Our article addresses the fundamentals of esports law, explaining the legal position of esports, the actors of the ecosystem, the game publisher's intellectual property sovereignty, the institutional structure under the Turkish Esports Federation, tournament permissions and the means of dispute resolution.
Digital games, once regarded merely as a form of entertainment, have today turned into a global industry followed by millions of viewers, in which professional players take part and in which prize pools worth millions of dollars circulate. Türkiye is not outside this transformation; in our country there are thousands of licensed esports players and millions of viewers. However, this rapid growth has also brought with it legal questions that are unique and that often do not fit the moulds of traditional sports law. Players who become professional at a young age, online tournaments that recognise no borders, the decisive role of the publisher companies that own the game and the revenues flowing through digital platforms render esports law a field of its own. This article is the first of our three-part esports law series and addresses the fundamentals of the field. Our article explains how esports is positioned in legal terms, the actors of the ecosystem, the intellectual property sovereignty of the game publisher, the institutional and normative structure in Türkiye, the permissions relating to tournament organisation and the means of dispute resolution.
1. The Concept of Esports and Its Legal Position
Esports, an abbreviation of electronic sports, refers to the playing of digital games at a professional level, in a competitive manner and within the framework of organised tournaments. For an activity to be characterised as esports, it must take place, beyond individual entertainment, in a rule-bound, organised and competitive structure. The legal position of esports carries both similarities to and fundamental differences from traditional sport. Its similarity to traditional sport shows itself in the existence of professional players, clubs, transfers, sponsorships and tournaments. However, the basic and decisive difference separating esports from traditional sport is that the game played is not a public good, but a product of intellectual property owned by a company. While no company holds the rules of football or basketball in a monopoly, all the rights of an esports game belong to the publisher company that develops it. This single difference alone explains why esports law differs so greatly from traditional sports law. Esports, in this respect, is a hybrid field of its own, lying at the intersection of sports law, intellectual property law, contract law and information technology law.
2. The Actors of the Esports Ecosystem
The esports ecosystem consists of numerous actors related to one another within a complex web of rights and obligations. The correct understanding of these actors and of the relationships between them is fundamental to grasping esports law. At the centre of the ecosystem is the professional player; the player, who puts forward their talent and labour, is the visible face of the ecosystem. The clubs or teams to which players are attached are structures that bring players together, prepare them for competitions and manage commercial value. The publisher that owns the game is the most powerful actor of the ecosystem; because all the intellectual property rights of the game played belong to it and the organisation of tournaments is subject to its permission. Tournament organisers are the structures that organise and conduct the competitions; these may sometimes be the publisher itself, sometimes independent companies. Sponsors are the commercial actors that provide financing to the ecosystem and obtain brand visibility in return. Broadcasting platforms are the media that deliver competitions to the viewer and constitute an important revenue channel. Finally, federations are the public or semi-public structures that regulate and institutionalise the field. The relationship between each of these actors is regulated by separate contracts, and each relationship gives rise to legal problems of its own.
3. The Intellectual Property Sovereignty of the Game Publisher
The most fundamental element separating esports law from traditional sports law is the intellectual property sovereignty of the game publisher. An esports game is the work of the company that develops it, and this company holds exclusive intellectual property rights over the software, visuals, characters, rules and brand of the game. The practical consequence of this sovereignty is exceedingly broad. The publisher has the authority to determine how the game will be used in a competitive environment, which tournaments may be organised, to which rules these tournaments will be subject and how broadcasting rights will be used. While in traditional sport no actor holds such a monopoly right over the playing of football, in esports the publisher is in this position. This means that all actors in the esports ecosystem are subject to the framework determined by the publisher at the very top. A club, an organiser or a player, however powerful, must comply with the rules arising from the publisher's intellectual property rights. For this reason, when assessing any activity in esports law, the first question to be asked is what the rules laid down by that game's publisher are. Publisher sovereignty is the basic ground upon which esports law is built.
4. The Turkish Esports Federation and the Institutional Structure
In Türkiye, the institutionalisation of esports is taking shape within the framework of the Turkish Esports Federation. The Federation is the basic institution that regulates esports activities in our country, that carries out licensing, registration and transfer procedures and that brings an institutional structure to the field. The existence of the Federation ensures that esports activities are conducted within a certain order and standard. Within the framework of the Federation, players obtain licences, clubs are registered and transfer procedures are recorded. This institutional structure serves to make the esports ecosystem cease being a scattered and unsupervised field and to attain a rule-bound and foreseeable structure. The regulations of the Federation may cover a broad field, from the relationship between the player and the club to tournament organisation, from transfer procedures to dispute resolution. That all actors operating in the esports field in Türkiye closely follow the Federation's regulations and comply with these regulations is important as regards the prevention of legal risks. Another important function of the institutional structure is that it offers a framework as regards the recognition of esports at the international level and the representation of our country's players in international competitions.
5. Tournament Organisation and Organisation Permissions
The organisation of esports tournaments is a process more complex than it appears, requiring the obtaining of more than one legal permission and approval. The first and most basic requirement that a person or organisation wishing to organise an esports tournament must satisfy is to obtain permission from the publisher that owns the intellectual property of the game. Organising a tournament using a publisher's game without its permission means an infringement of intellectual property rights and may give rise to serious legal consequences. Publishers determine detailed policies relating to the organisation of tournaments, and these policies are binding on organisers. Second, obtaining the necessary permissions from the federation may come onto the agenda in order to organise a tournament within an official framework in Türkiye. Third, particularly where public and ticketed events are concerned, the supervision of the local civil authorities comes into play; in this context, matters such as security, health measures and age restrictions must be observed. That an organiser wishing to organise a tournament plans this three-layered permission structure from the outset and obtains each permission in due form is mandatory for the event to remain on legal ground. The absence of permissions may lead not only to the cancellation of the tournament, but also to serious claims for compensation.
6. Broadcasting Rights and Digital Platforms
Another important aspect separating esports from traditional sport is the manner of broadcasting and viewing. Esports competitions reach millions of viewers live, predominantly through digital broadcasting platforms. This broadcasting activity constitutes one of the most important revenue sources of the esports ecosystem and brings with it complex legal questions. Where broadcasting rights are concerned, many layers are intertwined. First, the intellectual property rights over the image of the game belong to the publisher; therefore, the broadcasting of a competition involves a use relating to these rights of the publisher. Second, the organiser conducting the tournament may have rights over the broadcast. Third, the players' rights over their own performances and images come into play. In this multi-layered structure, to whom the broadcasting rights belong, how they will be used and how the revenues will be shared must be clearly regulated in the relevant contracts. Leaving broadcasting rights uncertain may lead to serious disputes between the actors in the ecosystem. The legal management of this field requires both intellectual property law and contract law to be assessed together.
7. Sponsorship and Commercial Relationships
One of the most important financing sources of the esports ecosystem is sponsorship relationships. Brands make significant investments in this field in order to reach the young and digital-native audience of esports; in return, clubs, players and tournaments stay afloat with this financing. Sponsorship relationships constitute the basis of the commercial dimension of esports law and require careful legal regulation. In a sponsorship contract, the rights that the sponsor will obtain in return for the financing or in-kind support it will provide must be clearly defined. These rights may cover a broad field, from brand visibility to logo use, from players' social media posts to promotional activities at events. A matter requiring particular attention in sponsorship relationships is the possible conflicts between the rights of different sponsors; for example, a brand conflict may arise between a club's main sponsor and an individual player's personal sponsor. In order to prevent such conflicts, exclusivity provisions and conflict resolution mechanisms must be carefully regulated in sponsorship contracts. The sound conduct of sponsorship relationships is of vital importance as regards the economic sustainability of the esports ecosystem.
8. The General Framework of the Player-Club Relationship
At the heart of the esports ecosystem lies the relationship between the player and the club. Although this relationship will be addressed in detail in the second article of our series, it is useful to set out its basic framework at this stage. The relationship between the player and the club rests on a contract, and this contract determines the rights and obligations of the parties. In Turkish law, the legal nature of the contract between the esports player and their club is an important matter of debate and is generally accepted to be in the nature of a service contract. This characterisation is important as regards determining the legal regime applicable to the contract. In the player-club relationship, the player's participation in competitions and the club's provision to the player of the necessary equipment, training and remuneration constitute the basic obligations. This relationship has dynamics of its own; players frequently changing teams in esports, the intensity of transfers and the importance of the termination and penalty clauses in the contracts distinguish this relationship from traditional employment relationships. The sound establishment of the player-club relationship is decisive as regards the protection of the interests of both parties and the prevention of possible disputes.
9. Means of Dispute Resolution
The dynamic and multi-actor structure of the esports ecosystem inevitably brings disputes with it. Various disputes may arise between the player and the club, between clubs, between organisers and publishers or in sponsorship relationships. More than one means may come onto the agenda in the resolution of these disputes. First, the dispute resolution mechanisms established within the federation may be the first authority of recourse for disputes specific to esports. These mechanisms are advantageous in that they offer a structure familiar with the dynamics specific to the field. Second, in disputes carrying an international dimension, international arbitration authorities such as the Court of Arbitration for Sport, which has a well-established place in the resolution of sports disputes, may come into play. Third, the parties may prefer, by providing an arbitration clause in their contracts, to resolve their disputes by arbitration rather than by state justice; this provides an advantage of speed and expertise, particularly in disputes where the international and commercial dimension predominates. Finally, state courts are also a means to which recourse may always be had within the framework of general provisions. The correct determination of the means of dispute resolution at the contract stage is of great importance as regards the effective resolution of problems that may arise in the future.
10. Conclusion and the Continuation of the Series
Esports is, from a legal point of view, not a simple digital version of traditional sport, but an original field with dynamics and actors of its own. The correct understanding of this field passes first through grasping the actors of the ecosystem, the relationships between them and the intellectual property sovereignty of the publisher at the very top. The basic framework set out in this first article may be summarised as follows. Esports differs fundamentally from traditional sport because the game is the intellectual property of a company; for this reason, in every assessment the publisher's rules are the starting point. In Türkiye, esports is being institutionalised within the framework of the federation, and licensing, registration and transfer procedures are conducted within this structure. Organising a tournament requires a multi-layered permission structure, such as publisher permission, federation approval and local authority supervision. Broadcasting rights, sponsorship and the player-club relationship constitute the basic commercial and contractual axes of esports law. In dispute resolution, there are various means, from federation mechanisms to international arbitration. In the second article of our series, we will address in detail the player contracts that lie at the heart of esports, their legal nature, the transfer and registration processes and the protection of minor players. In the third article, we will examine the dimension of image rights, intellectual property and commercialisation.
Esports law is closely connected with the other layers of sports law and digital law. Our article on the enforcement of foreign arbitral awards in Türkiye and the 1958 New York Convention, which addresses arbitration, holding an important place in dispute resolution, and our analysis of choice of law and jurisdiction agreements in international commercial contracts, which forms the basis of international commercial relationships, address the matters connected with the contractual and dispute dimension of esports law.
For advisory services on esports law, player and club contracts, tournament organisation, publisher and sponsorship relationships, and the resolution of esports disputes, you may contact us at info@guzeloglu.legal.