ESports Side-Betting Could Cause Regulatory Headache for Casinos Hosting Events

Posted on: July 24, 2017, 05:00h. 

Last updated on: July 24, 2017, 05:00h.

ESports events are quickly growing into a cause celebre for the Las Vegas casino industry. And no surprise that these skill-based competitions, as they evolve, go hand-in-hand with a desire to bet on their outcomes.

Esports tournament casino betting
The fighting games tournament Evo, held earlier this month at Mandalay Bay and at various Las Vegas casinos since 2005, has a culture of casual wagering that stands to put some licensees at risk of gaming violations. (Image: Carlton Beener / Evo Championship Series)

The casino industry is eager to embrace competitive video gaming, believing it provides a crucial platform for connecting with the hard-to-reach millennial generation. And the dynamics of eSports have many academics and industry insiders believing these pursuits will have a great influence on casino games in the future.

However, as events surrounding eSports become more popular, some people are learning about a culture of players wanting to bet on these competitive matches in ways that potentially cause concern for gaming regulators.

Las Vegas already has its own eSports arena, the Neonopolis in downtown Vegas. MGM Resorts, meanwhile, is planning another, bigger venue near the Luxor on the Strip. Until then, Level Up at the MGM Grand represents the casino giant’s efforts to create a millennial playground, in the form of a 12,000-square-foot arcade for skill-based gaming.

“Money Match” Culture

It’s perhaps not surprising that competitive events such as Evo, the Evolution Championship Series, which has been held in Las Vegas casinos since 2005, inspire people to want to play for more than pride.

Gamers at Evo like to ramp up the competitiveness with so-called “money matches,” challenging each other to put their money where their mouth is. Gamers contend this is usually simple social betting, casual wagers among friends for $5 or $10.

But given the enthusiasm for wagering, and the amount of money currently being poured into the eSports industry, it’s not the beyond the realm of possibility that someone could expand the operation into something far larger by running an illegal book of the games.

“Generally speaking, it is not illegal to wager socially, unless somebody is taking a cut,” AG Burnett, chairman of the Nevada Gaming Control Board (GCB) told the Las Vegas Review-Journal this week.

Regulating ESports

Burnett said the board would initiate discussions between casinos and tournament organizers to make sure everyone was aware of what is and is not allowed in terms of betting, and what the expectations are of casino licensees.

“If anything inappropriate is going on, then we will certainly delve into that very deeply,” he said.

Sam McMullen, CEO and co-founder of FiveGen, a technology and infrastructure security firm that he claims to be working with GCB to develop eSports regulations.

“Regardless of type, both social and informal, money matching and internationally formal bookmaking is happening,” McMullen said. However, where some people see this as a threat, McMullen recognizes it as an opportunity.

“This wagering presents a huge opportunity for Nevada,” he said. “if we can get our arms around how to make it technologically viable and standardized to be available to a public that clearly wants us to create a way for it to be legal and possible.”