Riot Games recently announced that it will open up gambling sponsorships for the first time in the League of Legends and Valorant events in North America and the Middle East North Africa region. This marks Riot Games' official entry into the esports gambling sponsorship arena. John Needham, the President of Esports, explained the considerations behind this decision in the article "Why We Are Opening Up Esports Gambling Sponsorships Overseas and How We Will Responsibly Advance This Initiative".
Needham stated that many clubs are in urgent need of more sources of income, and esports gambling, as a reality, is hard to disappear whether Riot Games is involved or not. Therefore, incorporating esports gambling into the official competition system and establishing clear regulatory rules is more beneficial to the healthy development of the industry than the chaotic state of the grey market.
1. The Origin of Controversy and Technical Considerations
Gambling itself carries controversy in public opinion, especially in our country where online gambling is a clearly prohibited illegal act, and the esports circle has already had precedents. It is worth noting that Riot Games' move does not involve the Chinese market.
On this basis, setting aside the moral debate, we can focus on two technical issues:
1. Why did it happen? The economic environment is depressed, the esports capital market is cold, and various events and clubs urgently need new financial support. Gambling sponsorship, due to its lucrative returns, has become a desperately needed "lifeline".
2. Where is the problem? Esports has not yet established a sustainable business model. The four main revenue pillars of professional sports—broadcast rights, match day income, merchandise/IP licensing, and sponsorships—esports relies too heavily on sponsorships, while underdeveloping other channels.
The key advantage of esports over traditional sports lies in the direct income from games, but this raises questions: Since the game itself is profitable, why not support events with game revenue? Riot Games has established a Global Revenue Pool (GRP) and plans to share the sales revenue of in-game esports assets, but its subsidies for events and clubs have a strict grading system, limiting the widespread coverage of game revenue.
2. The Positioning of Esports Events and Riot Games' Strategic Choices
Whether Riot Games views esports events as a "game marketing tool" is key to deciding how funds are allocated:
If esports is merely an extension of game marketing, using game revenue as event funds is natural.
If esports emphasizes professional sports, it should follow the diverse income structure of traditional sports, reducing reliance on internal game funds.
Needham pointed out that esports events have limited effects in attracting new players and should integrate more with cultural and creative products to deepen the existing user experience. If esports events rely solely on game subsidies, they may deviate from their independent value.
For example, the League of Legends Global Finals, as an international top-tier esports event, attracts a large number of viewers who watch the event but do not play the game, showing that esports events have an independent impact beyond game marketing.
3. Precedents in Professional Sports and Lessons from Esports Gambling
The traditional sports field's acceptance process for gambling sponsorships provides important references. NBA Commissioner Adam Silver supported the legalization of sports gambling, promoting cooperation between the league and gambling platforms, but also implementing strict advertising restrictions and regulatory systems.
From Adam Silver's 2014 New York Times column to the NBA's actual opening of gambling sponsorships took a 4-year buffer period, allowing public opinion to gradually digest the controversy and ensuring more stable decision-making.
Riot Games and Needham's approach is similar: openly discussing esports gambling, calling for regulated management, but currently still in the "informing" rather than "warming up" stage, requiring more buffering and guidance in the future.
4. Future Prospects and Challenges
The future business model of esports remains fragile. Compared to traditional sports giants like the NBA and NFL, esports clearly lacks in terms of copyrights and match day income, making reliance on sponsorships inevitable.
Gambling sponsorships can alleviate financial pressures in the short term, but it is essential to clarify their use of funds. Only by investing in player education, secondary league construction, infrastructure, and salary system reform can the health of the esports ecosystem and the purity of competition be ensured.
Even under official regulation, legal gambling brings risks. NBA players have repeatedly been harassed by gamblers, showing the profound impact of gambling on the sports ecosystem. Esports must also be wary of the potential public opinion and integrity risks brought by gambling.
Conclusion
Esports gambling sponsorships are not just a simple fill for a "lifeline" but an important part of the transformation of the esports business model. Riot Games' actions indicate that esports is facing key decisions in professionalization and commercialization.
How to reasonably introduce controversial sponsorships, establish comprehensive regulatory and fund use mechanisms, and ensure that the independent value and competitive spirit of esports events are not eroded, is a major task facing the entire industry. Only in this way can esports gambling sponsorships truly become a driving force for the industry's sustained development, rather than a hidden danger and burden.
