eSports could overtake fantasy sports
March 22, 2016 3:00 AM
by The Analyst
At the recent Nevada Gaming Policy Committee one of the topics briefly touched on was eSports. But the amount of time spent on it could have been measured with a stop watch as the dominant topic of the day was Daily Fantasy Sports, and the conversation on eSports, was somewhat confused with skill-based slot games, leaving eSports largely unaddressed on either subject or platform.
If you are not knowledgeable about eSports, you are in fine company, Governor Brian Sandoval while chairing the committee, admitted his own lack of knowledge on the subject. eSports is teams or persons playing against each other on video games. The sports notion comes in because the better players must have skills in the particular video game along with speedy reflexes and both mental and physical dexterity while maintaining singular focus during the game competition.
It is not a physical power contest, but one of speed-of-dexterity and command-of-game, similar to car racing for the requirements of mental and physical dexterity. The event just happens to reside in the cyber world of a video game rather than the real physical world.
In relevance to future opportunity for Nevada gaming, eSports is a sleeping giant compared to the diminutive pool of fantasy sports. According to Chris Grove, a senior partner at Narus Advisors, who made a presentation about fantasy sports to the committee, there are approximately 3.8 million people participating in fantasy sports in the U.S.
In a separate presentation Nigel Eccles, CEO of FanDuel, suggested the current population of fantasy sports participants is approximately 5 million people. While those are respectable populations, eSports enjoys participant and viewer populations of approximately 40 million in the U.S. and 1.35 billion worldwide and growing.
In terms of time commitment to eSports, according to a study by Juho Hamari and Max Sjoblom, enthusiasts average 2.2 hours per session 10 times a week, which translates to over 1,100 hours per person per year, more than half the time one would spend in a regular 40-hour a week job. Their study also indicated 60 percent of the enthusiasts are between the ages of 21 and 35.
There is also very serious money involved in eSport tournaments. Last year tournament prize pools ranged from $250,000 to over $18.4 million and they show every indication of continuing to grow. eSport tournaments held in large arenas have sold out in less than an hour.
While Nevada has passed skill-based gaming laws and is pretty close to done with the attendant regulations, those regs are designed around gamblers playing slot machines. eSports is better looked at as another event like a golf or tennis tournament. Similar to tennis where a number of the top players are under 21, it would serve Nevada well if the Gaming Policy Committee were to look at eSports as a sporting event where participants can pay an entry fee for participation.
There is no question the sportsbooks would be able to take bets on teams and players just as any other sporting event, but the committee should look at entry-fee tournaments as something other than gambling as it is truly skill-based. And, since the economic opportunity in eSports is over 10-to-1 of fantasy sports, without near the federal legal questions, perhaps the committee should reallocate its time with greater attention to eSports.
Some of the most popular games are Halo, Call of Duty, League of Legends and Dota2 among others. Games are played the same way they would be at home or at a cyber café so every kid with an Xbox or a Playstation could become an eSports superstar.
Perhaps it is reflective of our age of technology that where we used to encourage kids to go outside and play, we now plant them in front of a video game. But as first place prize money is often as high or higher than that of tennis or golf tournaments you might be doing your children or grandchildren a favor by buying them an interactive, multiplayer, team-based video game.
The Analyst is an experienced gaming industry executive who offers insight each week on events and issues affecting the industry. Contact The Analyst at Publisher@GamingToday.com.