ESports Legal Challenges

Esports, or electronic sports, have established themselves as one of the most promising industries in the world of entertainment and sports. With millions of fans and a growing market, electronic gaming competitions have attracted both investment and debates about their official recognition as a sport and the need for specific legal regulation. The gaming industry has already surpassed cinema and music in terms of revenue. Estimates indicate that the gaming sector generates between 120 and 160 billion dollars, depending on the source and study. The numbers don't lie: the games market surpasses the film and music industries combined. In Brazil, the growth of esports is also accompanied by legal challenges, especially regarding the regulation of organizations and competitions, players' rights, among others, which is why this article seeks to analyze the legal trends of the sport in the country. At first the main question is: can esports be considered sports? Experts and scholars disagree. On the one hand, it is argued that esports share fundamental characteristics with traditional sports, such as competitiveness, disciplined training and involvement in organized competitions.

A point of support for this argument is the growing involvement of international sports federations in esports, in addition to recognition in major global events, such as the 2022 Asian Games, and the first edition of the Olympic Esports Week that took place in 2023.

Furthermore, the International Olympic Committee (IOC) approved the creation of the esports Olympic Games, the first edition of which will take place in 2025. On the other hand, there are those who argue that the lack of intense physical effort, a hallmark of traditional sports, prevents the full recognition of esports as a sport. In Brazil, the debate remains fierce, without there being, to date, a consensus on the legal status of esports, especially because the Pelé Law, which defines general rules for sport, does not expressly provide for its application to the sport.

In turn, the General Sports Law defines that sport is “any form of predominantly physical activity that, informally or organized, aims to practice recreational activities, promote health, achieve high sporting performance or entertainment” . Bill 205/23 is being processed in the Chamber of Deputies, which seeks to define esports as a sporting modality for all legal purposes.

In any case, Brazilian sports legislation can be used, albeit in a subsidiary way, to guide some aspects of esports, such as contracts between players and organizations, competition management, and even the application of sanctions in competitions, especially since there is no legal prohibition.

Therefore, the Pelé Law can be used to regulate the transfer of players, especially to protect their rights in transactions with esports clubs or organizations. The labor rights of esports players constitute one of the most sensitive aspects of regulation in this sector.

In Brazil, for a relationship to be characterized as employment, the requirements set out in article 3 of the Consolidation of Labor Laws (CLT) must be present, which are: (i) work performed by an individual; (ii) with personality; (iii) through subordination; (iv) in a non-eventual manner; and (v) with remuneration.

In a quick analysis of the relationship between esports athletes and their organizations, many of these requirements are met, especially when training and dedication are on par with professional athletes from other sports.

In many cases, players provide services on an ongoing basis, obeying rules and training established by organizations, which characterizes subordination and non-eventuality. Furthermore, remuneration is guaranteed through salaries and bonuses, which also meets the onerousness criterion.

Thus, although it does not have a specific provision for the modality, the CLT can be applied in a similar way, so that the relationship between esports athletes and organizations can constitute an employment relationship, guaranteeing players rights such as vacation, 13th salary, retirement fund, Length of Service Guarantee (FGTS) and other labor benefits.

In view of the above, it appears that esports are at a prominent moment in Brazil and around the world, but they still face a series of legal challenges. Formal recognition as a sport is a fundamental point that needs to be overcome by our society, since the legal system must follow the evolution of esports and guarantee the protection of the rights of everyone involved with the sport.

Source: Dra. Bárbara Mengue Chelski