{"id":882,"date":"2021-11-11T14:44:07","date_gmt":"2021-11-11T11:44:07","guid":{"rendered":"http:\/\/padilla.law\/?p=882"},"modified":"2021-11-11T20:32:38","modified_gmt":"2021-11-11T17:32:38","slug":"are-real-money-video-game-tournaments-legal","status":"publish","type":"post","link":"https:\/\/padilla.law\/es\/articles\/are-real-money-video-game-tournaments-legal\/","title":{"rendered":"Are Real-Money Video Game Tournaments Legal?"},"content":{"rendered":"

By Dan Artaev<\/a><\/p>\n\n\n\n

Video games are quintessential contests of skill\nand online multiplayer modes are a must in most modern video games. And\nyes, playing skill video games for real money prizes is legal in the\nmajority of U.S. states. Some of the most popular video games (Call of Duty,\nFortnite, Magic: Arena, and others) frequently feature official in-game\ntournaments with real-money prizes for the top finishers. Fueled by the global\npopularity of esports, there is also a growing number of third-party esports\ntournament sites and apps. These third-party offerings are essentially\non-demand, which means that there are always head-to-head challenges waiting\nand frequent \u201ccash cups\u201d with winners able to win a hundred\ndollars or even more.<\/p>\n\n\n\n

Real-money game tournaments and contests serve\nas a more casual alternative to professional esports. Not everyone has the time\n(or the reflexes) to go pro or even compete at the collegiate level. But, you\nmay be skilled enough to dominate your local group of friends at Call of\nDuty or FIFA and there are plenty of offerings to let you win real money\nprizes against online opponents. Some of the most innovative companies even\nintegrate streaming (for example through Twitch) to add an exciting \u201caudience\u201d\nelement to real money play. Anyone can feel like an esports pro. There is also\na growing opportunity for market crossover, with streamers getting involved in\nreal-money play and adding a whole new dimension to their entertainment potential,\naudience, and branding opportunities.<\/p>\n\n\n\n

What kinds of legal issues will a contest or tournament organizer\/developer encounter? As with any business, there are several distinct legal areas in play.<\/p>\n\n\n\n

1. Esports competitions or tournaments are not expressly regulated or prohibited under U.S. federal or state law.<\/strong><\/p>\n\n\n\n

First, from a government regulation perspective,\nno states expressly prohibit esports or video game tournaments. However, there\nare several jurisdictions that prohibit any sort of real-money gaming<\/a>. This is the case even\nif the game involves a pure contest of skill (even offline, like a hole-in-one\ncontest). Accordingly, tournament organizers and app developers stay away from\nthose restrictive jurisdictions.<\/p>\n\n\n\n

In the remaining states, game contests,\ntournaments, and esports are not licensed under any sort of \u201cgambling\u201d or \u201cfantasy sports\u201d\nregulatory scheme. The largely unregulated market means that there are a number\nof service providers out there that disagree on where their product can be\noffered. Some are more conservative than others, but there is not a definitive\nlist of where gaming competitions are legal or illegal. At least one state \u2013 Nevada \u2013 passed\nlegislation to create an esports advisory board (within its Gaming Commission),\nto recommend best practices for maintaining integrity of esports competitions\nand related betting. According to Nevada lawmakers, they recognize the value in\nthe esports competition industry and want to ensure Nevada remains an\nattractive investment environment for this burgeoning industry. At this time,\nthe potential advisory committee is the closest any state has come to any sort\nof esports-specific legislation.<\/p>\n\n\n\n

A lot depends on the specific competition and tournament model, as well as the types of games being played. For instance, are shuffled cards involved (Magic: The Gathering)? Or some other element of randomness (like team or opponent selection)? Are bots or AI players involved? How do all these elements interact and do they introduce a significant chance element that may affect the outcome? Does the randomness element render the game illegal \u201cgambling\u201d?<\/p>\n\n\n\n

2. Third-party video game websites and apps implicate the intellectual property rights of the underlying game\u2019s developers and may be subject to DMCA takedown notices or federal trademark lawsuits.<\/strong><\/p>\n\n\n\n

Second, esports competitions and tournaments do\nimplicate intellectual property rights, specifically the rights of the game\ndevelopers. A game\u2019s developer (like Blizzard, Riot, or\nEpic) owns the copyrights in its games and underlying code. Third-party apps\nand websites operate without any sort of license from the developers, which may\nbe a violation of copyright or trademark law. Disclaimers alone may not be\nenough \u2013 using game imagery, logos, or even gameplay footage may constitute\ncopyright or trademark infringement. A player or streamer may be protected by\nthe \u201cfair use\u201d copyright law exception, but\na company that organizes and monetizes game tournaments is unlikely to prevail\non this argument. At the same time, a properly run game tournament organizer\nmay not have sufficient interaction with the game itself to violate IP rights.\nAfter all, the players are the ones playing. Each situation is highly\nfact-specific and there is certainly no bright line rule.<\/p>\n\n\n\n

As real-money video game tournaments become more widespread, expect to see pushback from the game studios. At least one studio \u2013 Epic \u2013 has announced an aggressive stance towards third-party platforms that facilitate playing Epic\u2019s games for real-money prizes (particularly Fortnite). However, as of the date of this article, no lawsuits have been filed.<\/p>\n\n\n\n

3. Combining real-money tournaments with streaming is an attractive business model, but may involve complex licensing and contract issues.<\/strong><\/p>\n\n\n\n

Third, streaming tournaments and competitions,\nas well as partnering with known streamers, involves a number of contract law\nand licensing issues. Each streaming service has its own set of terms. Players\n(and organizers) streaming real-money game content must ensure that they are\ncompliant with the terms or risk being banned from the platform. Further, who\nowns the streaming content? Normally, the creator has the intellectual property\nrights to their own content, but it is not so clear-cut when streaming a\ntournament or other organized contest. Tournament organizers should ensure that\nrights and expectations are clear from the outset, especially if a well-known\nesports streamer or player is involved. If the streamer is granting the\norganizer a license to showcase their gameplay, the license should at a minimum\nbe in writing. Any royalties, cross-promotions, and sponsorships likewise need\nto be negotiated ahead of time. Even the best intentioned relationships go awry\nwhen money becomes involved.<\/p>","protected":false},"excerpt":{"rendered":"

By Dan Artaev Video games are quintessential contests of skill and online multiplayer modes are a must in most modern video games. And yes, playing skill video games for real money prizes is legal in the majority of U.S. states. Some of the most popular video games (Call of Duty, Fortnite, Magic: Arena, and others) frequently feature […]<\/p>","protected":false},"author":1,"featured_media":885,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[],"yoast_head":"\nAre Real-Money Video Game Tournaments Legal? - Padilla Law<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/padilla.law\/es\/articles\/are-real-money-video-game-tournaments-legal\/\" \/>\n<meta property=\"og:locale\" content=\"es_MX\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Are Real-Money Video Game Tournaments Legal? - Padilla Law\" \/>\n<meta property=\"og:description\" content=\"By Dan Artaev Video games are quintessential contests of skill and online multiplayer modes are a must in most modern video games. 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