The Sweepstakes for the Booming Esports Industry in India: How micromanagement at different levels can hamper the growth of Esports in India

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[Author: Bharat Kapoor, a student of law at University School of Law and Legal Studies, GGSIPU, New Delhi]

After featuring as a demonstration event (medals won were not added to a nation’s tally) at the Asian Games 2018- Jakarta, Esports is set to make its debut as medal events at Asian Games 2022. The Olympic Association of Asia (OCA) announced on 8th September 2021 that there will be 8 medal games in the Asian Games- Hangzhou including FIFA (made by EA Sports), an Asian Games version of PUBG Mobile and Arena of Valor, Dota 2, League of Legends, Dream Three Kingdoms 2, HearthStone and Street Fighter V. That accounts for 24 medals that can be won in esports to add on to the medal tally of the participant nations.

What does this mean for esports in India?

As per a report by EY, though at a nascent stage, the esports market size in India has quickly scaled to INR 3 billion in FY 2021 and we expect it to reach INR 11 billion by FY 2025.  However, the sport has a much larger economic impact: it is expected to generate economic value of around INR 100 billion between now and FY 2025.

The growing market size of esports paired with it being included in international sports conventions as medal events calls for the overhanging need of governmental regulation and recognition for esports, more than ever. As of now, there are certain issues with how esports are being regulated in India. There are three broad reasons for the micromanagement that is taking place in the esports industry, which are as follows:

  • Esports organizations/ Federations

Ever since the growth of esports in India, many private and non-profit organizations have come forward to regulate and make policies to help esports reach its potential in India. Although, there is a big issue with that- none of them have been recognised by the Indian government (Ministry of Youth Affairs and Sports) or the Indian Olympic Association (IOA). This was brought up during the discussion on esports in the Lok Sabha led by (then) Minister of State for Youth Affairs Kiren Rijiju when asked about esports governing bodies. It was mentioned that the government was aware of the existence of such federations like Esports Federation of India (ESFI), Esports Development Association of India (EDAI) and Esports India (EI), but does not recognise any of them.

In addition to that, another non-profit organization, Esports Players Welfare Association (EPWA) was launched in August. The association aims to support enrolled esports players with services such as legal advice, contracts, dispute resolution and career advice, among others. They, too, remain unrecognised by the Ministry and the IOA.

During Asian Games 2018, a contingent of 9 athletes represented India in the demonstration esports events including Hearthstone player Tirth Mehta who grabbed the bronze medal in the event. The responsibility of conducting the qualifiers was delegated by the IOA, who decided to not have a say on the selection process, to the Asian Esports Federation (AESF), recognised by OCA, who in turn delegated it to ESFI. The same is being repeated for the Asian Games 2022. There are a few issues with that, which were addressed by National Christian Council (NCC), Telangana in letters to the Ministry and IOA, as follows:

  1. ESFI, who are members of International Esports Federation (IeSF), Global Esports Federation (GESF) and AESF, conducted the 2018 qualifiers on a one-day notice and the announcement being made on their Facebook page which barely had 2000 followers at that time, coupled with the incompetent sign-up process led to an uproar from the esports community in India.
  2. The contracts signed between ESFI and the athletes were criticized heavily by the community and legal practitioners alike including remarks like “Strictly speaking, it is legal, but it’s also unethical and unfair,” “It didn’t seem like a lawyer drafted it, it looked like they just copy-pasted clauses from somewhere on the web. Nobody in their right mind would sign away a lot of those rights.” and “vile and atrocious”.
  3. What was the criteria for selecting ESFI, an organization that does not fall under the purview of RTI act, be allowed to shortlist and select Indian athletes, after previous mismanagement in 2018, for the Asian Games in 2022? Why did IOA choose a private body over other relevant and eligible organizations?
  4. There were questions about the credentials and credibility of key members of ESFI, including Mr. Dhiman Kashyap who runs Operations for ESFI and is a stakeholder in an Esports team – Resilience, making the selection process biased.

Why is a sports team stakeholder also a director of ESFI being given the responsibility to select India’s national team for the Asian Games? What is ESFI’s criterion or process for selecting players for the tournaments? How is a non-profit entity allowed to bind players on revenue-based clauses such as participants granting them a royalty-free, exclusive, perpetual, worldwide license to copy, change, use and distribute submissions and material in agreements? How does a private body that was also named in massive mismanagement of the funds during the 2018 Asian Games is considered reliable for the management of the national team?

ESFI, despite having international affiliations still hasn’t received governmental recognition as they do not comply with the stipulations laid down by the National Sports Development Code on several counts. Some of these shortcomings, such as the fact that ESFI has never conducted elections and Lokesh Suji and fellow co-founder Yugal Sharma (both of them senior executives in the telecom industry) have appointed themselves as permanent directors, could potentially be fixed — provided they are willing to cede control. But compliance with some of the more onerous requirements, such as the creation of affiliated units at district and State level, as well as tournaments at various age levels, appears to be a distant prospect.

To sum it up, there are multiple federations set up by interested members of the esports community trying to regulate and lead India’s esports journey but none of them have received recognition from the Ministry or IOA and thus a lack of national regulatory federation continues to obstruct esports’ growth in India.

  • Sports is a subject on the State List

Sports being on the State list can further leads to micromanagement of esports as different states can have different legislations to regulate esports which can lead to inconsistencies in the working of the industry throughout the country.

Right after the report of the Lok Sabha session came out, where Kiren Rijiju acknowledged esports as an emerging platform among the nation’s youth and how it should not be confused with gaming/gambling and its inclusion as a medal event in the upcoming Asian Games, IOA stated that it plans to recognize esports as a formal sport. In the same Lok Sabha session, Kiren Rijiju also told that the government does not plan on bringing sports under the Concurrent list in the Constitution. This makes a nationwide legislation for esports a distant goal for the industry, although esports being acknowledged as a legitimate industry for the first time by the Government of India is a good first step that can get some wheels turning for the industry.

  • Game Publishers acting as Federations on their own

Publishers have a big say in how their games are used in esporting events due to the nature of Intellectual Property rights (IPRs) they have as creatives. Some publishers organise esports events on their own or let organizers conduct competitions with their games freely in an open ecosystem (E.g.: Valve allows many organizers to run CSGO or Dota 2 tournaments) while some partner with various gaming platforms to conduct these tournaments in closed ecosystems with franchised esports leagues that requires participants to be members of such franchises and increases the teams’ value generating revenue for the league. So, even though the organizers decide on the framework of the competition, publishers decide the type of ecosystem.

Although, this is less of a factor if there is a national legislation governing esports aimed at creating a healthy esports ecosystem that can flourish exponentially in the current situations and in the foreseeable future. Instead, in the presence of a nationwide legislation, these IPRs with the publishers makes the industry more flexible and versatile in its execution.

In conclusion, the current Indian esports industry is being micromanaged on different levels that can lead to inconsistencies, hampering its expected growth. Introduction of a national legislation which creates an ecosystem compatible for both athletes and publishers along with recognition of a national esports federation can catapult India amongst the best in Esports, by way of huge incoming revenues as well as building its soft power in the global scenario, similar to what we saw with Bollywood and cricket previously. The future of esports in India beholds multi-dimensional gains but all of it depends on how the government navigates the situation, and more importantly, WHEN?

*For any query, feedback or discussion, Mr. Bharat can be contacted at [Bharatkapoor2april@gmail.com]

PREFERRED CITATION: Bharat Kapoor, The Sweepstakes for the Booming Esports Industry in India: How micromanagement at different levels can hamper the growth of Esports in India, SLPRR, <https://sportslawandpolicyreviewreporter.com/?p=1611> September 15, 2021.

*NOTE- The opinions and views expressed in this article are that of the Author(s) and not of SLPRR- the expressed opinions do not, in any way whatsoever, reflect the views of any third party, including any institution/organization that the Author(s) is/are currently associated to or was/were associated to in the past. Furthermore, the expressions are solely for informational and educational purposes, and must not be deemed to constitute any kind of advice. The hyperlinks in this blog might take you to webpages operated by third parties- SLPRR does not guarantee or endorse the accuracy or reliability of any information, data, opinions, advice, statements, etc. on these webpages.

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