Presentation
Competitive video gaming, or esports, beyond its entertainment and gaming aspects, now incorporates the issue of structuring its stakeholders and their professional relationships. The esports scene requires collaboration between game publishers, esports players—whether independent or part of a team—event organizers, and content broadcasters.
The Genesis of Esports Law: Unregulated Esports Contracts
Initially, the esports ecosystem, especially clubs and teams, focused on establishing a legal framework, primarily through the creation of associations or, increasingly in the professional sphere, commercial companies. Since then, contractual frameworks between players and organizations have become a major issue, perceived as the ultimate solution to all the problems encountered: salary regulations, information confidentiality, player security, particularly regarding transfers, etc.
It is clear that practices have revealed an inability among esports stakeholders to formalize their relationships through contracts. The inherent diversity of each organization, their funding sources, the blurring of lines between amateur and professional structures, the international scope of players and competitions, and the aggressive and unregulated competition within the sector have long prevented stability in the industry.
This has led to a variety of legal acts initiated by clubs to try to control their players or, in some cases, to promote the legitimacy of their organization through the illusion of contracts or charters: in short, esports marketing takes precedence over the law.
Crafted up by amateurs lacking legal expertise, the vast majority of these contracts had, and many still have, no legal standing: abusive or illegal clauses, disguised obligations, fraudulent compensation, lack of legal status for the parties, illicit objectives, etc. Alongside these, ethical charters or moral contracts have also been considered, with equally little legal value or tangible results. Without careful planning or preparation, almost all contracts were not, and in some cases still are, enforced. A perverse effect has even allowed these contracts to be used to exert pressure on players, who are generally younger and less experienced.
Esports Contracts: Service Agreement or Employment Contract
The service agreement, the historical form of contractual framework for esports players, has become the standard for professionals in the field. These professionals, who lacked a specific legal framework before 2016, were drawn to the freedom this type of service offered, allowing commercial companies or associations to sign contracts with players who adopted self-employed status or created companies (SARL or SAS).
The service agreement thus allows for greater precision in defining the parties’ obligations, including their terms of execution, costs and payment conditions, respective responsibilities, etc. In addition to simply participating in sporting competitions, the agreement may also include supplementary services such as brand representation or promotion, content creation and publication on social media, and the transfer of image rights and intellectual property rights for any creations. Its adaptability also allows for clearly defined termination clauses, particularly in the event of a change in the activity or poor player performance.
However, contractual freedom in drafting the parties’ obligations requires particular attention to the content of the clauses that such agreements may contain. Indeed, many current esports contracts are subject to the risk of being reclassified as employment contracts, particularly given the relationships of subordination and economic dependence between the parties, the civil and criminal consequences of which would be disastrous for the organizations involved.
The alternative then lay in labor law. Numerous obstacles quickly arose in using standard employment contracts for the esports sector: too complex to implement, they are poorly adapted to the specificities related to competition seasons that vary depending on the game, the classification of the diverse services required of players, the applicability of associated collective bargaining agreements, and issues of contract termination and renewal, etc. The specific statuses of special regimes, such as sports contracts, performing artist contracts, or model contracts, have also not been used, as their purpose is far removed from the realities of esports practice.
Law and Esports: An Esports Employment Contract Dedicated to Video Game Competitions
Aware of the inherent dangers of developing an entire economic sector without safeguards, legislators mobilized in 2016 to propose an initial legal framework incorporating the specific characteristics of esports. Denying it the status of a sport, which was impossible to implement, this framework focused on the two most important issues: the control of competitions and the protection of players.
Interim report preparing the future legal framework for esports, presenting all the issues encountered.
Note: Why esports cannot be considered a sport: Recognized in some countries as a sporting discipline, and encouraged to become an Olympic discipline, esports remains a legal false friend in France, as it was denied sporting status in the initial regulations governing esports. Far from the aspirations of the gaming community to be recognized as genuine athletes, legislators have adopted a more analytical approach, identifying the reality of the activity and its characteristics in order to deduce the most appropriate legal classification. Even today, esports remains a term encompassing poorly defined concepts and criteria, integrating issues affecting the games themselves, the players, and the organization of the competition. More information.
Regarding the regulation of esports, all esports competitions are subject to a prior declaration process detailing, in particular, the venues, participants, organizers, and prize money involved. To prevent any risk of addiction and the development of illegal offerings, legislators have prohibited all competitions held exclusively online, as well as any form of betting related to esports.
Regarding player protection, the Law for a Digital Republic established a separate legal status for esports players, similar to that of professional athletes, particularly concerning career paths and the ways in which they conduct their activities. This provides those involved in video game competitions with some of the guarantees they had been seeking.
This fixed-term contract, specific to video game players, is now the only way to hire these professionals, eliminating the use of standard contracts. The law imposes formal and substantive requirements for the contract: it must be drawn up in three original copies, be in writing, and include the identity of the parties, the player’s hiring date, and the duration of their commitment, which cannot exceed five years. It must also specify the job title and the amount of compensation.
More information on the accreditation of esports teams to employ players
Esports clubs and organizations are also subject to additional obligations, including the requirement to obtain accreditation.
Particular attention has also been paid to underage esports players, whose employment is prohibited in principle. Employing children under sixteen in esports competitions requires strict adherence to the obligations applicable to child labor, with the sole exceptions concerning child labor under the Labor Code, which also apply to child performers, fairground workers, models, and, more recently, influencers. Any contract concluded with a minor in violation of current regulations is void, and the minor may invoke this nullity. Failure to comply with legal provisions related to the employment of minors is subject to civil and criminal prosecution, punishable by up to five years’ imprisonment and a fine of €75,000.
Esports Organizations and Players: A Mixed Reaction
Initially delighted by the legislative framework, which was welcomed as professional recognition for this new sector, the dream of professional status has faded, giving way to a new contract whose terms and constraints have proven too restrictive for the esports sector, particularly for esports organizations and associations.
Indeed, by granting employee status to esports players, the law has clashed with the amateurism and disorganization of organizations, which are financially and legally unable to fulfill their obligations in an ecosystem struggling to achieve economic viability (Esports: The esports team – economic models of clubs in League of Legends, particularly in the LFL and LEC). The possibility of an employment contract also remains questionable in light of the previous practices of esports stakeholders, who were drawn to the freedom of service contracts. The effectiveness of this system, however, does not eliminate the risk of reclassification as an employment contract, which would entail, among other things, the recovery of social security contributions, CSG (General Social Contribution), and CRDS (Contribution to the Repayment of the Social Debt) from the sponsors.
Esports & Contractualization of Relationships: A Future Full of Hope
Despite a tumultuous past, the French esports scene seems to be evolving towards a better understanding and use of law and contracts, serving its development. While marketing remains as prevalent as ever, the understanding of issues related to transfers, player compensation, and their training and working conditions now seems to be well established, ultimately allowing for a balance in the relationships between organizations and players.
As a co-regulated sector, esports player contracts are increasingly becoming the norm for organizations through other stakeholders who are increasingly using contracts to regulate and structure their own professional relationships. Video game publishers, through their EULAs, define the rights and obligations of players more precisely, particularly regarding competition; event organizers establish game regulations that mandate compliance with administrative formalities and legal provisions, especially concerning players; and sponsors and commercial partners demand guarantees regarding the stability of organizations and their players before considering promotional investments.
Despite the still disparate practices of players and their partners, there is now a genuine desire among associations, esports teams, and public authorities (as seen in an interview with Denis Masségia, Member of Parliament dedicated to developing esports) to regulate and standardize contractual practices specific to the esports environment. It is important to bring greater regulatory transparency to competitions while continuing to guarantee effective protection for esports players.
