January 28th, 2016
Via Forbes, an interesting look at eSports:
The business of eSports (video game competitions) is on pace to explode in 2016, which is reinforced by recent reveals of eSports platforms on Twitter and ESPN. Brands are starting to catch up to the hype surrounding eSports and companies are seeking to find ways to exploit major growth in the space.
One such enhancement to the eSports space has come in the form of adding ancillary features to game play.Gaimerz, a peer-to-peer (P2P) platform, is a company looking to add a bit of spice to eSports competitions by providing a service that enables gamers to post, participate and wager on their favorite games .
Gaimerz facilitates the payment of winnings to the winner of the eSports competition. It intends to earn money from charging users a subscription fee for its service as well as a percentage of amounts that are staked on games.
The key difference between Gaimerz and standard betting operations is that Gaimerz is not “the house” — users are not betting on the outcome of third party competitions against a spread. Instead, users are restricted to wagering on the outcome of games they compete in themselves (Gaimerz labels them as skill-based games) and not on the outcomes of matches in which they may not be involved.
Wagering is a touchy subject in the U.S., with state attorneys general in New York, Illinois, Texas and Hawaii recently taking the position that daily fantasy sports operations are outright illegal based on existing state gambling laws. Gaimerz takes the position that it complies with various state laws by limiting wagers to those participating in the eSports competitions — you can bet on yourself to win the match-ups but not on others.Gaimerz has obtained a legal opinion that looks at both U.S. federal laws and relevant state laws on the subject matter. Because Gaimerz’s platform does not include “the staking or risking by any person of something of value upon the outcome of a contest of others, a sporting event, or a game subject to chance,” it has been deemed that the Unlawful Internet Gaming Enforcement Act (UIGEA) does not apply. Gaimerz is also operating under the assumption that the activities contemplated by it would not be deemed a “sporting event or contest” and thus not prone to Wire Act scrutiny. Its legal counsel has further advised that the platform should not run afoul of the Illegal Gambling Business Act (IGBA), Travel Act nor the Interstate Transportation of Wagering Paraphernalia Act (ITWPA).However, Gaimerz is taking a somewhat conservative approach with its launch within the U.S. It began in December 2015 by only operating in New York, New Jersey, Virginia, California, Pennsylvania, Ohio, Georgia, Michigan and North Carolina. The company feels comfortable that its platform does not consider chance to be a material element in the outcome of eSports competitions and that it certainly is not a predominant element in the subject games. Thus, New York is included on its list of permissible jurisdictions despite the ongoing legal battle between the New York State Attorney General and FanDuel/DraftKings.
Like much of the eSports industry, Gaimerz is still in its infancy. It was introduced to certain U.S. states as of December 2015 and has been busy acquiring a user base over the past few weeks. It is additionally focused on partnering with video game developers to create strategic relationships as it grows its platform.
Gaimerz has recently managed to speed up its internal process of automating results by purchasing its own servers for several games and implementing scripts direct from those servers back down to its site. From mid-February through the start of March, Gaimerz plans to be able to run games with a full automated results process. However, it will continue to seek to engage game developers throughout.
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