Mishcon de Reya announces esports podcast with ESI
Welcome to the Esports Insider podcast in partnership with Mishcon de Reya
[Music]
Ollie
Welcome to the Esports Insider podcast in partnership with Mishcon de Reya. I am your host Ollie and I am joined by three wonderful guests this afternoon. On my right Mr Sujoy Roy.
Sujoy
Hi Ollie. Good to be here.
Ollie
So Sujoy is of course from Luckbox. We are also joined by Filip.
Filip
Thank you very much, good to be here.
Ollie
Filip joins us from Unibet and of course last but very not least, Mr Nick Nockton from Mishcon de Reya.
Nick
Hi. Hi Ollie.
Ollie
Very good to have you on the panel and you might have guessed here from the podcast guests that the topic of the day will be gambling so we are going to discuss the sponsorship opportunity and the benefits that the industry can bring to Esports because as we know in the past there has been quite the tumultuous relationship between gambling and Esports so I guess from the operator side, from both Luckbox and Unibet, you guys are quite heavily involved in thing, Luckbox being a dedicated platform and Unibet recently getting involved in quite a big way with Astralis on a global level. So kind of why Esports? Why gambling in Esports and why is it a good match for each other?
Filip
I can start there. I think, I mean me personally I love Esports and that’s why I am so glad I can do… be able to perform a passion from an operator point of view as well but I think operators have looked at Esports for quite some time now, going back a few years we saw the whole skin gambling incidents which might err… have been not too good for the industry. I think betting took a beating back then but I think since then we have moved into this period of more professionals within Esports and not only the teams but also you know the integrity and all those issues that brings with it. So I think for us, Unibet reaching a younger audience, a new audience, that maybe we don’t touch upon with our regular sports book offerings, I think that’s the main reasons for us.
Sujoy
Well it’s different for me of course from Luckbox because don’t ask me why Esports, I am an Esports person. You could ask me why, why did I come into gambling, it is like the opposite question but in terms of why, why does Luckbox exist, it’s you know, there’s an opportunity here to build a really good product for Esports because its new territory and I see lots of benefits for gambling and how it can effect Esports and what it can do to the industry. That’s why I joined Luckbox but obviously I go back for 20 years in Esports.
Nick
A true veteran.
Sujoy
From the becoming a pro-gamer so long ago to seeing where we are now, there’s been a lot of progression and I am, you know, I am quite glad I am still in the middle of it.
Ollie
Yeah and I mean Nick, from your perspective have you seen a change in perception from those incumbent in the gambling industry or was it kind of alarm bells around the era of skin betting and when that was all going off?
Nick
Well there was certainly alarm bells around the era of skin betting but that was mostly from I think publishers and others in the Esports industry who saw it as a challenge, as a reputational issue for the growing industry. The gambling industry has been very interested in Esports for a long time but going back 2 or 3 years certainly longer, there was a problem with being comfortable about risk management, pricing the events and really understanding the industry and the events. Also being concerned about the integrity of them but there were some, some companies that got in quite early and most recently you know, as the Esports industry has become more professionalised and more matured as Filip has said, the larger names are getting comfortable with it and also I think they see it, they realise that fundamentally there is not a material difference between Esports as an event, as the betting event and traditional sports. You know obviously there are significant differences in they are organised but ultimately there isn’t a significant difference provided you have the market intelligence.
Filip
I agree.
Sujoy
And Ollie you said it was a fraught relationship but you know the skin betting incidents what that actually highlights is the fact that it needs to be done in the right way.
Filip
Yeah.
Sujoy
And that is one of the reasons we exist and I am sure it is one of the reasons why people like Unibet want to get involved is because it has been done the wrong way for so many…
Filip
Exactly.
Ollie
Yeah exactly.
Sujoy
…so long that you know, the Esports fans don’t have a base line of what’s betting, what should it look like. They are not used to this world. We need to introduce them to it in the right way rather than people ripping them off with, with unlicensed products or you know, going through all the problems that they’ve had, there is a better way of doing it.
Filip
I totally agree with you and I think Esports betting can be done in a safe, fun, regulated environments and that’s you know, the reasons we see more and more big operators coming into Esports now.
Ollie
Yeah. From an opportunistic perspective sort of when you tap into Esports it kind of represents very similar to a lot of the traditional sports property and I guess when you look at the premier league if you, if you sponsored a premier league team you do get true global exposure but say you guys have gone in with Astralis or Counterstrike and I mean with Luckbox partnering with Redeye he is well known across multiple Esports titles, across multiple jurisdictions. Is there kind of extra value for people involved in the gambling industry by looking to Esports? And how, like in terms of your sponsorship activations, how do you see them developing and are we going to see more companies in the space getting involved in that way?
Filip
I think so and I think, I think there is a lot of value this company can bring to Esports community in terms of content and your innovative ways of doing stuff. Like all the learnings we’ve got in from regular sports we can definitely bring in to Esports and help you know, bring that stability and growth even further to the scene so that’s definitely something yeah. I think yeah.
Sujoy
And for me obviously we are 100% Esports anyway so it’s a different question but I, as an Esports person coming in to this I appreciate that this is a revenue source for Esports. This is a method to generate money especially when everyone is watching it on free streams. There’s, I mean there is every so often there is a pay-per-view something like that but generally people tune into Twitch and they watch it for free. Right there has to be somewhere where revenue is generated and gambling is one of them and if that money is ploughed back into the industry for me, that’s a great thing. It means that teams can get sponsors like Astralis can be supported to do what they do. For us, you know obviously we love having Redeye on our team as brand ambassador because he is generally the first person you see when you tune in to a stream it’s like ‘oh look there’s our guy', he’s the first face you see when the stream turns on. It is obviously great value for us because we want to show people how betting can be done the right way and we want to be out there so it is very valuable for us to have someone like Redeye on our team.
Ollie
Nick with that, with the challenges of these teams going across multiple jurisdictions and competing across the world, we have seen, we have seen across traditional sports kind of challenges to gambling sponsorship and new alcohol sponsorship, anything that’s potentially considered a bit taboo. With these guys going competing across the world, is there potential challenges that these guys are going to face with their sponsorships. Is there, like, does the gambling industry have to be considerate of where they are targeting?
Nick
They most certainly do but the gambling industry in particular the- those who have been operating for longer, like Unibet but I know Sujoy is becoming used to this through, through Luckbox as well, whilst the industry is completely global the law generally and regulation as well is generally jurisdiction specific and even within the European Union there is no, there is no internal market for gambling so absolutely you have to be sensitive to the geographic restrictions about where you can accept bets from but also and I think this is the more interesting question from- for today’s discussion, where you know, will you run into and offend advertising regulations by carrying sponsorship logos or by you know sponsoring an event or having you know, on players merchandise. Now generally speaking that’s going to be less likely but I mean there is no doubt and we have seen it in the poker industry in particular that certainly can be the case. It is a little like Formula 1 racing with their tobacco sponsorship. There will be events at which irrespective of what the publisher thinks, the law of the… the local law requires you to blank out the gambling sponsorship. So it is certainly something that they need to be mindful of. It is something that changes regularly as countries regulate and change their laws but the gambling industry is very, very good at that kind of thing. Very good at it. You know it is a highly regulated industry. A lot of these companies are carrying multiple licenses, they have very large compliance teams, they can deal with it even though you know, we would all prefer it to be rather more rationalised it isn’t and it isn’t likely to get any easier.
Ollie
Yeah I am kind of interested in like exploring exactly what you said, I mean these guys have huge compliance teams but at the same time Esports kind of poses a new challenge because also say you guys obviously trust Astralis which are just Counterstrike so you are going for a fanatic who has spread across so many different Esports, some who don’t take like if you look at your Rye games at the moment, they don’t actually allow in their rule set of competition to have gambling sponsors on show. You guys obviously you take, you take wagers on those events anyway because there is an appetite to bet on them and there is no one stopping you from taking wagers there but do you see challenges from a gambling company side in compliance? Is that going to be an issue where gambling companies need to adjust and make sure, I mean obviously Luckbox was built that way up, but what are your views on that?
Filip
I think, I think as you said, it is already happening and it will continue to happen so I think I would invite the game publisher to have an open discussion about you know, gambling and IP. I definitely want to see that and I think as mentioned before, big trusted operators can come in to the space and bring with them a lot of integrity and maybe the publishers don’t have the knowledge about. So I think there is a mutual benefit to be had there with an open discussion between operators and publishers.
Nick
And in terms of doing a, you know, a sponsorship with a, with a group like Fanatic with multiple teams of multiple titles and obviously playing in multiple jurisdictions, that’s not unlike how the remote gambling business deals with its affiliates you know, they could address that through, through having policies and you know, perimeters within which they effectively give guidance and essentially take responsibility even though obviously there would probably need contractually to be some balance and also you know, you do have to be if you are in the team’s shoes, you have to be mindful that your players are carrying logos they may, if you are not careful, inadvertently break the law themselves so there are lots of things to consider. The interesting point which Filip has just brought… you know alluded to is, is can the gambling industry become accepted generally even by those publishers who are resistant to it and I think that’s a really interesting question. I'm sure that it will become far more acceptable as it becomes imbedded within the industry as jurisdictions where those, some of those publishers are more either base or more exposed, for example the US, become… have regulated gambling markets. I think it will certainly become in due course you know, the normality, the norm for these publishers. They won’t want to miss out.
Sujoy
And if you look at what’s happened in the past you can see why for example, why Valve are a bit hesitant about betting company because they’ve had the CS:GO skin scandal.
Nick
Yeah.
Sujoy
And Riot don’t want any of the shade from that, they’ve got good business model going but they are not, these industries are not built on gambling whereas sports has seen gambling for such a long time they understand how to do it and where it fits in. I think if something is going to evolve it is going to evolve over time as the publishers come round to saying okay, here’s a good way that it can be introduced without it being a scandal for them. And I think they are just being very cautious and I kinda of don’t blame them.
Nick
I don’t blame them absolutely.
Sujoy
But at the same time unless, unless they embrace it you are going to get all the black markets stuff…
Nick
Absolutely yeah.
Sujoy
…unlicensed, unlicensed people getting involved. It is important for them to say it is something that is happening, they have to embrace it and find out how to put gambling alongside their leagues and make it work properly in a responsible way and like you say, it’s gone on so long in sports there are, there are safeguards against the problems and so on.
Nick
There are and I think the publishers are the last people that actually need the money probably but, but you know, as you correctly say, there will be… there are peripheral you know industries growing up around, around these game titles and there is a significant risk that unlawful, unlicensed, unregulated gambling even not, you know, not nominally gambling so for example, you know, the skins betting issues, that was not on its face gambling but of course we know that it was as a matter of law, gambling and very dangerous and very harmful. So I think there is a serious risk but of course the really interesting point is there are, they don’t actually have to accept it. There may well be publishers that never accept it and that’s… so in that way it is slightly different so you look at, I suppose there isn’t analogy with, with the franchise sports model in the US, isn’t there, the NFL who are now embracing the possibility that regulated sports betting brings there but not all of those, not all of those sports are as quick to do so and that will be the case in Esports as well.
Ollie
Yeah I mean I think, I think you touched on the US there and that’s a very, very interesting market, especially from kind of a gambling operator’s perspective. I find it personally very kind odd the fact that Nevada is one of the leading regulatory bodies in the eyes of the igaming and the gambling industry yet the US was so slow with PASPA. Now PASPA is kind of… now PASPA appeal has come in and there is so much opportunity there. Obviously I think a lot of people thought it was a gold rush and you get in there really quickly and regulation would change but everything takes time. Do you think, I mean I would say that some of the people in here we’ve grown up with horse racing, you watch the Grand National every year, it’s very much imbedded and these industries greyhounds, darts, I mean I absolutely love them but they are kind of propped up almost by the gambling industry. Do you think we are going to see the widespread acceptance from people in the US and therefore what opportunity do you think that brings Esports?
Sujoy
Well I am the last person to comment because I am obviously not from a gambling background but I, yeah I don’t think it should be… I see the synergies but just from my experience our Board is full of people from Poker Stars, they have got good experience in trying to move into the USA and they are very cautious about what they say about it which makes me think it is not, you know, this is the reason why it has not suddenly exploded into the USA. There’s a lot of hurdles left.
Nick
There certainly are and whilst this podcast may be listened to on a later dates obviously, that on the day we are recording this it was only 24 hours ago that the Department of Justice in the US reversed an opinion they gave and have suggested that what’s a piece of Federal legislation may in fact stand in the way of a regulated gaming market in the US after all. Effectively they reversed a decision that they had published about 5 years ago which paved the way for regulated on line gaming. As it happens it doesn't, it shouldn’t make a difference to sports betting and betting potentially on Esports because that was, for reasons I don’t need to go into but that’s a highlight why the US is a tricky market, it’s taken a long time to get here, it’s a very fragmented market, you know fifty one States whatever it is, there’s Federal law, there’s a puritanical zeal about a lot of those jurisdictions and therefore within Congress and Senate it is difficult to get this kind of legislation through. There are very strong interest groups from the non-remote casino market you know, from Vegas. It is no wonder it has taken 20, 25 years. All my career people have been saying oh it is still about to happen.
Ollie
Yeah.
Nick
I was astonished when it did but you know, it’s… I think it’s sensible because they also had the largest unregulated betting market as far as I am aware – I mean we don’t really know what the position was in China – but for the last decade, 22 decades the sports betting market in the US has been massive, almost all untaxed and unregulated. It just was crazy so it makes absolute sense that they are doing it and in due course those industries that provide events on which that regulated market wishes to bet, can decide to embrace it to different degrees and I am sure that they will you know, to a large extent but as I say, before it’s entirely possible some of the titles will, because possibly they, they don’t see it as conducive to their demographic, they are concerned about the reputational issues, not so much integrity but, but gambling per se, largely because of demographic I think but broadly I think they will see it as an opportunity.
Ollie
Yeah I think I read the New Jersey Betting Handle since June was 1.14 billion dollars or something so it’s a huge, huge amount of money and a huge opportunity over there and I mean in terms, in terms of a sponsorship respective and Unibet and Astralis, when you went into your Astralis sponsorship obviously very, very big deal, what was the… what are the aims for Unibet’s partnership and is the US part of it, obviously Astralis the biggest Counterstrike team last year, unbelievable results but they are winning tournaments in the US, they are winning tournaments in Asia, they are winning tournaments everywhere. What are you guys looking to get out of it?
Filip
I think when we sat down and discussed we were going to find a team to sponsor I think the first thing we looked at was the organisation behind them and the professionalism of that organisation. Obviously Astralis is being owned by RFRSH, who has been in the industry for quite some time doing BLAST Pro as well, very knowledgeable, very professional. So basically we share the same values with Astralis when it comes to professionalism and vision and strategy and so forth. And then in terms of the global aspect as you mention, I think yes they are winning tournaments in the US but the viewers may not be all from the US. I think that’s an important factor to keep in mind, that there’s distinction between the physical viewers and the viewers on Twitch stream. So for us we see a lot of European viewers for instance which for us is the main markets we operate in.
Ollie
Yeah good one. Just a question to everyone, I mean how do you see- in a lot of industries gambling becomes almost part and parcel of an entertainment product and it really enhances, it is there to enhance the viewer experience. How do you see that working with the Esports industry and different titles? Do you see it as something that is really going to become imbedded as part of things in the future?
Sujoy
For me because I am a huge Esports fan, I know there are other people in here who are as well but I used to, I confess I used to bet on Data Lounge. I used to bet Good Cosmetics and it’s fun, it is genuinely, it’s nice invest, to be invested to the result of a game and sometimes maybe you are not a fan of this team or that team but after you’ve got a bet on the game it changes the dynamic…
Filip
Yeah absolutely.
Sujoy
…how you watch that and it suddenly becomes very dramatic and it is like so much fun watching it, you’re cheering, you’ve got emotions going up and down. It actually enhances the experience for me. You know, and that’s the experience we want to give to our customers as well, it’s this like really being part of this and living, living the games as they are going on. It’s very… it does amazing things to the viewing experience for sure.
Filip
100% agree with you. I think speaking as an Esports fan and Esports punter I agree with you. It takes, it elevates the game you are watching to another level and brings that more fun aspect into it.
Sujoy
But this is one of the problems with Esports is that the teams are very international and if you are a newcomer to Esports it is like well do I support this team, do I support this team, well Astralis are number 1 for example so maybe they are getting fans but why would you then support Astralis over Fanatic if you weren’t Danish for example.
[Laughter]
Filip
Swedish for example.
[Laugher]
Sujoy
Yeah so you know, you sometimes need a buy in, a little bit of an edge to say these are my guys and when I’m watching this game I am cheering for Team 1 versus Team 2.
Filip
Absolutely. No you can’t compare it to football for instance. You shout for your home town team, it’s not the same in Esports. So you need that edge.
Ollie
I argue you that one, I think there’s plenty of Manchester United fans in London but yeah definitely I kind of agree there’s a lot less team loyalty than there is player loyalty – does that pose a risk? Does that pose a risk to operators? You go and sponsor a big team and then next year the meta changes and nodes to the meta changes in Legal Legends and suddenly your team is actually terrible from a sponsorship perspective. Do you think that is going to sting operators? Do you think that will put them off or is the prospect of gambling and how big the handle can be enough to keep people coming back?
Filip
I think… I mean it is always going to be a risk. No one can say 100% that won’t happen but at the same time I think Esports have reached a level of you know, stability now, we don’t see players jumping around to different teams because of salaries. We see a stability in the Esports and I think coming in as a sponsor as well you bring some cash flow to the team securing that team for the next few years.
Sujoy
And it hasn’t been as bad as you make out actually. I mean I think you see the same in sports, teams go up and down all the time, players are transferred but organisations that are good tend to keep attracting good players and you know, they’ve got a good infrastructure to make the team work even if players change. It has developed a long way. We are already getting to that stage where it’s pretty stable. I mean this is why you know, you might come in and sponsor a team because you have confidence that it’s going to work out in the long-term.
Filip
Yeah, yeah absolutely. Yeah you have to otherwise you wouldn’t do it.
Ollie
Yeah and now I am going to kind of round off this cracking episode of the podcast with I want you to make your outlandish prediction relating to gambling in Esports. So let’s look 5 years down the line which in Esports is probably about a 100 in kind of real terms, but what do you see happening? How do you… what’s your outlandish prediction 5 years’ time, Sujoy let’s go?
Sujoy
Why are you looking at me first?
Ollie
You’re kicking us off, let’s go.
Sujoy
That’s a tricky one. I mean if you want something outlandish it is literally Wright and Blizzard embracing the gambling as part of, of the leagues that they build but yeah I, I mean it’s hard for me to say. I am new to gambling, come on let someone else go first.
Filip
Yeah I can go. I think, I think the trend we see now especially on the gambling side, we see a lot of gamification, you know going towards that. I think in 5 years’ time we are going to see less of that and coming back to more simplicity of it because you want to enjoy the purity of the game. You will still want to place a bet but I think we are going to see the games being so immersed that you don’t want to take away that, you know, gamification aspect of that. That’s what I think.
Nick
That’s interesting. I am sure that’s right, the gambling sector has been desperately innovating to try to become in itself more immersive and entertaining whereas the opportunity that Esports offers is that the underlying product itself is pure entertainment.
Filip
Exactly.
Nick
That’s a really interesting perspective. I think you must be right.
Filip
So me as a…
Nick
I can’t bet on it.
Filip
So me as a punter I want to keep it as simple as possible. I still want you know, fun and entertaining and some informative statistics so I can lay my bet but apart from that I want to keep a clean side and the works to be smooth and working.
Ollie
Yeah I mean I think last year I saw the first like completely whacky product which was someone that as a PUBG game happened he had built a slot machine that actually took real time what was happening in a PUBG game and applied it to kind of a bingo mechanic and I thought ‘whoa, whoa, whoa, we’re jumping a 100 light years ahead here’.
Filip
Yeah, that’s what I am saying, you might as well go into PUBG and play you know.
Ollie
Yeah, yeah. I mean I kind of agree with you, I want to see it as a nice clean slate and yeah I think that’s where we’ll go. I think your prediction that Blizzard and Wright, I think that’s probably the most outlandish you can actually get.
Sujoy
Well I am looking more like a few months ahead to when we launch. I am not looking 5 years, I’ve got too much on my mind sorry.
Filip
And I think that might happen too. I would like to see that happen at least so we can work together as partners with us.
Ollie
Yeah awesome well I would like to thank you, each and every one of you for joining me on today’s podcast, the inaugural ESI podcast. Three wonderful guests discussing the gambling issue and I hope you found it very entertaining to all of our listeners and we will be back very shortly with some more cracking content. Thank you very much also to our partners Mishcon de Reya who have been very supportive of this ESI podcast.