In this SiGMA article, State Senator Emeritus and former Chairwoman of the Nevada Gaming Control Board Becky Harris, elaborates on what the global iGaming community can look forward to when it comes to competitive gaming in Canada.
Monetized competitive P2P skill-based gaming is a rapidly growing subset of esports. In simple terms, it is a competition where players engage directly with each other online through a platform to play skill-based video games.
Among other things, it is the ability to compete against other human players that has made P2P gaming extremely popular. While playing against a computer is fun, nothing beats the thrill of outwitting another person in real-time online.
Except for gaming conducted over the internet by a provincial government, online gaming continues to be illegal in Canada. The Criminal Code of Canada (“Code”) makes it an offence to operate a commercial gaming enterprise and defines “game” as a game of chance or a game of mixed chance and skill.
While the Code exempts contests of skill from the definition of “game,” the Canadian courts have adopted a rather strict approach when evaluating the nature of the game. Unlike the courts of the United States, the Supreme Court of Canada (“SCC”) has rejected the use of the predominant factor test for characterising a game as a game of skill.
The predominant factor test, widely accepted by courts across the U. S., resolves the ambiguity as to how games with elements of both skill and chance are categorised. Under the test, a game is classified as a game of skill if the outcome of the game is determined predominantly by a participant’s skill. Likewise, if chance is the predominant element, the game is one of chance.
Canadian courts have time and again clarified that under Canadian law, any game that is comprised of both skill and chance will fall within the definition of prohibited game, regardless of which element is dominant. In other words, if there is any element of chance, the game will be prohibited under the Code.
“THUS, MUCH LIKE 37 US STATES, MONETIZED COMPETITIVE P2P SKILL-BASED GAMING IS CURRENTLY LEGAL BUT UNREGULATED IN CANADA.”
However, the Canadian courts have been cognizant of the inevitable presence of elements of chance in skill-based games that players have no control over. The SCC has explained that for a game to be considered a prohibited game under the Code, “there must be a ‘systematic resort to chance’ to determine outcomes, not merely the ‘unpredictables’ that may occasionally defeat skill.” Such ‘unpredictables’ are external to the game itself and could include a gust of wind or sudden physical discomfort experienced by a player during a contest.
Thus, much like 37 US states, monetized competitive P2P skill-based gaming is currently legal but unregulated in Canada. While the sector is currently unregulated, the need for protecting consumers necessitates supervision and the establishment of best practices through a self-regulatory framework.
Part II. The Rise of E-simulators in Esports Betting
In January of 2022, New Jersey became the first U.S. jurisdiction to approve an esports betting operation, greenlighting Esports Entertainment Group’s proposed Vie.gg platform. Behind the scenes Oddin.gg received a transactional waiver from the DGE to operate in NJ and to provide odds to the Vie.gg platform. While esports betting markets have been active across Europe for a decade now, growth opportunities in the last 3 years have accelerated. Galvanized by trailblazing companies like oddsprovider Oddin.gg, the U.S. is poised for accelerated expansion.
Building on early success in New Jersey, Oddin’s strategic partnership with Betway and others foreshadows entry into Colorado, Indiana, Iowa, Pennsylvania, and other U.S. states. As state legislatures begin to address New Jersey’s pioneering regulatory approach in their respective states, it is likely that more companies will bring their expertise across the Atlantic.
Much like during the sports betting wave following the repeal of PASPA, consumer appetite for esports betting products is nearing a monumental inflection point.
In the post-coronavirus era, there remains a broad shift towards virtualizing industries to reflect the demands of an increasingly socially distanced marketplace.
This impulse has become pervasive in the esports betting community, in turn raising the profile of esports simulators (e-simulators). E-simulators are competitive tournaments purposely designed for betting with a limited and vetted group of players.
In principle, the participants in an e-simulated event are chosen using fair matchmaking protocols and assigned odds to control for variable skill.
Pilot projects of this micro-tournament style, short form betting content were introduced for FIFA, NBA2K and most recently, CS:GO.
Companies generating this sort of programming have partnered with established bookmakers, implying the existence of in-house accountability standards and a real and established market.
“By its very nature, simulated content for wagering purposes generates legal ambiguity which demands standardization.“
Among the early entrants into the e-simulator space is British Sports Information Services (SIS). With approximately 150,000 live events annually, SIS’ Competitive Gaming suite offers a continuous series of P2P esports content along with in-house betting market
expertise. SIS famously managed to introduce live CS:GO events and corresponding betting markets, around the clock, building on its success in streaming simulated greyhound and horse racing.
Notably, these matches are refereed for integrity in compliance with the standards set by the Esports Integrity Commission (ESIC). ESIC does an excellent job in ensuring that incidents of cheating, doping and foul play in esports generally, are reported and addressed. By its very nature, simulated content for wagering purposes generates legal ambiguity which demands standardisation. Enter FairP2P.
Because casual and hyper-casual P2P game play is currently a specialised market, this genre seemingly escapes the notice of larger esports integrity associations.
Fair P2P is the only trade organisation focusing exclusively on casual and hyper-casual P2P skill-based gaming in the U.S. that I am aware of. Fair P2P is tackling some of the larger issues that may arise such as player protections, providing game certifications, establishing a player dispute resolution process and actively engaging stakeholders across the industry.
Game certification within the P2P skill-based gameplay ecosystem ensures game integrity and will reduce any asymmetrical risk faced by different content providers.
To that end, FairP2P is establishing a self-governance framework crafted to ensure that monetized skillbased P2P gaming – simulated or otherwise – is fair, transparent, and equitable. From betting market operation all the way to the minutiae of skill matching algorithms, a FairP2P certification will signify a vetted betting ecosystem wherein wagers can be placed with peace of mind. In conjunction with proper oversight, the adoption of e-simulators will revolutionise the scaling dynamics of monetized esports in a sustainable way.
Casual and hyper-casual monetized competitive P2P gameplay facilitates accessibility to trending games, competition between players, and a connection to the larger gaming community.
As innovative and transformative ways to interact with our favourite games continue to emerge, creating standards to be adopted throughout the industry, establishing game integrity certification, and requiring fair match-making processes is vital so that everyone can safely engage in the esports community and have a great time.
Join us: 14 – 18 November 2022 MALTA
One of the first European countries to regulate the gaming sector, Malta is a hub of global business. The island is an obvious choice for SiGMA’s presence in Europe and a strong foundation for the field’s future. With a plethora of prospects for both investors and entrepreneurs looking to shape the future of this multi-billion-dollar business, Malta Week will bring together industry giants among the affiliates, operators, and suppliers of the gaming sector.
