Is eSports Betting Legal?

Online gambling can be a tricky field to walk—more so if you’re betting on eSports. The eSports betting world is still mostly uncharted territory, not least of all because of tricky legal questions and issues of jurisdiction. If you’re looking to place some bets on your favorite eSports teams, you might be wondering if that’s even allowed. In this article, we delve into that question, and it turns out the answers aren’t as clear-cut as you’d expect.

Before anything else, though, we’d like to stress that it never pays to skirt the law. If you’re in an area where eSports betting isn’t legal, tough luck. Instead of risking underground betting markets, you’re better off looking for legitimate alternatives, even if that’s just a $5 wager against your best friend on the next big League of Legends match.

Can You Bet on eSports?

The short answer: it depends.

Nobody’s stopping you from putting up informal wagers against your neighborhood pals, for example. But when it comes to formal systems of betting, complete with calculated sportsbooks and hundreds, if not thousands, of fellow bettors, the answer largely depends on where you live.

Many countries impose restrictions on gambling, especially the online kind. Much of eSports takes place in virtual spheres, and potential bettors are also most likely to place wagers via online channels. In the eyes of many governments, then, betting activities related to eSports still fall under the “online gambling” umbrella. Unfortunately, there are countries like the US with laws that explicitly prevent operators based in other countries from offering online gambling services to their residents.

How come there are still eSports betting websites in countries like the US?

Most of the time, these providers circumvent online gambling restrictions in one of 3 ways:

1. For countries where prohibitions only apply to operators based in other territories, it’s simple: the company operates directly in that country and registers for the appropriate licenses and certifications.
2. They use virtual currencies or digital assets. These can range from in-game skins and items (giving rise to the “skin betting” economy) to cryptocurrencies that can’t be exchanged for cash. The key here is that any participants don’t bet real money, so these activities don’t fall within the technical definition of “gambling” set out in most laws. If you’d like to know more, check out our round-up of promising eSports cryptocurrencies!
3. They use fantasy drafts and leagues. The use of “fantasy” systems, where bettors create custom teams from their preferred players, adds a necessary layer of informality. Through the fantasy system, people aren’t betting directly on any teams or matches; instead, they’re reaping rewards based on the performance of their preferred players.

Whichever umbrella your preferred operator falls under, always make sure they have the necessary licenses and certifications for your country.

IEM San Jose 2014. Courtesy of Intel.

Where Is eSports Betting Legal?

You can find regulated betting markets in over 100 countries around the world, including some in the EU. Here are some of the top territories where you can bet on eSports without worrying about breaking the law:

• The United Kingdom
• Australia
• Spain
• Taiwan
• Macau
• Korea
• Japan

Of course, that doesn’t mean you shouldn’t verify the trustworthiness of your selected betting operator. Even if you’re in a country where eSports betting is legal, you should always validate your betting operator’s licenses and certifications. It takes just a few minutes to check gaming control boards and lists of approved or registered gambling operators. You won’t regret taking the time when you avoid giving your banking details to a shady company!

Some countries are more forthcoming with operator details and information than others. For example, the UK Gambling Commission publishes a white-list of companies that meet stringent operating standards. The Malta Gaming Authority has a similar list of licensed entities. With many online sportsbook and gambling companies operating out of Malta, it’s worth checking to see if your betting website is on their list.

The Changing US Landscape

Thanks to the US’ federal system, the legal ground for eSports is a bit more complicated than usual. For starters, there are three states where online gambling is legal: Nevada, New Jersey, and Delaware. However, prior to 2019, there were still two major laws that prevented eSports operators from simply relocating to these states and serving customers from there.

First, there was the federal restriction on sports gambling. Since eSports is generally seen as falling under the umbrella of, well, sports, this restriction hobbled the development of any regulatory scaffolding that could have supported reliable, transparent eSports betting markets.

Recently, however, the US Supreme Court struck down this restriction. Many states are now working to pass laws allowing sports gambling, with some, like New Jersey, Pennsylvania, and Mississippi, already having approved their versions. With the Supreme Court ruling and these supporting state-by-state laws, eSports operators can now legally offer direct, single-match betting, as well as accept cash for wagers. This eliminates the need for alternative systems like fantasy drafts or virtual currencies. Of course, eSports operators can, and likely will, keep using these systems; but now they can also take straight-up cash wagers on eSports tournaments, too.

There’s another law that’s still limiting eSports betting activities in the US, though, and it’s called the Wire Act. Simply put, this law prohibits people from betting across state lines. An operator can, for example, legally run in New Jersey, and NJ residents can legally place bets on their preferred eSports matches. But if somebody from, say, New York places a wager through that NJ betting company, they’d be running afoul of the Wire Act.

There’s no telling when the Wire Act will come under Supreme Court consideration, so country-wide eSports betting networks are still out of the question for the US. With the recent ruling on sports gambling, however, many US-based operators seem eager to build thriving eSports betting markets within various states.

StarCraft champion Bomber. Image courtesy of ESPN.

Can You Stake Your Money on eSports Betting?

The world of eSports betting is still new and largely uncharted. Laws can differ wildly across countries, and potential bettors would do well to check the particulars for their jurisdiction.

Still, eSports betting platforms and networks are on the rise, and recent news from countries like the US indicate that some of the tricky legal issues that have hampered eSports gambling are on track to be resolved. Many eSports bettors have thus far been working in informal, often shady, networks rife with fraud and scams, so the introduction of clearer regulations and legal support promises only good things for this growing industry.

Now, and in the near future, it’s getting easier and easier to take a chance on eSports betting. Why not check out the web’s top eSports betting sites and give it a shot?