Esports: Integrity, Profitability & Responsibility

Written By:

Pavol Krasnovský, CEO, RTSmunity

When comparing traditional sports to esports, there are multiple recurring topics that are seemingly never met with a definitive answer. One of them is the integrity of esports, another one is the profitability of esports betting for sportsbooks, and yet another is the responsible gambling aspect. Let's dive deeper into all of those three and clear the water once and for all.

Questions of Integrity

In regard to integrity and potential match-fixing, esports have come a long way from an industry that was once the “Wild West”, just like any other traditional sport. While there were no doubts about the lack of integrity in the past, nowadays, sportsbook operators have a safe way to protect themselves. The first step is to cover only tournaments and leagues that are legitimate, with proper infrastructure in place, including referees and data feeds available in real time. The clear mark of a legitimate tournament is the prize pool because anything below $20,000 for the whole tournament can be a warning sign, with the $10,000 prize pool being the absolute minimum.

Another way to be sure that the tournament is solid is the cooperation of the tournament organisers with the Esports Integrity Commission (ESIC). ESIC is an organisation responsible for connecting all participants of esports tournaments, and working as guardians of the integrity. Their ultimate goal is the disruption, prevention, investigation and prosecution of all forms of cheating, including, but not limited to, match manipulation and doping. ESIC also aims to connect esports analytics companies with betting operators, sound the alarm when anything suspicious happens, and to inform everyone involved. In the grand scheme, this is a type of institution that exists in traditional sports, and having an organisation like this allows us to keep the same standard.

Last but not least, the continuous monitoring of the market-movement information on big betting exchanges like Betfair is yet another way of determining potential threats. Unfortunately, not many esports analytics companies are able to do this today, which makes us one of very few in the business who can work with this kind of data. This is an extra protection for sportsbook operators because the indicators of match-fixing can be very clear to companies that work as liquidity providers on exchanges. Simply put, once you know what is the fair price for a given match, you can easily recognise the suspicious betting activity, and suspend your bets until the situation becomes clear.

Profitability of Esports Betting

One of the biggest headaches for sportsbook operators is the profitability of esports betting as such. While sportsbooks have a tremendous amount of experience with traditional sports and betting, esports are a very specific field with many differences, ranging from the amount of data points, to the dynamics of the game. And the hard truth is, many sportsbooks are losing money on esports today, although they can be profiting. The main reason is that the betting companies take the same trading and risk management they use for football or basketball and apply it to esports as well. But once you realise that the raw amount of data from a single Dota 2 match equals the amount of data collected from the whole US Open, it is clear that if you want to profit, you just cannot have the same approach.

There are two ways to tackle this problem. One is to start from scratch and build your own expertise, which is a project for five to ten years, during which you will probably be losing money, or at least not making much of it. The second way is to find a partnership with one of the esports odds providers on the market and make a shortcut to the profitable business. Since the esports betting industry is still partially in its infancy stage, even this approach cannot guarantee profit in general. In the case of our company, this has led us to the idea of including the guarantee of profit for the sportsbook in the contract. No other company is able to follow this example as of yet, nevertheless, this is a significant step towards creating a sustainable esports betting environment.

Responsible Esports Gambling

The last topic I wanted to cover is the responsibility of gambling in esports. From the helicopter view, nothing is changing, laws and regulations towards responsible gambling are valid in esports betting just like anywhere else. But due to the fact that the target audience is much younger than traditional wagers, it is necessary to be extra diligent about the age requirements. No one who really supports esports wants to involve kids in betting. It can be fun for adults, and it should stay that way. Let's all work together to create a healthy environment, where esports can grow.


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