Category: eSports

Esports gets its first big contract lawsuit

Esports has its first big contractual lawsuit as Turner Tenney, also known as “Tfue” sued Faze Clan Inc. (“Faze Clan”) earlier this month in the Superior Court of the State of California.  The lawsuit underscores an issue in the nascent sport.

The Complaint states that Tfue is a 21 year old professional gamer and content creator/streamer.  His videos are viewed by millions, sponsors are willing to pay for Tfue to perform in and create videos that will, at least in part, promote their goods, services and brands.

Gaze Clan is an esports entertainment company according to Tfue.  He signed a “Gamer Agreement” with Faze Clan when he was 20 and describes the contract as “grossly oppressive, onerous and one-sided.  Notably, Tfue underscores that Faze Clan was to receive up to 80% of the revenue paid by third-parties for his services.

Tfue also claims that they violate California’s Talent Agency Act as he claims that it protects artists and Faze Clan is an unlicensed talent agency operating within the state.

In addition to the alleged illegal contract and illegal procurement of employment, Tfue claims that it has diverted money owed to him for themselves.

Tfue claims that the Gamer Agreement had an initial term of six months and would automatically be extended for an additional thirty-six months if certain conditions were met.  As part of the lawsuit, he is requesting termination of his Gamer Agreement.

Despite letters from his attorney regarding a breach of the Gamer Agreement, Faze Clan, denied that it had breached the agreement.

In addition, Tfue claimed certain sections of the contract were in violation of state law including an exclusive “Matching Right” section

He also claims that Faze Clan passed up on a sponsorship deal for him due to a conflict the company had with one of its competitors.

This lawsuit is unique in esports as there has been few, if any, contractual disputes that have gone this far.  FazeClan claimed that it would release the full contract so that the public can see the terms.  This seems like a very good PR move but bad litigation strategy.

Faze Clan recently released this video which responds to allegations in the lawsuit and give some context to the situation.  In it, they state that Tfue had previously signed a Gamer Agreement with another organization and had attorney to look over his contract.  Moreover, they believe that he was set on starting his own organization and was looking for a way out.

This will certainly a lawsuit to watch.  Esports is evolving and contractual disputes are bound to occur as players become more savvy about what they are signing.

“Skins” lawsuit filed by owners of Tribal Casino go after Valve

A “skins gambling” lawsuit was filed in Washington State last month by a Native American Tribe that owns the Quinault Beach Resort and Casino citing that Valve’s CS:GO use of skins is illegal gambling. The Quinault Nation argues that Valve’s video game, Counter Strike: Global Offensive, did not have a license to operate, facilitate or otherwise engage in any form of gambling. The lawsuit was filed in Grays Harbor County, Washington.

Quinault Nation is a federally recognized sovereign Indian Nation consisting of Quinault and Queets tribes and descendants of five other coastal tribes. It owns and operates and Indian gaming casino licensed by Washington state and regulated by the Washington Gaming Commission.

Valve is a Bellevue-based video game and online content platform company. “Skins,” as defined by the lawsuit are primary currency used “by illegal, unregulated, and unlicensed online gambling website.” They are “add-ons” to enhance the video game experience. They can be bigger guns, different outfits and more. These “skins” must be purchased with money and are not included as part of buying the video game.

According to the lawsuit, Valve was complicit with the “skins” economy as it offered a “key” for $2.50 to access virtual items that were worth much more than the value of the token. It also “allowed gambling websites to use Valve accounts on Valve’s servers and Valve’s computers to effectuate gambling transactions.”

Below is an example that was embedded in the lawsuit.

The Quinault Nation is requesting a court order requiring Valve to stop offering crate opening online slot machine gaming until a time in which the Washington Gaming Commission can examine it to determine if it requires a license.

The lawsuit builds on previous litigation which included an attempt to bring a class-action lawsuit against Valve but those lawsuits were sent to arbitration as individual cases pursuant to a class action wavier and arbitration clause in Valve’s Subscriber Agreement.

Here, The Quinault Nation has an interest in Valve’s alleged “skins” gaming as they believe it takes away from its own legal and licensed gambling enterprise. They believe that Valve is engaging in unfair competition with the legally licensed, regulated gambling. Notably, it explains that this is due to neither Valve or internet gambling sites using Valve’s virtual items having to abide by gaming laws and regulations, and consumers and the plaintiffs being harmed as a result. It cites a consumer protection component as well since there are scammers out there that are not regulated that may sell fraudulent items on web sites.

University of Washington announces launch of new esports arena on campus

The University of Washington is the latest college to cater to the burgeoning esports industry.  It was announced on Tuesday that the University of Washington would furnish its student activities building with a space for esports events.

It will make the UW the largest public, higher education institution in the nation and the first university in the state of Washington to have a dedicated esports arena.

The 1,000 square foot gaming center is set to open this spring and will be the center for casual and competitive gaming and virtual reality.  A portion of the UW’s Student Technology Fee will fund this arena.

The arena will bring together a community of gamers as well as an opportunity for research in game development and tools for expanding broadcast opportunities according to former Washington Gaming Association President Kevin Zhou and UW alum.

With the expansion of the sport, esports scholarships are being offered by universities as the industry is growing at a rapid rate.

Students will be $3.50 an hour or $30 for 10 hours; UW faculty and staff will pay $4.50 per hour or $40 for $10 hours.  The general public will pay $6 an hour.

The move shows the growing interest in video gaming (i.e., esports).  More than just a hobby, like the bowling alley that used to be in the basement of the HUB, esports is now offering more.  The arena will offer top of the line gaming equipment as well as virtual reality.  It should be a real interesting place to go if this is your interest.

MLS latest to venture into esports

Major League Soccer is the latest to venture into esports.  It was announced that the MLS is partnering with EA Sports to create a competitive league around FIFA 18.

Last year, it was announced an eLeague featuring several cities with NBA teams centered around the NBA2K video game franchise.  The NFL has worked with the Madden franchise in offering tournaments around the football game.

19 MLS teams will participate with each club selecting its own player from its region.  It will debut in April at a gaming festival in Boston.

The league will be known as eMLS.

Jack in the Box signs on as esports primary sponsor for Dallas Overwatch team

Fast Food chain Jack in the Box announced a “multiyear, multimillion-dollar” sponsorship deal to display its logo on jerseys worn by the Dallas Fuel of the Overwatch League.

The Fuel is owned by Team Envy and is one of 12 global franchises that’ll compete in the inaugural season of the Overwatch league starting in December.  The deal also includes Team Envy’s Call of Duty team.

Jack in the Box sees esports as a way to reach a hard-to-reach demo according to the company.  The signing make the Fuel the first Overwatch team to sign a primary sponsor.

Microsoft stores to host League of Legends tournaments

Late last month Microsoft announced that it will turn its physical stores into esports gaming arenas.  The move intends to bring players into its stores and will likely help enhance retail.

Partnering with ASUS Republic of Gamers and HyperX, it will host weekly League of Legends events across the U.S., Canada, Puerto Rico and Australia.

Via Microsoft

Touted as ROG Arena, players of all levels will get a chance to play League Unlocked, a premium experience for official League of Legends partners and live events.

The move acknowledges the popularity of esports and hopes to capitalize on bringing together a community of players.  Obviously, having these tournaments in the Microsoft store provides retail opportunities for the company.  An interesting idea that will likely foster a relationship between the company and the burgeoning rise of esports across the world.

Twitch announces plan for users to earn money

Live video gaming site Twitch revealed new ways for its users to monetize through the use of its site.

On Wednesday, it announced 20 new extensions to help content creators increase engagement and interaction.  “Twitch Extensions” allows users to customize their channel pages with interactive features, including polls, leaderboards, tickers, interactive game information, virtual pets among other things.  While the extensions will facilitate engagement, it will also help streamers generate additional revenue.

An extension called “Gear on Amazon” lets Twitch creators show off their favorite Amazon products.  Similar to clicking through an Amazon Associates web site, if a viewer makes a purchase through the site, the creator will earn a commission. Even though Amazon.com owns Twitch, it’s the first time that the site users have been invited to join the program.

In addition, Twitch is opening up the extension platform broadly to third-party developers.

The move is another sign of the continued monetization of esports.  While Twitch is expanding into to other areas, gaming is at its core and utilizing the popularity to incentivize its most popular users to help the company sell product makes sense.  We will see how many Twitch users hop aboard.

NFL partners with EA for Madden foray into esports

The NFL is the latest to dive into esports with a partnership with EA Sports to create a nationwide “Madden NFL 18” tournament.  The Club Championship will begin with local tournaments in each of the 32 team league markets with a representative from each team getting a chance to represent the team in the championship rounds.

The individual teams will wet up the tournaments and they may be hosted at NFL stadiums and other team facilities.  The championship-round events will take place at the Pro Bowl in Orlando and Super Bowl LII in Minneapolis.

The move brings the NFL into esports.  Although it is not the same as the NBA’s formation of an eleague with Take-Two Interactive, it is a push toward involving its video game with fans.  Notably, only 17 NBA teams are participating in the initiative which starts this fall.  But all 32 NFL teams will be participating in Madden.

There were no financial terms on the creation of the Madden NFL Club Championship.  Although there was no announcement on a broadcast or streaming deal which would air the tournament, you might expect one occurring in the near future.

ESPN had aired previous tournaments involving EA Sports’ Madden series.

The move reflects the growing market for esports and leagues attempting to jump on the bandwagon to engage fans and eventually monetize.

eSports to receive consideration for 2024 Olympics

The Washington Post reports that Paris is considering the inclusion of eSports in its 2024 Olympic program.  The inclusion of video gaming is a sign of legitimacy for a sport that is growing more and more each year.

According to a report by Fortune, fans are expected to reach 145 million people in 2017.  The Asian Games will debut eSports as an exhibition event in 2018 and add it officially in 2022.  eSports is set to appear at the Asian Indoor and Martial Arts Games next month.  Four games will be featured next year:  Dota 2, StarCraft II, Hearthstone and a sports game.

Last week, Dota 2, held its annual event at the KeyArena in Seattle.  The tournament offered $25 million in prize money and fans flocked to watch on the big screens inside the Arena as well as those set up around the concourses.

Undeniably, eSports is a big business with massive opportunities for game developers, creators and, of course, players.  It will be interesting to see how receptive eSports will be for an Olympic committee which has excluded baseball in the past.

Nevada law establishes esports betting in state

A new Nevada law signed by the Governor late last month clarified the legality on esports betting.  The new bill allows parimutuel esports betting within the state.

The new law amends language to ensure that “other events” are included in parimutuel wagering.  The gaming laws and parimutuel laws are different in Nevada and thus the law sought to clarify the legality of betting on esports.

The move is another sign that Vegas wants to be the hub of esports.  Some Vegas hotels are converting some of its space to host esports gaming tournaments.  The lure is to bring in the younger demo with hopes of it spilling into their casinos.  The new bill grants the chance for a broader opportunity to bet on esports.