Maryland is taking steps to legalize prize-based esports tournaments.
As professional video game tournaments (esports) continue to rise in popularity, the law needs to catch up to accommodate this new form of entertainment. Endorsements, intellectual property, contracts, and esports betting are among the top concerns facing esports players today. Yet, there are still states where prize esports tournaments are illegal. Maryland is one of these states, and state lawmakers are planning to do something about it.
On January 11th, 2019, Maryland State Delegates Robin Grammer and Eric Luedtke introduced a bill, called the “eSports Act,” that seeks to clarify the legality of esports prize tournaments. This bill is making its way through the state legislature: a House Ways and Means Committee hearing on the eSports Act occurred on January 31st, 2019, though there was no vote.
The main issue with current Maryland law is not that it explicitly bans esports, but rather that it is so ambiguous that it can be interpreted to prohibit prize-based esports tournaments. Delegate Grammer has stated these ambiguities are leading some esports competition organizers to prevent Marylanders from participating in national tournaments. These companies do not want to open themselves up to criminal liability, even if the chances of enforcement are small. By clarifying the legal status of esports, this law seeks to promote business and commerce in Maryland.
A look at the current governing statute, Maryland Criminal Law § 12-102, shows why ambiguity leads to problems. Specifically, the statute prohibits making or selling “a book or pool on the result of a race, contest, or contingency.” An esports competition can be interpreted to be a form of contest, making any prize pool based on the result of the contest illegal. Violating this section is a misdemeanor, which can result in between 6 months to 1 year imprisonment and fines between $200 and $1,000.
The eSports Act fixes this statutory problem by adding § 12-114 to the Maryland Criminal Code, which defines esports as competitions of skill. The Act explicitly allows organizations conducting esports competitions to offer prize money or merchandise to winners. This clarity would greatly improve Maryland law, considering that the original gambling law was clearly written in a time where esports did not exist.
Interestingly enough, the eSports Act also prohibits esports betting, an interesting development considering that esports betting is expected to grow nationwide. Just last year, the Supreme Court overturned a federal prohibition on sports betting in Murphy v. NCAA, opening the door for states to legalize and regulate sports betting, including esports.
The decision to keep a prohibition on esports betting in Maryland makes sense considering the current political context. The priority at this point should be to make sure that prize-based esports tournaments are legal, a proposition that should hopefully pass with bipartisan support. The debate as to whether to legalize esports betting, as well as how to regulate it, can come later, as it is a more controversial proposition. Perhaps it is better to wait and see how other states regulate sports betting and esports betting before delving into these relatively untested waters. However, given the increasing popularity of esports betting, it will only be a matter of time before this provision of the eSports Act becomes dated and will need to be replaced with a comprehensive regulatory scheme.
Overall, Maryland legislators should absolutely enact the eSports Act in its current form. The clarity that the text of the Act provides will ensure that Maryland citizens are not left out of the ever-growing esports world. States with similarly ambiguous gambling laws should also enact laws like the eSports Act to keep up with the times. The question of esports betting, however, needs to remain on the radar and should start to be addressed by states sooner rather than later. Otherwise, the law will remain behind the times, without any nostalgic, retro video game charm.
Photo Credit: Philipp Keller
Alex Betschen is a graduate of the University at Buffalo School of Law. He was a student attorney at UB’s Civil Liberties and Transparency Clinic, where he worked on cases involving government disclosure of private information and use of hacking tools. He also served as an Editor on the Buffalo Law Review and is an accomplished musician.