The Positive and Negative Aspects of eSports Team Sponsorships by Bookmakers

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KEY TAKEAWAYS:

• Partnerships, such as betting partnerships, are the most efficient means of increasing brand exposure in eSports.
• With regulations differing from nation to nation, the global scope of competitive gaming events in eSports is expected to make gambling sponsorships considerably more difficult in the future.
• eSports’ commercial profits have skyrocketed as a result of online gambling companies entering the sponsorship market.

Photo: eSports bootcamp in Waiblingen, Germany (https://unsplash.com/photos/a-group-of-people-playing-a-video-game-fK5Oomnc-Wk)

In the past, several of the most well-known betting brands have sponsored or collaborated with eSports organizations. Gambling companies are making significant strides in the competitive video gaming industry by establishing in-house eSports teams and sponsoring important tournaments. Partnerships are the most efficient means of increasing brand exposure in eSports, and the technology industry is a valuable market. Numerous well-known companies in the sector have engaged in such endeavors. In an attempt to establish themselves as leading eSports betting platforms, these businesses have teamed up with eSports teams and event organizers.

Similar endeavors have previously been successful for the casino industry. Also, for many years, sportsbooks have dominated the sports deals in European football competitions. As for the specific regions, they are currently focusing on eSports organizations in Asia, Europe, and North America. However, do betting partnerships have more benefits or disadvantages in the eSports industry? Let’s investigate.

Why eSports Betting Sponsorships Exist?

The financial gain is the major reason why the majority of eSports businesses collaborate with bookmakers. It’s common sense. Millions of dollars are paid by sportsbooks and casinos to have their names and logos linked to well-known eSports organizations. On the other hand, even if the eSports sector is already worth billions of dollars, it still has a lot of space to expand. Up until three years ago, gaming collaborations were early adopters; thus, strong partnerships might hold up well over the course of a decade.

Sponsorships of eSports teams have already shown their worth in the consumer electronics sector. For more than 10 years, peripheral gaming equipment makers like Logitech, Razer, and HyperX have valued competitive cameos. When eSports began to challenge the mainstream, lifestyle companies like Nike and Puma were ready to join the trend.

Even though the potential benefit makes every effort valuable, poor marketing choices might cause controversy rather than improve the company’s reputation among eSports fans. Mercedes-Benz’s first appearance in Dota 2 swiftly became a meme, and any ad by them got negative feedback. By partnering with an established eSports brand, many of the particular difficulties associated with attracting gamers are avoided. No marketing team will ever be as culturally informed as multi-game giants like G2 Esports, Fnatic, and Ninjas in Pyjamas. Fans will value the company’s contributions to the scene, so they should let eSports organizations handle the representation.

How the eSports Sponsorship Scene Is Being Affected by Betting Companies

As said, it shouldn’t be surprising that betting platforms have recognized prospects given the eSports market’s continued rapid expansion. Because of this, bookmakers, both endemic and non-endemic, are quickly altering the sponsorship scene, much like betting partnerships currently control the majority of traditional European sports.

There are continuous discussions about the appropriateness of betting sponsorships in traditional sports, and nations like the UK have implemented a number of restrictions on advertising, restricting who can appear in them and restricting advertisements to the time of matches (which was only permitted to safeguard sport funding). The most recent limitation prohibits the placement of signs and emblems from betting sites in front of team jerseys. As a result, betting companies now have very little room to advertise around sports. However, many sports clubs do benefit from the lucrative sponsorship opportunities that the sports betting industry offers.

With regulations differing from nation to nation, the global scope of competitive gaming events in eSports is expected to make gambling sponsorships considerably more difficult in the future. Uncertainty has already occurred in the eSports betting industry. As a prime example, we’ll mention this: after a CS: GO coach was penalized by the Esports Integrity Commission in 2021 for integrity violations, the betting company GGBET stopped sponsoring Heroic.

Esports’ commercial profits have skyrocketed as a result of iGaming (the industry’s preferred word for online gambling) companies entering the sponsorship market. This may also indicate that the general public’s opinion on competitive gaming is shifting and that more people are paying attention to the scene. Despite certain setbacks and controversy, this industry is here to stay, with organizations creating new revenue streams as well as sponsorship deals flowing in across Counter-Strike 2 and Dota 2. These two games are among the so-called “Big Three”, along with League of Legends, whose teams and organizations are most frequently featured on eSports sites’ betting markets and, in general, attract the greatest attention from iGaming businesses.

CS2 accounted for 56% of the 2023 eSports betting turnover. League of Legends (24%) and Dota 2 (14%), come next. Out of the most popular leagues in Counter-Strike betting across the company’s network, Intel Extreme Masters accounted for 10%, while the ESL Pro League earned 9% of the title’s betting turnover in 2023.

Examples of Well-Known Betting Agreements in the eSports Industry

Counter-Strike 2 is the most appealing. There are several reasons why CS2 is the target of the majority of eSports betting sponsorships. The geographic audience of the title is a significant contributing aspect. Because gambling is prohibited in China and South Korea, it’s impossible to reach these audiences. Due to the complicated state-by-state restrictions in the USA, games that cater to audiences outside of these areas—like Europe—are much more desirable to possible betting sponsors. CS2 remains the frontrunner after this.

If you’ve been following the news lately, you’ve probably seen that 1xBet is the bookmaker that has managed to take up a significant portion of the sponsorship market in eSports. Since 2021, the betting site has partnered with ESL, one of the largest eSports championship organizers in the industry. Given that ESL hosts leagues for Dota 2 and CS2, the agreement was viewed as a major collaboration between the sportsbook and the organizer. Because 1xBet consistently runs promotions for tournaments with gaming prizes up for grabs, such as gaming computers or CS2 skins, the bookmaker’s clients benefit from this partnership.

By partnering with MIBR, a well-known brand in Counter-Strike, 1xBet expanded its presence in the fervent Brazilian eSports sector. Given OG’s track record of several major championship wins, the cooperation with this organization, another legendary team, particularly in the Dota 2 scene, solidified 1xBet’s position at the biggest eSports tournaments. Take 1xBet’s financial support of Tundra Esports, a Dota 2 squad renowned for its prowess, as another example, frontrunning the community which has millions of active players and followers.

BLAST Premier, the eSports series for CS2, has developed a deeper relationship with bookmaker Betway. BLAST Premier incorporates Betway’s branding throughout its broadcasts in addition to a variety of content activations that highlight the bookmaker. Significant changes in US esports betting occurred in 2021, creating opportunities for sponsorships. Most notably, FaZe Clan, a well-known gaming and esports organization in North America, has partnered with DraftKings. One of the most well-known eSports betting team sponsorships to date, the agreement also includes sponsorship across each player’s individual channels.

League of Legends is perhaps one of the most stringent games when it comes to betting sponsorships. The competition rules prohibit the display of gambling brands, even though many League of Legends organizations have betting partners. The majority of these collaborations, like Fnatic’s with Parimatch, are therefore directed at the organizations’ other teams. Riot Games, the most active LoL tournament organizer, dictates these rules. Unofficial reports state that Riot Games will permit betting companies to sponsor professional League of Legends and VALORANT teams beginning in 2025. Gambling companies that want to sponsor teams, meanwhile, will have to get Riot’s permission first, and they won’t be able to put their insignia on teams’ uniforms.

What Does eSports Stand to Gain From Mainstream Betting Sponsorship?

There are several benefits and drawbacks to finding an eSports betting partner. The benefits eventually revolve around creating more revenue streams, putting more pressure on the industry to maintain fair play, and giving eSports more credibility as a respectable skill-based competitive activity. The following explains why all the main eSports organizations and developers allow gambling money to pour in.

Funding Expensive eSports Events

It’s not exactly economical to fund an eSports competition. The event’s organizers have to invest a lot of money in marketing. They may need to purchase equipment, rent spaces, and pay for management, security, taxes, and consultancy. By taking money from betting companies, eSports organizations can effectively plan competitions. For the same reason, we’ll refresh your memory, well-known bookmaker 1xBet collaborates with ESL, one of the largest eSports promoters in the business. CS2 and Dota 2 contests are organized by ESL. The firm that created Half-Life and Left 4 Dead, Valve Corporation, is the owner of both of these games. Two well-known eSports leagues are run by ESL. It costs a lot of money to operate effectively.

Nowadays, the majority of people watch eSports for free online. Therefore, the primary source of revenue for ESL and other organizers is brand sponsorships. Despite having numerous sponsors, eSports leagues still need to constantly come up with new ways to generate revenue. Taking sponsorships for gambling is a great strategy to boost income.

Establishing eSports as a Legitimate Sports Discipline

The question of whether eSports qualified as a legitimate sport or not was up for dispute five to six years ago. The fact that video game tournaments didn’t draw major companies was one factor that diminished eSports’ status as a sport. Thankfully, companies now value competitive video games. Many corporations are investing money to be linked with eSports, ranging from Toyota and Coca-Cola to YouTube and Twitch.

These collaborations lend eSports legitimacy. A Fortnite competition supported by Mercedes, Toyota, and top betting companies is expected to draw millions of viewers. Professional competitions are organized with funding provided by brands. Players are paid with a portion of the funds. Fans of eSports typically like watching tournaments with large payouts. Consider the Fortnite World Cup or any other significant ESL event. Talented eSports players are drawn to big money. Additionally, professional gamers unite the fans.

It Aids Bettors in Finding Trustworthy eSports Bookmakers

Betting firms have been offering betting markets throughout big tournaments since eSports became a legitimate sport. In fact, several bookmakers provide new customers who wish to wager on FIFA 23, Dota 2, Call of Duty, and CS2 free bets.

How can one find a reliable eSports betting website?

Start by looking at the betting websites that support the eSports competitions you like. eSports games are for sure supported by these platforms, such as those for CS2 eSport betting. It’s logical. After that, assess them according to their odds, bonuses, and payment methods, among other things. Check out Twitch casino streamers if you enjoy sports betting. Learn how to play poker, blackjack, and slots and win. Additionally, it might be enjoyable to watch professional gamers on Twitch even if you don’t intend to play casino games. Some of them stream slots as well as video games. You can then choose whether to concentrate on video game content. Or, you may alternate between slots and video games.

The Negatives of eSports Betting Sponsorships

Major US sports teams and leagues were fighting against the legalization of sports betting not long ago (in 2018). Many lawmakers, as well as the NCAA and NBA, have voiced concerns that allowing sports gambling would harm eSports, football, basketball, and hockey. Video game tournaments can now be sponsored by betting organizations since sports betting is permitted.

The morality of potentially pushing gambling to an inappropriate audience, the effect this has on fan trust, and the possible harm to eSports’ reputation should unfavorable betting sponsors enter the market are the drawbacks, however.

What specific dangers are there?

A Rise in Problem Gambling

Sponsorships for gambling give casinos and sportsbooks a lot of exposure. Increased visibility translates into more clients. Regretfully, the number of potential addicts rises as more people bet online.

Leaders and the general public in nations like the UK are very concerned about problem gambling. The government has been imposing more stringent regulations on internet betting in an effort to address the problem. Regretfully, not all people reside in nations that deal with gambling addiction. This implies that many individuals who struggle with gambling addiction might never get the assistance they require.

Bringing Gambling to Young Fans’ Attention

If there’s a sport for young people, it’s eSports. The usual pro gamer is 22 years old, whereas the average eSports fan is 26. The younger audience is more vulnerable to dangerous betting, even though older individuals do watch video games online. Players as young as 14 years old may become tempted to wager after watching betting advertisements on YouTube and Twitch. This is particularly true if their favorite Twitch streamers are endorsing the advertisements.

These days, a lot of bookmakers have policies in place to stop children, i.e., minors, from betting illegally. However, it’s easy to get around some of these restrictions in this technological age. Furthermore, there are skin-betting websites available for young players to be concerned about. Players of all ages are typically welcome on skin-betting sites. Furthermore, a lot of them fail to take appropriate precautions to keep young eSports enthusiasts safe.

Sponsorship Complications in Countries Where Gambling Is Illegal

Furthermore, sponsorship presents additional challenges in nations where gambling is outright forbidden. A few nations where this is imposed, including South Korea, have significant eSports markets.

As with traditional sports, this might lead to problems for tournament organizers about possible streaming rights. One prominent example is the 2005 switch from Brains (the beer firm) to Brawn as the Welsh rugby team’s sponsor for specific matches in France.

Even though this was entertaining, it raised more concerns about the industry and how people view it in general. It’s quite challenging to adhere to international eSports betting legislation because eSports has such a global reach and audiences are much more dispersed.

Let’s sum up the pros and cons of betting sponsorship in eSports:

What Problems Arise While Navigating (Betting) Sponsorship Limits in eSports?

It can be challenging to understand the regulations in the diverse world of eSports. For smaller organizations, sponsorship limitations pose serious obstacles that frequently draw attention to the lack of other important sources of income. It isn’t always feasible to pursue sponsorship from certain sponsor categories, such as gambling and alcohol brands, which frequently have the largest budgets, depending on the league or sport in which an organization competes.

Similar limits are used in traditional sports; thus they aren’t exclusive to the eSports sector. As previously stated, clubs in the Premier League of English football have decided to ban gambling sponsors off the front of their shirts, and this will begin for the 2026–27 season. However, since the industry concentrates on eSports’ vibrant, young audience (we explained that above in the text), these bookies might continue to be ideal partners for titles like CS2 or Dota 2, which indisputably permit gambling sponsors.

What Regulations Govern eSports Betting Sponsorships?

The regulations are set by organizations, competitions, and developers. Certain sponsorship categories—such as gambling, alcohol, tobacco, guns, and other high-risk financial products—are frequently restricted. Certain settings do offer a “broader church” for more extensive sponsorship categories. Call of Duty and the Overwatch League, for instance, allow gambling sponsors. With the most well-liked Dota 2 competitions and Counter-Strike 2 teams frequently backed by gambling partners, game developer Valve also takes a more laid-back stance.

This alignment with gambling sponsors contrasts with Riot titles’ redoubled efforts to exclude gambling sponsors, something we already mentioned, from League of Legends, one of the most popular titles in eSports, and VALORANT. Riot’s competition rules still prohibit gambling, sportsbooks, and casino companies from sponsoring tournaments, among other things. Teams weren’t allowed to display sponsorships from fantasy eSports operators, cryptocurrency, political campaigns, or certain alcohol goods, among other things, according to the 2023 LEC rulebook, which governs the League of Legends championship authorized by EMEA.

Understanding the regulations governing your operating environments is crucial, particularly if your company has several divisions. As a result, depending on the area in which the eSports teams compete, sponsorship laws may change slightly.

Conclusion

It’s easy to overlook the extra challenges that eSports organizations face in securing partnerships, given the state of the macroeconomy. eSports organizations face substantial operational limitations due to the gaming industry. These include stringent rules governing competitiveness and sponsorship limitations that need to be properly handled.

Although many of these regulations are rightfully intended to safeguard the wide range of consumers that eSports draws, these principles ought to be upheld. However, in order for many organizations to survive in the ecosystem, they must increasingly turn to non-traditional sponsorship sources, such as betting.

It’s certain that the sensitivity of betting and the young audience of eSports will always be a source for concern, but overall, eSports gambling sponsorships have the ability to improve the industry as a whole because of the financial advantages they offer. The industry’s biggest worry is that it may or may not have become dependent on money from betting sponsorships (it seems that it’s very much dependent at the moment); if this were to change, teams and leagues would be unpleasantly struck and look for other sponsors in panic.