Regulators are there to bridge the gap between an industry and the law. They understand how to apply legislation to scenarios, but it can be difficult to stay ahead of emerging technology and trends, especially with how fast everything moves nowadays. It took centuries to transform casinos into online platforms, but only a few years for these to accelerate into cryptocurrency hubs, illegitimate dupes of legal casinos and even AI dealers.
With so many new aspects to consider, it can be easy for lawmakers and commissions to simply reject anything that does not fit the mould of 'traditional' casinos or sports betting. After all, the unknown is scary and there is undeniably a lot of illegal offshore activity lapping at the regulated industry at all times.
But this comes with the risk of sweeping emerging legitimate sectors under the rug. One notable example of this is esports.
A total of 39 US jurisdictions have launched sports betting in recent years, yet only 19 allow players to bet on esports. 13 states have outright prohibited it, while another 19 fall into a legal grey area as they lack any specific esports regulation whatsoever.
This makes it difficult for players to keep track of what is legal and what is not. Many young players see esports as synonymous with sports, so they may not even realise that there are different legislations for both.
One supplier, Oddin.gg, has taken it upon themselves to open up conversations with regulators to educate them on the realities of esports and its countless caveats. It has also worked closely with the International Betting Integrity Association (IBIA) to help reassure regulators that esports is a credible vertical.
After all, the esports tournaments already have strict integrity measures in place to catch any instances of malpractice, which were implemented long before betting was regulated on the games.
Many of these esports leagues have millions of dollars in their prize pools, with the CS2 Esports World Cup 2025 reaching $1.25m.
This does not come without its risks, however.
Esports may be synonymous with sports for some, but they are also linked to shady betting practises by others.
Skin gambling has long been associated with esports, and many regulators have begun cracking down on these sites in particular within the last two years.
In 2024, a CSGO Major tournament was disrupted when audience members rushed the stage. According to reports, a well-known skin gambling site encouraged fans to storm the stage after its rival had signed a lucrative contract.
The trophy was damaged, the tournament was delayed, the players were shaken up and the event organisers stated they would be pressing charges.
Several teams and players completely cut ties with the gambling site following the stunt, and the CEO of one of the teams went on a foul-mouthed rant on social media.
So, it certainly remains a delicate subject at the moment.
But if players want to gamble on esports games, they will find a way - even if that is not on the regulated market.
While these regulated gambling operators will have more industry insight than the authorities, as long as any company could profit from influencing regulations, any advice or knowledge they share cannot be considered truly weightless.
As esports continues to mature as a vertical, regulators may benefit from communicating with companies that have specialised in the market for many years. But these companies can only advocate for the genre so much; until the esports leagues are completely severed from websites that regulators may find problematic, we may continue to see more opposition than collaboration.
Many fans applauded PGL Esports for its heavy-handed approach to skin gambling websites disrupting the event, perhaps indicating that customers are also resisting illegitimate sites
