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New Jersey Adjusts Course, Welcomes Esports to Be Wagered On

All those who bet on esports in New Jersey can breathe a sigh of relief thanks to new regulations clarifying the law.

Roger Quiles, Esq.

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The adjustment to the law means people can wager on esports competitions. (Photo via Esports Marketing Blog)

In the wake of the Supreme Court’s decision to overturn the Professional and Amateur Sports Protection Act of 1992 (“PASPA”), New Jersey has passed legislation authorizing sports betting within its state. Though the passage of this legislation is notable given that New Jersey was the state which challenged PASPA to the Supreme Court, its exclusion (and inclusion) of esports has been a hot topic of discussion throughout the industry.

The bill signed into law on June 11, by Phil Murphy, New Jersey’s Governor, appeared to specifically exclude esports betting, stating that “A prohibited sports event includes all high school sports events, electronic sports, and competitive video games.” This language was widely interpreted to mean that esports events were considered prohibited sports events under the legislation.

However, it appears that the esports betting ban was not intended by the legislation, as the State’s Division of Gaming Enforcement has recently established emergency regulations which clarify that the legislation was not meant to ban betting on all esports competitions.

On June 14, three days after the sports betting legislation was signed, New Jersey’s Division of Gaming Enforcement, the state’s gambling authority, issued emergency regulations which clarify the State’s stance on esports betting. The emergency regulations specify that betting on “high school electronic sports and high school competitive video game events” (emphasis added) are prohibited.

Additionally, the emergency regulations explicitly include “electronic sports and competitive video game events” as a permissible “Sports event” under the legislation, so long as the esports event is not sponsored by a high school, involve a high school team, or involve a player under the age of 18. Despite the clarification that it is impermissible to bet on high school esports events, the 18-year-old age requirement of an event’s players will prevent betting upon some pro esports events nonetheless, as a small number of pro players are under 18.

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The emergency regulations are a welcomed change, as Atlantic City and its casinos, who stand the most to benefit from sports betting in the state, have sought to host more esports events. The last two years alone have seen the city and its casinos host the Gears of War Pro Circuit: Atlantic City Open, the Rainbow Six Pro League’s finals, and Royal Flush, a pro Smash Bros. event.

With an estimated global revenue of $6.7 billion in 2018, esports betting can be a lucrative offering to sports books in New Jersey. Time will tell if esports is embraced by New Jersey sports books, though the state certainly has cleared the path for them to do so.

Roger Quiles, Esq. is the founding partner of Quiles Law, a firm which exclusively services the esports and sports industries on a wide variety of legal matters. Roger is also the co-owner of FTW Talent, an esports player and talent agency. He can be reached at Roger@Esports.Law

Esports

Riot Games Wants Non-Endemic Brands That Buy Into Creative Approach

Despite League of Legends’ rapid growth, Riot Games waited to push for non-endemic brands. Now, the brand is bringing in partners in unique ways.

Jeff Eisenband

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Photo Credit: Jasen Vinlove-USA TODAY Sports

Riot Games held the first League of Legends World Championship in 2011. Instagram was eight months old. Twitch debuted that month.

The event brought in 1.69 million unique viewers. The winning team earned $50,000.

In the eight years since, League of Legends has ballooned as a competitive esport. The 2018 World Championship was watched by 74.3 million viewers. The winning team’s prize: $2.42 million.

With rapid growth comes fertile sponsorship opportunities. Naz Aletaha, Head of LoL Partnerships at Riot Games, is behind that operation. In her tenure at Riot Games – which started in 2012 before a promotion to her current role in 2013 – Aletaha has taken time to introduce the product to non-endemic brands. Now, her team is bringing on these brands with unique sponsorship opportunities.

“The priority for us was building out a global sport to service the very global audience that we have,” she remembered of the early days, centralizing LoL’s esports product. “It was about building up our capabilities as a sports operator, a broadcaster, a live event producer, a governing body.”

The narrative changed in 2016. That year, Riot Games hosted its World Championship in the United States, and sold out Madison Square Garden and Staples Center for the LCS semifinals and finals.

“We were able to look at the groundwork we had laid and the infrastructure that we had built,” Aletaha recalled. “We had an ecosystem that was really robust and primed for partners, where we can actually offer to come in at the regional level, national level, global level, event level and team level.”

Global esports such as League of Legends have glaring business differences than traditional North American sports leagues. While traditional sports leagues sell their broadcast rights to TV platforms, Riot Games holds on to LoL broadcast rights.

LoL has separate leagues by countries and regions. Aletaha and her team can pitch sponsors with domestic and international layers, becoming a chameleon market-to-market.

“If you go look at China, you see Nike is sponsoring the LPL (top Chinese league),” Aletaha said. “In Europe, you have Kia. In Brazil, Gillette.”

The way these brands present themselves depends on the region. In an ever-changing field, mode of consumption is not static.

“In the U.S., we’re not on linear,” she notes – NA LCS, LoL’s top North American league is broadcast on Twitch, YouTube and ESPN+ in the U.S., with ESPN+ coming after a fallout with BAMTech. “We are in some other markets where that’s how viewers consume esports. I think linear is interesting to date in the U.S. We haven’t seen that it has been necessary because our fans are so digital first. Digital platforms offer the engagement factor. You’re no longer just sitting at home on the couch by yourself with the remote control. You are engaging with like-minded people and that’s fun and exciting in a different way.”

In terms of the actual ticketing strategy, Aletaha said Riot Games keeps prices low to appeal to young fans who have less disposable income than an average fan of traditional sports. For decades, sports revenue has been about TV rights and ticket sales. While expanding in those two categories may come in the long run, Aletaha and her team would rather control and build for the time being – that is what they pitch sponsors.

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At the start of the 2018 season, State Farm became a major non-endemic sponsor for NA LCS.  This May, the brand announced an extension through 2021, which includes the brand becoming the presenting sponsor of the League of Legends College Championship.

Meanwhile, Mastercard became the first LoL esports global partner last September, signing on as the exclusive payment services partner for League of Legends Global Events.

“It took us over two years to explore and educate ourselves on the esports industry to determine the best path that would enable us to connect with this passionate community in an authentic way and early on, it became very evident that partnering with League of Legends was the biggest and best opportunity to do this,” said Emily Neenan, Mastercard vice president of global consumer marketing & sponsorships.

“What really stood out to us was Riot’s community-first approach, leadership and scale, which helps to create opportunities to connect with our cardholders in new ways,” Neenan said.

However, there is some concern in the esports industry as to how long Riot Games has taken to attract major non-endemic sponsors. In such a fast-moving world, LoL’s rise is not as fresh as it once was.

“They should be the top of the expectations list,” said esports consultant and journalist Rod Breslau. “They are the most-viewed game in the world. From a sales perspective, they should be the best. With LCS as a prime example, because that’s the one in North America, they have not done as good of a job as they should have considering the position they’ve been in.”

After FOS’ interview with Aletaha, another non-endemic sponsor: Rocket Mortgage, joined the fold for LCS. Meanwhile, Dr. Pepper, Puma, BMW, AT&T, Honda, Monster Energy and Nissan are among non-endemic brands partnering with specific LCS teams.

Before State Farm and Mastercard came on board, Coca-Cola and American Express both were on Riot Games’ payroll, albeit with lesser deals helping to create brand name legitimacy in the esports space. That had led to non-endemic brands with less name recognition being front and center for the property – for example, sandwich chain Jersey Mike’s was a 2018 Summer Split sponsor for LCS.

“Jersey Mike’s makes some solid-ass sandwiches, but if you’re going to tell me Jersey Mike’s – no disrespect to Jersey Mike’s – is the premier sponsor of the biggest game in the biggest region money wise, and it’s Jersey Mike’s? No,” he said.

Breslau tips his hat to Riot Games’ sales success at the global level and domestic level, outside of the U.S. He thinks LCS should look to one particular country as the standard for success.

“Nike sponsors the LPL,” Breslau said. “The LPL outclasses the LCS in terms of sponsorship, the sales of the league, it’s already a city-based thing in China. The stadiums are packed there. LPL has the best localized league in the world.”

Riot Games is a subsidiary of Tencent, the holding company, which officially owns LPL, meaning Aletaha does not have the same jurisdiction she has for the LoL World Championship and most of the other domestic leagues. But wherever she is pitching sponsors, Aletaha has the same mentality; it’s not just about writing a check. It is about creativity.

READ MORE: ‘Locked In’ Goes Behind the Curtain With NBA 2K League Players

“The right partners want to come in and learn more,” Aletaha said. “The right partners want to come in and say, ‘We understand that we can’t take the exact formula that we use in the traditional sports world and apply it here and net the results that we’re looking for.’ We want partners to bring that expertise they have from traditional marketing, but that want to collaborate with us and create something that’s custom for the gaming audience.”

Breslau is excited but skeptical to see Riot Games dive hard into the non-endemic marketplace. He believes Overwatch League has done a stronger job bringing in non-endemic sponsors in just two seasons.

“Its popularity is nowhere close to the amount of international appeal as LoL, and despite this, Activision/Blizzard – and Bobby Kotick has a lot of power and pull – they have people there who make s*** happen.”

Aletaha claims Riot Games is now in a position to build the deepest non-endemic sponsorship roster in the world. League of Legends is not the only video game set up for financial success, but with a world championship that bring in massive viewership, Riot Games holds the rights to the most lucrative esports branding opportunities at this moment.

Slowly, but surely, traditional commercials powers are loading into the space.

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‘Locked In’ Goes Behind the Curtain With NBA 2K League Players

For Season 2, the NBA 2K League is diving into the lives of its players in the content series “Locked In,” hoping to attract new fans.

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Photo Credit: NBAE/Getty Images

Walking through New York City’s Guggenheim Museum, Brian Traynor discusses his love of art and opens up about his life’s hardships, giving NBA 2K League fans a glimpse into the lives of esport athletes rarely seen — until now.

Traynor, or “NachoTraynor” for T-Wolves Gaming, is one of two subjects in the fourth episode of the league’s new behind-the-scenes series, “Locked In Powered by AT&T.”

A fine arts graduate, NachoTraynor rarely had access to museums growing up and now uses his NBA 2K League trips to New York City to visit as many as he can. This also helps clear his head before games. His story is complemented by Cameron “KingCamRoyalty” Ford, a player for Magic Gaming and rapper who uses studio time in a similar fashion.

READ MORE: Allied Esports Recognizes Opportunity in Mexico With New Partnership

“This is one of my favorite episodes because it takes it so far off the court,” says Matt Arden, NBA 2K League head of content and media. “This is the first piece of content we created that honestly has very little 2K League footage and truly is about these two incredibly unique individuals.

“We’ve found that we’re scratching an itch. We feel like highlighting this side of the league is so important to grow league awareness and grow the personalities.”

“Locked In,” is bringing to esports the same sort of access HBO’s Hard Knocks and “24/7” have brought to traditional sports.

Arden joined the NBA 2K League five months ago to help get these types of broadcasts off the ground and help tell stories around the league’s personalities. He believes this type of content is key to attracting more basketball and casual sports fans beyond hardcore gamers. The new series is built on the foundation of “Draft Hopefuls,” a content series that went behind-the-scenes with NBA 2K League prospects behind the Season 2 draft this past March. Arden says that series performed well and affirmed the craving of creative storytelling. This set in motion “Locked In.”

As the NBA 2K League’s second season progresses, having that storytelling beyond the Xs and Os was important. For Roger Caneda, an esports consultant and former Mavs Gaming general manager, he feels hiring Arden and the introduction of behind-the-scenes content will be important for the NBA 2K League’s success and longevity.

“Season one happened so fast, the league wasn’t able to grasp how starting something like the 2K League needed content to be successful,” Caneda says. “Esports is an industry where people are curious, and providing this behind-the-scenes insight is big, not just for 2K but the industry as a whole.

“Diving into content will be huge for everyone.”

Now a fan on the outside, Caneda feels “Locked In” makes him more compelled to watch the games. He might not be alone, according to the NBA 2K League, it has gained 20,000 followers on its YouTube and Twitch channels this year. Total minutes watched has experienced year-over-year growth of 36%. All of NBA 2K League’s live and on-demand content has also generated 25 million views across social channels since the start of Season 2.

With “Locked In,” Arden is doing what he was brought in for, but he is also quick to point out the series is helped immensely by the league’s partnership with AT&T.

“They can’t go unnoticed,” Arden says. “They’re truly looking to build connections and share stories and elevate our game. The conversations we’ve had aren’t about their logo, but they’re invested in the next story we want to tell.”

A simple logo placement would likely be plenty for many partners, but Shiz Suzuki, AT&T AVP of Experiential Marketing and Sponsorship says it is in the company’s best interest to help make the content the best it can be.

“Anything we can do to help bring fans closer to the sport they love is what our NBA partnership is all about and why we’re thrilled to help the NBA 2K League make these stories and this original content series happen,” Suzuki says. “Those who follow the action know how multifaceted these players are, and this series brings that to life with a riveting approach to storytelling that even those unfamiliar with the league can look forward to watching.”

Finding the next players to feature is not difficult for Arden and his team. The production team often comes across stories in broadcasts and then tries to execute an episode with a 10 to 12-day production schedule.

“We have some incredible, multi-dimensional personalities from diverse backgrounds in our league, so it actually hasn’t been that difficult to identify good stories, frankly it’s been difficult to cross some off the lists,” Arden says. “These stories and personalities have emerged naturally on their own and we’ve been trying to be very organic in taking those stories when we see them bubble to the surface and taking them and running with them.”

READ MORE: ‘We Are LAFC’ Shows Off Exclusive Content Opportunity for MLS, ESPN

Right now, “Locked In” is still ironing out the logistics of filming and how to go to market and Season 1 is not even complete — the league hopes to release 10 episodes. Still, Arden’s happy with the product so far and would love to see a second year of “Locked In.” More so than anything, he’s happy with how the storylines are coming full circle to be included in tournament broadcasts.

“The more stories we uncover, the more we talk about individuals, learn about them, the more other players notice, the more fans notice,” he says. “We’re providing a real nice 360 communication around all our communication and broadcast touch points. It’s achieving the goals we wanted  to achieve, no matter the amount of episodes we produce.”

Deeper behind-the-scenes content has helped further engage fans with traditional sports. While the verdict is still out on the new NBA 2K League content, there is plenty for the esports industry to learn from here.

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Allied Esports Recognizes Opportunity in Mexico With New Partnership

Partnering with TV Azteca, Allied Esports hopes to tap into an underserved esports market in Latin America, particularly Mexico.

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Photo Courtesy Allied Esports

Allied Esports is seeking to grow its presence in Latin America with a strategic partnership with TV Azteca.

The partnership gives Allied Esports direct access to 95 percent of the Mexican market with TV Azteca’s digital channels and 40 local and regional free-to-air stations. With the partnership, TV Azteca is also launching its newest platform, Azteca Gaming, which will debut Allied Esports’ newest production, “Nation vs. Nation.”

Allied Esports CEO Jud Hannigan says TV Azteca’s position as a broadcast leader in Mexico provides them a great foundation for potential growth in Latin America, a relatively untapped market in the esports industry.

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“We’re excited about this first event in a new format as a kickoff,” Hannigan says. “They’re launching Azteca Esports and we’re coming in with this first event, and have plenty of others planned. They’re the top sports broadcaster in the region, so we couldn’t be more excited.”

“Nation vs. Nation” is the company’s first event and broadcast in Latin America, and it features four U.S. players against a Mexican team of 40 players in PlayerUnknown’s Battlegrounds. A trophy and cash prizes were on the line yesterday in Mexico City.

“The transformation process of TV Azteca, to bring the best television, has led to set an eye in new markets, towards an audience that consumes esports,” says Benjamín Salinas, CEO, TV Azteca. “Sports are part of our strength, and now with esports, we find a way to connect with a growing market in Mexico.”

Broadly speaking, this expansion for Allied Esports encompasses Latin America, but there’s a strategic importance specifically to Mexico, Hannigan notes. The country will be a primary driver of the region’s esports growth in the coming years.

According to eMarketer, Goldman Sachs projects the esports industry will bring in revenues of $2.96 billion in 2022. Latin America will make up $100 million of that.

The article reported the slow growth curve in Latin America is based on a lack of fixed broadband, but significant growth is expected in both Brazil and Mexico. Esports and video game revenue in Mexico jumped from $1.2 million in 2014 to an estimated $10.4 million in 2019 and is projected to rise to $20.3 million in 2022, according to Statista.

“Latin America represents a massive and transformative opportunity for Allied Esports,” says Frank Ng, co-CEO, Ourgame Holdings International – the current owner of Allied Esports. “By combining our live events experience with TV Azteca’s unequaled reach as the No. 1 sports network in Mexico, this crucial esports ecology partnership will be a major driver in building out the offline-online environment at the core of Allied Esports’ global strategy.”

The Allied Esports partnership with TV Azteca comes on the heels of sister company World Poker Tour reaching an agreement with the Latin American broadcaster to carry the poker tour’s library of content in March and develop poker-related products for the region’s audience.

As the World Poker Tour develops its localized content, Hannigan said the partners explored opportunities and landed on looking to grow esports in the region.

READ MORE: Blast Pro Series Debuts in U.S. with Fan Focused Esports Tournament

The approach to Latin America through strategic partnerships will mirror how Allied Esports has tackled other regions of the globe, including Asia, Europe and North America. Along with Latin America, Australia is also in this year’s expansion plans.

“From our perspective, as Allied Esports grows, we’re looking at new regions and to affiliate with strong regional partners,” Hannigan says. “They’re really content-driven partnerships.”

Latin America might lag much of the rest of the world in esports popularity, but with the dearth comes opportunity. At least that’s what Allied Esports is banking on.

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