eSports - a new product for gambling

"With 134 million eSports enthusiasts worldwide, this is no longer a niche activity, but a shift in the way people consume games." (SuperData).

eSports, multiplayer online games that create sporting like contests, is a relatively new phenomenon that has risen rapidly in popularity among the generations that have grown up on digital games and the internet.

Like actual sports, these games have gone past being primarily participant contests to now attracting large audiences watching top players compete. And as with sport, gambling companies are turning eSports events into gambling opportunities for this growing audience whose interest is likely to make them open to having a bet.

Expand all | Collapse all

What is eSports?

eSports, also known as electronic sports or competitive gaming, involves video game competitions with multiple players. The games can be played on closed networks or across the internet. Although multiple player video game competitions have been a part of video culture for some time, there's been a surge in popularity since 2010 due to the popularity of team-based video games, like the International (Dota 2) and the League of Legends.

eSports is no longer just about the players but has become a spectator sport. In 2014, 12 million people attended live eSports events in the United States and Western Europe (SuperData). The 2015 Digital Australia Report shows 42 per cent of Australian gamers attended a live gaming event in the past 12 months.

eSports have also become very professional, with prize pools for competitors moving into the millions of dollars. There need for increasing sums of money and the growth in their audiences have attracted the attention of the gambling industry, looking for new product and new markets.

Who plays and watches eSports?

"It's clear that video games are on the way to becoming more mainstream than playing sports or watching TV"  -CEO of Interactive Games & Entertainment Association.

Industry and market research reports estimate there are 1.2 Billion gamers in the world with 700 million playing online and 205 million making up audiences for eSports.  The background of spectators and players are diverse, most are fulltime workers, 44 per cent are parents and females make up 38 per cent (US market) and 60 per cent of viewers are young at 18-34 years.

Little is known about the progress of eSports in Australia, as a sport or as a gambling product. Tickets for Australia's first eSports tournament, held at Melbourne's Crown Casino in October 2015, quickly sold out indicating a high level of local interest. Further tournaments have since been held at Margaret Court Arena in November 2015 and at Crown Casino in April 2016, indicating ongoing local interest.

Betting on eSports

"eSports is growing rapidly and is in the process of seeping in to mainstream society," Riot Games' eSports manager." (Triple J)

Corporate bookmakers have realised that these forms of electronic gaming offer numerous events that engage with an already interested group of global consumers. eSports offer events that can be packaged as betting opportunities available around the world and around the clock.

This gradual convergence between online gaming and online gambling has been emerging over the last five years with the increase of online professional gaming competitions attracting the attention of major betting companies.

Market research reports that eSports punters lost approximately $194 million in 2014, and are expected to lose $465 million in 2017.

Pinnacle Sports, the first online bookmaker to get into the area, reports that eSports are its seventh largest market for sports betting, ahead of rugby and golf. From accepting its initial gaming wager in 2010, the company reportedly reached their one millionth eSports bet in December 2014.

In April 2015, dedicated eSports betting operator Unikrn partnered with Tabcorp (Luxbet) to set up a digital platform to allow online betting on eSports. Now a number of sports betting companies operating in Australia offer bets on electronic gaming competitions.

Concerns with betting on video games

"The normalisation of gambling into every sphere of life exposes young people to gambling and makes everyday activities more attractive, particularly when there is the appeal of winning money." (Livingston)

While younger children prefer one-player problem-solving games, older children, especially boys, are more likely to choose interactive role-playing games (ABS). There are thus concerns around the effect of taking gaming and promoting it as gambling product. With 91 per cent of five to 14 year olds, and 84 per cent of 15-24 year olds playing electronic games (IGEA) gambling on eSports can become another avenue that presents gambling as a normal progression in an activity that children enjoy. The same is of course true of how gambling can work in relation to sports such as football and cricket.

Gambling researchers have raised as this an issue

"Betting on video gaming will undoubtedly appeal to young people," notes Dr. Sally Gainsbury of Southern Cross University. For young people, simulated gambling may add excitement and appeal to the gaming experience. For young adults, gambling on eSports may pose the same potential harms as any form of continual gambling where opportunities to bet keep occuring.

In addition to issues regarding underage young people, there are aspects of eSports gambling that deserve considered attention on the basis of what we know about gambling and sports gambling generally.

Gambling on eSports has the potential to bring new customers to gambling whose awareness of risk may be unrealistic. Also, as with sports betting generally, issues of supporting a team translating into betting on a team may undermine responsible gambling. The role of peer pressure when sports betting becomes a social activity also has potential to lead to harm, as peers feel compelled to bet, or bet larger amounts than they can afford to lose.

Further information

Subscribe to the Gambling Information Resource Office's mail list to receive updates on gambling information and news.

See past alerts

Sign up

Short and sharp overviews and explanations of gambling regulation, data, and activities.

Read more