995, which establishes the bases for the authorization, functioning, and supervision of casino games. The regulatory body, Superintendencia de Casinos de Juego (SCJ), oversees these activities. However, eSports fall outside the explicit regulatory scope of this law, as they are not conducted in physical venues like casinos and are not solely dependent on chance.

  1. Article 3 of Ley N° 19.995: This article defines games of chance as those where the outcomes are predominantly subject to chance rather than player skill. eSports, where outcomes predominantly depend on players’ skills, strategies, and decision-making, challenge this definition. However, the lack of explicit recognition and differentiation in the law creates a gray area regarding their regulation.
  2. Decree No. 2385 on Municipal Revenues: This law grants municipalities the authority to regulate and license certain types of local games. While designed for traditional games, its broad language could theoretically extend to eSports events, adding another layer of complexity for organizers who must navigate local regulations that are not tailored to the digital nature of eSports.
  3. Consumer Protection Law (Ley N° 21.081): While not directly regulating gambling or eSports, this law protects consumers against misleading practices. It becomes relevant when considering how eSports are marketed and the clarity provided to participants regarding the nature of their participation and the use of their entry fees.

Challenges Arising from Current Legislation

The primary challenge in the current legal framework is the lack of specific provisions addressing the digital and virtual nature of eSports. This omission leads to several practical issues:

  • Uncertainty and Inconsistency: Event organizers and participants face uncertainty about the legality of their activities, potential liabilities, and the applicability of gambling laws.
  • Inadequate Consumer Protection: Without clear regulations, consumers may not be adequately informed about their rights or the nature of the events in which they are participating, potentially leading to disputes and dissatisfaction.
  • Inhibiting Industry Growth: The legal uncertainty can deter investment and hinder the development of a structured eSports market in Chile, which is crucial for the professionalization and global competitiveness of this sector.

Proposed Solutions for Legislative Reform

To foster a conducive environment for the growth of eSports in Chile, the following legislative reforms could help eSports:

  1. Explicit Recognition and Definition: Introduce specific legislation that clearly defines eSports, distinguishing them from gambling activities based on their skill-based nature.
  2. Regulatory Framework Development: Develop a tailored regulatory framework that addresses both the digital nature of eSports and the physical venues where events might be held.
  3. Stakeholder Engagement: Involve key stakeholders, including gamers, event organizers, legal experts, and consumer protection agencies, in the legislative process to ensure that the regulations are comprehensive and practical.

Conclusion

The legal challenges currently facing the eSports industry in Chile require thoughtful consideration and action from lawmakers. By addressing the gaps in the existing legal framework and introducing clear, tailored legislation, Chile can better support the growth and sustainability of eSports while protecting the interests of all parties involved. Establishing such a legal foundation is essential for Chile to remain competitive and innovative in the global eSports arena.

With material from: La Voz de Chile

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.

Continue Reading

General

Esports Washing: A New Chapter in Russian Esports with the Formation of ARKI

The landscape of Russian esports is undergoing a transformative shift with the formation of the Cyber Sports Infrastructure Development Association (ARKI), another initiative for ‘esports washing’. Industry giants, led by Langame, a developer of specialized software for cyber clubs, are uniting to advance the sector. Dmitry Lukin, the founder of Langame, and Pavel Golubev, the company head, have pioneered this initiative.

Published

on

Esports Washing in Russia ARKI | ELN

A Unified Front in Russian Esports

The Russian esports industry is witnessing a significant transformation and another step in esports washing as major players unite to form the Cyber Sports Infrastructure Development Association (ARKI). Spearheaded by Langame, a developer of specialized software for cyber clubs, ARKI promises to redefine the esports landscape in Russia.

Founded by Langame’s founder, Dmitry Lukin, and company head Pavel Golubev, ARKI is already gaining traction with prominent cyber club networks like Colizeum, True Gamers, and CyberX, as well as EZ Katka and F5 Cyber Sports Center, joining as members. This move signifies a united effort to bolster the industry’s growth and address the challenges it faces, including taxation and regulatory recognition.

The establishment of ARKI marks an era of proactive engagement for the industry. With 460 clubs under Colizeum, 114 arenas across Russia and CIS under True Gamers, and 220 clubs with CyberX, the association commands a significant presence in the esports sector. ARKI is not just for club networks but is open to hardware suppliers, software developers, and representatives from gaming industries and esports organizations, reflecting a comprehensive approach to industry challenges.

Navigating the Tax Jungle

One of ARKI’s primary goals is to advocate for the inclusion of cyber clubs and esports arenas in the patent tax system, a move that would simplify the tax process by allowing clubs to pay a fixed sum based on their specific type and location of operations. This system could replace the traditional tax declaration and payment process, offering a streamlined approach beneficial for smaller entities.

“The introduction of a tax system tailored for esports arenas and cyber clubs could significantly ease the bureaucratic burden these entities currently face,”

a Langame spokesperson explained.

Advertisement

Redefining Esports as a Sport

In addition to tax reform, ARKI aims to work on the legislative recognition of computer clubs and esports arenas as official sports venues. This recognition could transform how these entities operate and are perceived within the wider sports and recreational sectors.

The move towards forming ARKI is seen as a logical step in the evolution of the esports industry, which has already surpassed movie theaters in revenue generation. Many clubs are privately owned and categorize their revenue under equipment rental, which aligns with ARKI’s interest in patent tax utilization, indicating a strategic move towards financial optimization and regulatory compliance.

Moreover, Vasily Ovchinnikov, head of the Video Game Industry Development Organization, supports this initiative, highlighting its potential to dismantle barriers and foster growth. He notes the complex nature of the current system where computer clubs are taxed similarly to entertainment segments, which ARKI could address through its advocacy for beneficial tax positions and legislative recognition.

Esports vs. Traditional Entertainment: A Financial Juggernaut

The formation of ARKI is not merely a business maneuver but a reflection of the esports industry’s growth trajectory, which now outpaces traditional cinema in terms of revenue.

“The esports industry has evolved from a niche entertainment sector to a major economic entity, necessitating a formal structure like ARKI to advocate for its interests,”

noted Vasily Ovchinnikov, head of the Video Game Industry Development Organization. However, this rapid growth has not been without its challenges. The existing tax regime, tailored more towards general entertainment than competitive gaming, imposes a significant financial burden on club owners, who often categorize their revenues under equipment rental to mitigate tax liabilities.

Advertisement

Interestingly, the Russian Esports Federation (RESF) of Russia, established in 2016, has also been active in promoting the interests of the industry, achieving recognition of esports as an official discipline, and advocating for benefits such as military service deferments for esports athletes. However, ARKI’s formation signifies a broader coalition aiming to enhance the structural and regulatory framework of the esports industry further.

Sporting Venue or Recreational Facility? The Ongoing Debate

The distinction between recreational and sporting venues becomes particularly poignant in locations where alcohol sales can coexist with esports activities, as in shopping centers.

“The coexistence of alcohol sales and esports competitions in the same venues complicates their classification and requires careful regulatory consideration,”

Ovchinnikov added. This situation necessitates a clear regulatory framework to distinguish between purely entertainment-oriented clubs and those that genuinely foster competitive esports.

The Future of Russian Esports

For the industry, the stakes are high, and the potential is immense. With esports clubs seeing a 15% revenue increase in 2023 alone, reaching 23 billion rubles, the formation of ARKI could be the cornerstone of a new developmental phase for Russian esports. This unified approach could not only address immediate financial and regulatory challenges but also pave the way for a sustainable and recognized esports ecosystem in Russia.

Russia’s Esports Strategy

While the strategic formation of ARKI highlights the potential of Russian esports, it also casts a light on a broader tactic often seen in Russian governance: leveraging emerging industries like esports to project a modern, technologically advanced image while possibly overlooking deeper systemic issues such as regulation and international perception. This ‘esports washing’ raises questions about the sincerity of efforts to nurture the industry organically versus using it as a facade for enhancing national prestige.

Advertisement

With material from: kommersant.ru

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.

Continue Reading

General

ELN Announcement: Launch of Esports Legal Wiki and a Call for Papers

Published

on

ELN Announcement Launch of Esports Legal Wiki

We are thrilled to announce the official launch of the Esports Legal Wiki, a groundbreaking new resource in the field of esports law, edited by Dr Despoina Farmaki and Leonid Shmatenko. This comprehensive digital encyclopedia features over 60 detailed legal definitions and analyses authored by a distinguished panel of experts in the esports legal domain. We extend our heartfelt thanks to the following contributors for their invaluable insights and expertise:

Esports Legal News (ELN) is also excited to promote Dr. Despoina Farmaki to Chief Academic Officer. Dr. Farmaki, who has played a pivotal role in the development of the Esports Legal Wiki, will not only oversee the finalization of this extensive project but will also spearhead an exciting new academic initiative set to be unveiled in the first quarter of 2025.

We invite scholars and practitioners from around the world to contribute to the Esports Legal Wiki. Your submissions will help ensure that this platform remains a cutting-edge, authoritative source for legal professionals, scholars, and anyone interested in the legal aspects of esports.

To participate, please refer to the attached call for papers and submission guidelines. Your contributions are crucial to the success and continual growth of this essential legal resource.

Thank you to all our contributors and supporters for making this project possible. We look forward to your ongoing engagement and to revealing further innovations in the near future.

If you wish to cite the Esports Legal Wiki in your scholarly works, the suggested citation is: “Author’s name, “Term”, in: Farmaki/Shmatenko (eds.), ELN Esports Legal Wiki, Link to Wiki entry, Last updated.”

Advertisement

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.

Continue Reading

Trending