Fenwick and the Berkeley Center for Law & Technology brought together legal players from across the gaming industry for a half-day conference on the current legal landscape for gaming and esports and gambling in these industries.
Dan Nabel, principal counsel at Riot Games, talked about the issue of cloning games. “Cloners are getting way more sophisticated because they’re getting way more money. So now that we have this skyrocketing business, you have way more sophistication in the space, which makes things way more challenging to deal with, I think, particularly for smaller companies,” he said, as recounted by The Recorder.
“If you have a case with [cloning], the best thing you can do is not only get the game, but whatever platform it’s on, in front of the judge—and more importantly their clerk—as quickly as possible so that they see it, and they can have that side-by-side,” said Chrissie Scelsi, U.S. general counsel for Wargaming (USA), who mentioned that it is helpful to be able to show comparisons of the two games involved in cloning cases via gameplay in court.
Eric Ball, a litigation partner and member of Fenwick’s games industry group, added that he has asked judges to play the games in question during cloning cases to help them see the similarities in gameplay. Ball cautioned that’s a fine line to walk, though, as concerns have been raised that a judge playing the game itself could constitute a judge conducting his or her own research.
The Recorder reported that the panelists also discussed the next level of legal challenges for the gaming industry. Sara Stapleton, gaming industry attorney and former Zynga in-house counsel, told the panel that the FTC’s stance “regarding influencers and how to disclose sponsorship and how … the practice is playing out with regard to use of influencers and publicity in gaming” is something to watch.
Panelists also discussed the “the next level” of gambling issues in gaming and esports in coming years, outlining strategies to address the multiple and sometimes conflicting national and international regulations.
“We haven’t seen an immediate turnaround on sports betting as it applies to videogames,” said Jennifer Stanley, Fenwick’s games industry group co-chair and copyright practice chair. “A state having the infrastructure to be able to put this regulatory landscape into place is not as easy as it sounds.”
Fenwick litigation lawyer and games industry group member Nicholas Plassaras talked about the convergence between gaming and gambling, noting there has been controversy over the last year with game mechanics like loot boxes, in part because of regulatory and parental concerns as to whether they should be classified as gambling.
“We’re going to see the same amount of attention and scrutiny from regulators to figure out how these things are playing out in practice, and whether there are special features that need to be tweaked or disclosures that need to be made in order to protect kids from this potential convergence,” Plassaras said.
Regarding the state of sports gambling in the United States in the aftermath of recent legal proceedings, Bill Chang, principal counsel at Riot Games, predicted that a number of states would start to authorize sports betting, which would affect esports. Chang noted that there has been a push by sports betting organizations to get into the esports world, but they have not been successful yet.
Berkeley Law Adjunct Professor Rick Trachok said he believes that the legalized gambling market is moving in the direction of video games because the current revenue model isn’t working any longer. Trachok noted that in Las Vegas, for example, approximately 70 percent of the revenue is coming from amenities and clubs, while only 30 percent is coming from actual gambling—the reverse of what it was 15 years ago.