This article was first published on Asia Business Law Journal, authorised reprint.
E-sports events are at the heart of the electronic sports industry, bringing together game publishers/operators, event operators, live streaming platforms, clubs and e-sports players.
Approvals and permits
E-sports event participants are required to obtain the following qualifications and licences to engage in industry-related activities in the Chinese Mainland:
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Game publishers/operators: games eligible for e-sports events shall be those that can be legally published and operated in the Chinese Mainland with a game publication number (ISBN) and an approval number. Game publishers are required to obtain an Online Publishing Service Licence, and game operators are required to obtain a Value-added Telecommunications Business Licence, among others.
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E-sports event operators: international e-sports events hosted or co-organised by the Sports Information Centre of the General Administration of Sport of China (CSIC) are regulated using a class-based approach, and a filing should be submitted to the CSIC in advance. In the case of events (international or national) hosted by entities other than the CSIC, the obligations to submit filings or obtain approval vary across different regions. Shanghai requires all e-sports events to be approved like sports events; Chengdu and Xi’an only require filings to be submitted according to the specific regulations of the hosting district; while other places like Beijing, Hangzhou, Suzhou and Wuhan do not require special approval from, or filings to, the sports authorities. However, considering that offline e-sports events are performances, the operator of the e-sports event needs to obtain a Commercial Performance Permit, and to organise a specific offline event, there are obligations to obtain permits from or submit filings to the departments of culture, health, fire protection, public security, etc., in accordance with the requirements imposed on commercial performances/large-scale activities.
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E-sports live streaming platforms: e-sports live streaming platforms need to obtain relevant licences to engage in live streaming business, including the Value-added Telecommunications Business Licence, Network Culture Business Licence, Licence for Dissemination of Audio-Visual Programmes through Information Network, etc.
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E-sports clubs and e-sports players: e-sports clubs and e-sports players may register with the regulator on a voluntary basis, but unregistered e-sports clubs and players are not allowed to participate in international, national and regional e-sports events approved by the CSIC, the All-China Sports Federation, and sports authorities at all levels across the country. To register, an e-sports club shall have at least five registered players, with the registration submitted to the local sports authority. E-sports players need to register with the provincial sports authorities in their places of residence or place of hukou registration, and e-sports players must be at least 18 years old to be eligible for e-sports events. Local e-sports associations might impose special eligibility criteria on clubs and players for registration.
Industry practices
In addition to the necessary licences/qualifications required for the distribution/operation of games and the holding of e-sports events, the content, publicity and promotion of games and events should comply with laws and regulations, and the operators of games and events should focus on provisions and requirements related to the collection and use of personal information and the protection of minors, conduct necessary content review and classification in accordance with relevant laws and regulations, establish management systems and protection mechanisms, and take necessary technical measures.
Second, clubs and members of clubs participating in e-sports events (including but not limited to coaches, managers, owners, starting players, substitute players, trainees, etc.) shall abide by the rules issued by the event organisers.
The rules vary from event to event, but generally include league schedules and a prize pool, team member eligibility, official roster changes (rules regarding player substitutions, including transfers or loans between teams, signing or releasing players, and promoting, demoting or loaning players), requirements on players’ equipment, league format, game process, online competition rules, code of conduct for players and clubs (including restrictions on players’ competitive behaviour, unprofessional/improper behaviour and club business behaviour, and no violation of financial fairness regulations), punishment, etc.
Third, since the majority of the income of the e-sports industry in the Chinese Mainland is from live streaming, e-sports practitioners engaged in live streaming should also strictly abide by various laws, regulations and code of conduct related to live streaming.
These laws and regulations include, among others: the national and local laws and regulations; the code of conduct issued by the event organisers; the Code of Conduct for E-sports Streamers jointly issued by the e-sports industry association and other norms issued by e-sports industry associations; the rules and management norms issued by the e-sports live streaming platforms; the articles of association and processes of the e-sports clubs; and the contracts signed with the e-sports clubs, etc.
For example, they are not allowed to publish harmful content prohibited by laws and regulations, or bloody, shocking, cruel and other content that may cause physical and/or mental discomfort, encourage minors to imitate unsafe behaviour, violate social morality, or induce minors to develop unhealthy habits.
E-sports clubs are also not allowed to make speeches that infringe on the reputation, privacy, intellectual property rights, or other lawful rights and interests of others.
Intellectual property rights
The ownership and use of any form of intellectual property rights involved in games and e-sports events (including but not limited to game software, written works, audiovisual works, artworks, musical works, etc.) can be agreed on through contracts.
Therefore, it is important to sign a complete and clear written contract for the ownership and use of relevant accounts and intellectual property rights, especially between e-sports clubs and e-sports players where disputes arise frequently in practice.
As to the accounts, according to current industry practice, the organiser of the e-sports event will provide players with a special account for the competition, with the player’s personal game account registered and used by the player, and the club not usually involved in the use of that account.
For social media accounts, the platform that provides the account and services usually stipulates that the ownership of the account belongs to the platform, and the user registering the account obtains the right to use the account and related property rights.
As public figures, the social media accounts of e-sports players also have high commercial value, and for the purpose of marketing promotion and maximisation of commercial value, such social media accounts may be jointly operated by clubs and players.
Therefore, the contract between e-sports clubs and e-sports players needs to clearly stipulate the account use rights, the entitlement to the proceeds, the operation and management authority of the account, the disposal of the account and the contents posted in the account when the player leaves the club.
During the event, a series of text works, photography/artworks, audio and video recordings, audiovisual works and other content related to the clubs and the players will be generated, and the player’s name (including real name and professional ID, social media account ID), portrait, voice, as well as the club’s name, trademark, brand, logo, etc., will be used.
The intellectual property rights of the content created by the club and published on the club’s official account are usually owned by the club, but the ownership of the intellectual property rights of the content created by the club and the player together and published on the player’s personal account may become a subject of dispute if it is not expressly defined in the contract.
Therefore, the contract shall clarify the ownership of the intellectual property rights of the content generated during the performance of the contract, the respective rights to use and restrictions for both the club and the player, the licensing of each other’s rights, and whether the content already published in the accounts can be retained, and how this content can be used after the player leaves the club.
E-sports, which combine the attributes of competitive sports and entertainment, have grown into a sport and cultural phenomenon. As the industry develops, the co-operation of various participants will become more diversified and complex, which will inevitably lead to more complex legal issues and disputes.
The author will closely follow the development of laws and regulations, industry policies, market development and business practices of the e-sports industry to provide legal support to protect the legitimate rights and interests of all parties involved in the e-sports industry.