Are you looking to start an esports team? In this final article of a two part series on esports and law for Asia Law Network by video games and entertainment lawyer, Adrian Kwong,  we look at things from the perspective of someone on the business side, such as a team owner or manager:

In the first article,  I touched on various things an esports player should look out for when reviewing a player contract. These included being clear as to contract obligations and expectations, player employment status, compensation, behaviour, the ownership of intellectual property, and rights of termination.

This second article looks at five legal areas for a team to bear in mind.
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1. Contracting with players

What can you include in the player contract to better protect your team’s interests as players leave the team?  For example, can you include a buyout clause? Can you restrict the players’ ability to play for another team?  Must they repay training or tournament costs? Can you restrict what they say to the press when they leave?  Would such clauses be legally enforceable?
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Overall, as you draft your team contracts, do consider whether your terms are not just (a) clear enough to legally rely on, but also (b) fair, in that they are in line with “market practice” or “industry standards” (whatever those might be in the still-evolving industry).  After all, you don’t want your contract being described as an “embarrassing slavery of a contract” or “utterly vile and atrocious”?[1]

You don’t want players tempted to break match-fixing rules for sums as small as USD 900, citing poor team compensation, as was seen in one SE Asian case.[2]

And of course, not having valid contracts, not paying players (and reporting that you have done both) could definitely be a team issue; a team in North America was actually banned in 2016 for this.[3]

     2.  Managing a team

When it comes to running a team, the actions of individual players may get you and the team in legal trouble. For example, bribery, cheating, fraud, or drug use could lead to corporate and criminal liability.

• In Korea for example, 9 were arrested in 2015 for fixing StarCraft 2 matches, resulting in a coach and player being banned for life.[4]  Note : In Korea, where esports players are licenced, such actions can also result in prison time.
• Two LoL teams were stripped of placings and banned by Riot in 2012 for “collusion” (Dignitas and Curse).[5]
• The FatGames team was penalised for allowing a different player to play than was registered.[6]

As such, a responsible manager would be advised to set clear lines on illegality, gambling, substance abuse, and even players’ social media postings. Should they disclose sponsorship or conflicts-of-interests in reviews, or pay taxes on benefits-in-kind, for example?

• The US Federal Trade Commission would agree, having warned bloggers and athletes in 2017 of their duty to disclose sponsored connections. [7]
• In the CSGO Lotto skins gambling case, the CS:GO bloggers didn’t mention that they owned the site they were promoting.[8]
• Sponsored players and teams in Singapore should also consider the Inland Revenue Authority’s guidance on social media influencers and taxes.[9]
  
  

Given that players may front large audiences (the top global names can have millions of followers, and just one event can have a live stream of at least 60 million[10]), with direct access to channels like Twitch and their own social media accounts, the potential for publicity-related issues (including online meltdowns, harassment and even defamation or hate speech) can be especially quickly magnified.

• Anti-religious comments during a livestream got a Polish player kicked off his team in 2016.[11]
• Just this month, a SE Asia player was banned by Valve from a DoTA 2 tournament in China for alleged racism.[12]
• Another two European LoL players were suspended in 2014 for their abusive language, harassment or being toxic in queue.[13]
  
  

Do consider putting in place clear and appropriate policies – ideally also backed up by the team contracts – so as to better manage team risks.  This is particularly true if you are operating a team house, and there are any minors or females involved. In addition to house rules like curfews, do consider appropriate health and safety precautions, as well as basic insurance and security measures.  Also, on a team level, do not neglect your other internal compliance areas, such as corporate secretarial, employee and investor matters.

     3.  Intangible property management

As you grow your team, are you also building up a reputation and your own brand?  Do you make money off merchandising or licencing them?
Don’t risk losing control of your intangible assets or value. Consider making sure that your team name, logos, and other potentially valuable intellectual property required are legally cleared for use and protected, including by applying for appropriate registration.  Do also consider providing that your players, managers and employees have appropriate written assignments of IP to the team. Lastly, be ready to police the serious misuse of your brand, or theft of company property or information.

     4.  Partner revenue deals

As the esports industry grows, ever-more revenue-generation options are opening up for your team’s business.  We see the sometimes-headline-grabbing prize winnings (as may be shared with your players), but teams today are definitely also earning off sponsorship and advertising deals, merchandising, live event and venue ticket sales, publisher partnerships, and last but not least, broadcast and media rights licencing.
Given the relatively new and still fragmented (multiple games, developers, and channels) state of the market, we understand that there is still relatively little industry consistency on business deal terms or structures.
As such, do not assume that the first contract you see is the “only way this is done”, and don’t be afraid to negotiate the contract if you feel something doesn’t work for you and your business (and have a lawyer help redraft the language to what you think is more accurate or reasonable).

      5.   Governance and regulation

Last, on a very high level, what rules regulate your team’s eco-system?
As we know, the industry is still developing.  In particular, there is no universal alignment of rules and league regulations. Instead these are heavily influenced by the individual game developers for their own leagues.
Remember, as the developer and owner of the game and the intellectual property, developers can change their own rules pretty much any time they want – including who can take part in any given tournament that they operate.  As such, do read the specific tournament and developer rules and keep up-to-date on anything that could have a material impact on your team (and make sure the players know the ones that can get them disqualified!).

Having said all that, with esports recently making it as a medal sport into the 2022 Asian Games, and 2019 South-East Asian games, likely using multiple games (eg 2-2-2 for console, PC and mobile) across multiple developers/ecosystems, it will be interesting to see if there is greater alignment of rules and governance (eg ethics, cheating, and adjudication). We are certainly keeping an eye open for anything coming from Singapore’s new national esports association, the Singapore ESports Association, as well as any moves from the Asian Electronic Sports Federation (AESF) as the sole competent authority in Asia recognized by the Olympic Council of Asia.

Esports is a topical and exciting area right now, and attention can only grow with its recognition as a medal sport for the Asian and SEA Games. With that growth comes many possibilities for increased business.  As with any relatively undeveloped area, though, one can also encounter the potential for legal uncertainty or even disputes.  Hopefully, some awareness of the legal risks –  and a little legal counsel – can perhaps help you prevent and manage issues and focus on maximising your esports business.

Do contact us if you have any questions or comments.


[1] https://cybersport.com/post/indian-asian-games-terrible-esports-contract and https://twitter.com/OfficialBleh/status/1004430804913541120
[2] https://www.joindota.com/en/news/22287-update-mineskimsievogt-match-fixing-scandal
[3] https://www.lolesports.com/en_US/articles/competitive-ruling-team-impulse
[4] https://motherboard.vice.com/en_us/article/3dkxew/9-people-have-been-arrested-for-fixing-starcraft-matches
[5] https://www.pcgamer.com/uk/top-two-league-of-legends-teams-from-mlg-summer-disqualified-for-collusion/
[6] https://www.denofgeek.com/us/games/esports/238498/6-insane-esports-scandals
[7] https://www.ftc.gov/news-events/press-releases/2017/04/ftc-staff-reminds-influencers-brands-clearly-disclose
[8] https://www.bbc.com/news/technology-36702905
[9] https://www.iras.gov.sg/irashome/uploadedFiles/IRASHome/Businesses/Social%20Media%20Influencer.pdf
[10] League of Legends (LoL) World Championship final in Beijing, 60 million watched the final via live stream: https://www.businesstimes.com.sg/brunch/game-on-esports-levels-up
[11] http://pacific.network/2016/11/esports-pro-got-kicked-out-from-team-after-racist-remark
[12] https://www.channelnewsasia.com/news/sport/filipino-banned-from-china-esports-tournament-over-alleged-racism-10996142
[13] http://forums.euw.leagueoflegends.com/board/showthread.php?t=1749326

Sharing an interview that Adrian gave to Red Hare Games Studios for their gaming blog, accessible here.  We covered video games, lawyering, views on the games industry and Singapore scene, and more!

"When we think of lawyers, we often think of courtroom dramas, back-door shady deals and greasy palms. It is not often we associate lawyers and gamers in the same equation. But many events in 2018 has brought the legal implications of games and game design to the light of the mass media. So it is only appropriate for the interview that ends the year to touch on such matters. Take a peek behind the curtain with Adrian Kwong from Consigclear as he talks about his experience being a lawyer in the game industry (minus the spiky hair and screams of “Objection!”)."


​Thanks, Red Hare, for the feature!

Consigclear lawyer Adrian quoted on possible legal angle in this Tech in Asia article on the similarities in maps of Go-Jek Singapore to those of Grab, including what looked like specific data points created by and for Grab such as ‘GrabLanes’ and building pick-ups :

"Based on the similarities flagged in the [Mothership] article, one must wonder how Go-Jek came to include all those specific data points in their app. The onus is now on Go-Jek to explain this, or risk facing a possible copyright infringement lawsuit."

“Numerous ‘fingerprints’ such as phantom buildings, deliberate naming conventions, and building shapes, as well as various errors were referred to as suggestive of Virtual Map’s widespread copying of SLA’s material,” Kwong explains”, in reference to [a slew of street directory map infringement actions taken some years back.]

Article is subscriber content, though we understand the first click will work.

For more context, and details/images, see original Mothership article here : https://mothership.sg/2018/12/go-jek-app-data-grab/
 
Grab mapping effort story : https://www.grab.com/sg/blog/have-you-spotted-the-little-green-dots/

Following on from our April post on participating in the "Legal Issues in Legal Tech" panel at TechLaw.Fest 2018, I am very excited to share our little contribution to legal innovation and legal practice as part of the journey with the Future Law Innovation Programme, Singapore #FLIPbySAL.   As far as we are aware, Consigclear LLC is the first ever Singapore law firm given a formal regulatory approval to operate out of a co-working space. Not a distinct office, or even a dedicated desk, but from any part of the space, the same way more and more clients are working out of these co-working spaces themselves. That's pretty new ground, we think!

The law firm is still bound by professional obligations, especially around preserving confidentiality., but this sort of approval does give many more legal practitioners another option in structuring the way they organise their business and more efficiently deliver client services moving forward.  I am appreciative of the support received from Singapore Academy of Law, FLIP, and others, as well as Penny Wu from Lexlink, and that the regulators were open to considering #innovation and something different.

Do ping me if you would like to discuss how this was done, or if you have ideas or feedback on making this work better for others.

You can also read (or watch) more about this effort and my time as a pioneer in FLIP here :
 
www.flip.org.sg/blog/a-coffee-with-adrian-kwong-consigclear-llc

A great few days 5-6 April 2018 at the inaugural TechLaw.Fest #TLF18 organised by the Singapore Academy of Law, ending with speaking on the panel "Legal Issues in Legal Tech".  Joined by the dynamic fellow panelists from a law firm's tech arm, an MNC, two legal tech startups,  and the excellent and organised moderator (from the Government), it was a ride that went into a wide-ranging discussion of Section 33 of the Legal Profession Act and what it means to be regulated as a lawyer, the distinction between legal advice and business advice, liability for legal information services and templates, lawyers' MS Word and typewriters, and finally how lawyers can adapt to change while bearing in mind their professional obligations, including the possibilities of practicing law differently.

​Till next time!

On the speaker panel for the first IMDA PIXEL-Asia Law Network dinner networking session in 2018 for legal issues across the digital creator and innovator communities.   Together with Mohan as moderator and Jeremiah, a fellow IP lawyer, we talked about intellectual property across various fields, including monetizing and protecting one's creations and innovations.  

Honoured to be part of the "panel of experts" (as The Straits Times called it) for the media launch in January of the Singapore Academy of Law's new Future Law Innovation Programme (FLIP).   Looking forward to being one of the pioneer participants in seeing if we can do anything about the "robot lawyers taking our lunch", as someone put it at the event.  

"Today, in Singapore, a new two-year pilot programme that aims to build a tech-driven law industry, otherwise know as legaltech, has been officially launched, half a year after it was unveiled. 

Called the Future Law Innovation Programme (FLIP), this initiative is run by the Singapore Academy of Law (SAL), a key legal industry development agency in the country. It will bring together legal professionals, tech entrepreneurs, government bodies and investors to incubate new legal service models as well as accelerate the widespread adoption of legaltech.

It will also look into helping lawyers navigate new — and grey — legal areas concerning new technologies, such as house-sharing and drones, for example. Also, if regulations impede new innovations, participants at FLIP will have the opportunity to tackle them together."

​From https://e27.co/lawyers-singapore-get-help-tech-disruption-new-programme-20180110/ and https://www.flip.org.sg/single-post/2018/01/16/Lawyers-in-Singapore-to-get-help-with-tech-disruption-with-innovation-programme
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​Find out more about the programme at the FLIP website at www.flip.org.sg/. 

Super excited to have been selected as the very first Expert-In-Residence at the Infocomm Media Development Authority's PIXEL initiative at one-north. As the pioneer lawyer invited into the PIXEL building filled with game developers, online content creators, VR/AR labs, and other innovators and media players, it's an objective to not just be the local 'legal guy', but to also go beyond that to mentor, educate and collaborate within the community, and help do more to grow the local Singapore media industry.  
 
p.s. I love that the building itself is pretty cool, with varied spaces for events, prototyping, and content creation (including sets that look like a kopitiam, a train carriage and ... a bar).  Check out this article about the place.

Do ping me if you expect to be around there, or in Block71  or Fusionopolis.

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Was quoted on the law in Singapore in The Sunday Times' feature yesterday on loot boxes : "Loot boxes in video games: Cool rewards or gambling trap?, 10 December 2017" : 

'Loot box mechanisms, while having elements of chance and items of value, usually do not allow users to cash out. So, they are most likely exempt from the Act, said lawyer Adrian Kwong, managing director of Consigclear, which has a strong focus in video gaming and entertainment law.
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Still, "it is also worth noting that the Act is expressly intended to prevent the games engendering crime and social order issues in Singapore, as well as help protect the young and vulnerable", said Mr Kwong.

"If complaints are received that the young are being exploited, for example by overspending on loot boxes or becoming addicted... the authorities may consider a particular game as objectionable."'

If you were interested in understanding more about the Remote Gambling Act, applied to loot boxes, lucky boxes, and the like in video games, do read on.