Is the latest scandal involving esports poised to cause serious repercussions?
Those who have been watching esports grow up over the last decade have likely noticed that the industry, with some games in particular, has been susceptible to match-fixing incidents.
The latest incident, however, might be the biggest scandal yet. The scandal purportedly involves a “small but significant group of players over a long period of time.”
While the esports betting industry has not taken off in the legal US market, it is expected to be an area of growth for many years to come.
The latest esports revelations
The latest revelations about a brewing esports integrity scandal came from an interview conducted between Slash32 and Esports Integrity Commission (ESIC) Integrity Commissioner Ian Smith, which was posted to YouTube on March 31.
The video, which was tweeted out by esports journalist Richard Lewis the same day it was posted, revealed that the Federal Bureau of Investigation (FBI) was now investigating a match-fixing scandal involving the North American MDL.
To all the geniuses that have been saying “derp why hasn’t Richard Lewis gone public with the match fixing stuff yet” this should tell you why. External law enforcement agencies including the FBI have taken an interest and that changes everything. https://t.co/ogwXWsGLir
— Richard Lewis (@RLewisReports) March 31, 2021
The alleged fixing, according to Smith, was one of the more recent fixes involving Counter-Strike.
What details do we have?
While Smith could not speak beyond general terms, he said:
There are two distinct elements to this investigation that I can tell you. The one is that we have a very focused investigation around … where we have really really good corroborating evidence from Discord, from various chat log screenshots, and recordings of players that we are going to ban for a very long time. A group.
The reason I say that there are two elements to this is this particular group of players I am very very optimistic we’ll be able to go public with this soon, within the next 10 days to two weeks. But, it is part of a much bigger investigation, which is going to take us a little bit longer, unfortunately.
Smith continued:
There has been amongst a relatively small but significant group of players over a long period of time, organized match-fixing in North American MDL.
This ain’t Australia
Smith noted that the scandal in North America was different than the match-fixing scandal that took place in Australia back in 2019.
Smith highlighted that in Australia there are clear criminal offenses and the criminal nature of the investigation can slow its pace.
Smith stated that it was not all “42 guys who were betting.” However, within those 42 players, there is a segment that were not only betting on matches, but were also allegedly fixing the outcomes of games.
Here in North American esports …
The situation in North America was described as “much more serious.” Smith said that the scandal in the United States is “a classic match-fixing” scandal, meaning that players are being bribed to fix the outcomes of games.
The involvement of outside organizations raises far more serious challenges than simply players acting on their own initiative to fix matches.
Smith stated that the fixing is “has been going on for longer and is much more organized.”
In comes the FBI
Smith noted that ESIC was working with the FBI, who has reportedly devoted resources from a recently formed sports betting investigation unit.
The FBI reportedly attended their first international match-fixing conference in 2019, where they received education on esports betting.
Smith noted that esports betting remains something of an afterthought in the United States.
Growth opportunity
Smith said that the regulation of sports betting in the United States is chaotic.
Smith doubled down in his criticism of sports betting regulation in the United States saying “most of the states have absolutely no idea what they’re doing …”
CSGO no stranger to controversy or fixing
Counter-Strike has been no stranger to fixing. There have been a number of high-profile fixes over the last decade.
The most prominent fix until recently is widely thought to have occurred in 2014 when heavily favored IBUYPOWER lost to NetCodeGuides.
More recently, a match-fixing scandal involving a number of Australian players resulted in criminal charges after the players allegedly placed wagers on matches and then subsequently threw the matches.
New test for the US betting market
While details remain scant as to what exactly has transpired, the involvement of the FBI in a purported match-fixing scandal should be eye-opening.
One question that remains to be seen is whether any wagers were placed in regulated sportsbooks.
Given the small number of jurisdictions offering esports betting and limited esports events offered within those jurisdictions, it is possible or perhaps even probable that these wagers were placed outside of regulated books.
What does this mean for esports betting?
The involvement of the FBI should signal that what has taken place is serious.
We will likely learn more in the coming weeks, though it could be through the powers of deduction should ESIC take action against some players before a press release from the FBI or via the filing of indictments by the Department of Justice.
Given the involvement of federal law enforcement authorities, it is possible that should charges be filed they could include Sports Bribery Act counts, which would be the first time the statute has been applied in the context of esports.
