ESPORTS WEEK: Sportradar’s James Watson on the future of betting and integrity in pro gaming

Increased esports interest across the board has also attracted the attention of the gambling industry. Sportradar's James Watson explains how esports organisers are dealing with the opportunities that come with higher revenues from betting, but also the challenges that come with closer scrutiny.

ESPORTS WEEK: Sportradar’s James Watson on the future of betting and integrity in pro gaming

The esports sector has drawn considerable interest from within the traditional sports industry, drawing investment and inspiring leagues and rights holders to set up their own competitive video game competitions. Increased interest across the board has also attracted the attention of the gambling industry. But as esports gets closer to commercial maturity, organisers face questions about how ready they will be not just for the opportunities that come with higher revenues, but also the challenges that come with closer scrutiny.

SportsPro spoke with James Watson (below left), head of esports at Sportradar, during ICE, the largest global meeting of operators and suppliers in the betting space, to discuss the growth of betting on esports and its impact on the industry.

How has the betting space around esports evolved since Sportradar started working in this space?

In late 2014, when Sportradar decided to roll out a suite of betting services into the esports world, we took a look at the landscape. We found that there were less than a dozen bookmakers offering any kind of esports betting. Fast forward to 2018 and we regularly see over 100 offerings on a regular basis across a swathe of different games. More and more operators are realising esports as a serious opportunity: some operators purely dedicated to the esports space, others household names such as Bet365 and William Hill who have added it to their global offering.

There were a few years where ‘skins betting’ dominated the betting space, as lounge sites encouraged esports fans and players to bet using skins, which are decorative features applicable to weaponry with no impact on performance, but which had monetary value linked to their scarcity and profile. After a range of scandals linked to underage betting and conflicts of interest, however, the phenomenon all but faded into history as Valve, the game publisher, decided to take a public and hard line on these sites.

What is unique about esports betting as opposed to betting around more traditional sports?

Those in the betting space who fail in this area, whether punters or operators or suppliers, are those who don’t pay sufficient attention to the nuances of esports. Firstly, it is difficult and one of the main reasons it is difficult is that so much is happening at the same time. In esports, often ten individuals are doing incredibly relevant things, often very quickly. That results in an avalanche of relevant data. Any supplier or operator that doesn’t receive all that data direct from the tournament organiser is never going to be able to compensate with scouts or delayed data feeds.

Also, esports fans are very discerning. They have an acute sense of who they are, what characterises them and who they should not be grouped in with. Lazy or naïve organisations trying to connect with these fans often do so clumsily. Finally, esports is predicated on the video games industry, where games that are popular can rise and fall out of nowhere. The traditional sports industry is almost completely fixed and thinks in timescales of decades for changing even simple things. Esports games can change drastically year to year, or even event to event, as new patches or versions are released to alter or upgrade the gaming experience. Modelling betting experiences, markets, and making investments against a backdrop like that is incredibly challenging.

If betting is a natural follow-on from esports’ popularity, does it stand that concerns around match manipulation naturally follow on from esports betting?

It is a sad truism that the more people enjoy a sport and want to engage in it betting-wise, the more likely it is that fixers will see this as an opportunity. More betting turnover on any sport creates the high liquidity that fixers are drawn to and esports’ exponential growth in popularity was almost inevitably going to generate interest, betting and manipulation concerns.

It is worth saying that there is nothing intrinsic in esports that makes it more or less likely to come under attack, but what is and will remain critical is the response that stakeholders and the ecosystem in general put forward.

What is the industry doing to tackle this issue then?

We have found some of the stakeholders in the esports space to be acutely aware of this issue and determined to get ahead of it. At the heart of the partnership that officially launched our esports offering with ESL in 2015 was integrity and Sportradar employ our Fraud Detection System across all their tournaments worldwide. When the Esports Integrity Coalition [ESIC] was formed in 2016, we were one of the first to sign up and they have been strong advocates for prevention workshops and educational channels to help players and entourages understand the risks, the sanctions and the MOs of fixers. Most encouraging, we worked with ESIC recently to secure two multi-year bans for players found to be guilty of match-fixing on the back of our monitoring system. So the messaging is getting out. There are of course numerous publishers and tournament organisers that have not yet signed up to any safeguarding measures and we hope that it won’t take more scandals for them to come around to the urgency and impact of this growing problem.

How does betting and integrity in esports look going forward?

The esports industry and all its orbiting areas are definitely maturing. Operators are experimenting with formats, offerings, markets, presentation to try to find the best way to connect with these elusive esports fans. Skins betting websites, while not completely eradicated, have lost their sheen and buzz. Significant stakeholders have decided to challenge issues around integrity head on. So the omens are good.

Betting on esports will take a long time to mix it with the traditional top five sports but there is still so much for growth and development. Undoubtedly, this space will grow with new, creative, entrepreneurial, dedicated operators driving innovation.

Integrity will require more top-down authority to really help ensure consistency, clarity and meaningful sanctions. But most publishers don’t run their events and that creates a disconnect. And that is before you try to understand where and how to start when a team from country A, with players from country B plays in a tournament organised by an organiser from country C, in a competition hosted in country D, played on a game developed in country E, while the suspicious bets are placed in country F by someone who is a national of country G!

The Overwatch League presents a very different proposition to the one just mentioned, with players and teams contracted under one governing body, with rights and representation full explained and give to all parties. That is a system that is difficult to corrupt. However, as more and more people get interested in esports every year, those looking to subvert the system will find opportunities and vulnerabilities to exploit, especially in an ecosystem that is disjointed, unconnected and full of stakeholders, whether poorly paid players, small tournament organisers or jealous entourages, that can be corrupted.