Video game tournaments—the ‘next big thing’ for NJ sports betting

In the midst of a sports wagering boom – with nearly $4.6 billion in sports bets last year alone – lawmakers and gaming regulators want to open that market to online competitive video gaming, commonly referred to as eports.

The proposed Assembly Bill 637 would let in-person and online sportsbooks – of which there are 10 and 19 in New Jersey, respectively – to accept wagers on esports tournaments, “awards competitions,” and “competitive eating contests.”

Esports are organized and competitive video game tournaments that typically attract the millennial age group of 18 to 35, both on the spectator and competitor sides.

Some of the most popular games for esports tournaments include Overwatch and League of Legends, according to David Rebuck, head of the Division of Gaming Enforcement, which regulates the state’s gambling and sports wagering markets. Rebuck said that the DGE supports A637, and is happy with the online safeguards to make sure participants are not underage.

“Esports is rapidly gaining in popularity, particularly among younger demographics,” Rebuck told lawmakers at a Jan. 27 hearing on the bill. “The tournaments sponsored by game publishers draw large crowds and distribute millions in prize money to competitors.

“Competitors are viewing these games either online, or in arena venues, or in concert venues,” he added.

In 2019, the global esports market drew in nearly 454 million viewers, and generated $1.1 billion in revenue from such avenues as media rights, advertising and sponsorships, according to esports analyst website Newzoo.

“I would say esports are the ‘next big thing’ when it comes to sporting events, but the fact of the matter is that video game tournaments are already a prominent form of skill-based competition,” Assemblyman Ralph Caputo, D-28th District and the bill’s sponsor, said at the March 5 committee where the bill was approved.

Caputo, a former casino executive in Atlantic City,  has been chair of the Assembly Tourism, Gaming and the Arts Committee for years, dating back to before Atlantic City’s mass casino closure  in 2014.

The U.S. Supreme Court in 2018 struck down a near-nationwide ban on sports betting, which until then, was only allowed at a handful of states, including Nevada. Under the bill, wagers could not be placed on video game contests sponsored by high schools, or where the majority of participants are under 18.

“This is critical because some of the most high profile electronic sports events involve teams that have at least a person – or even a majority of persons – under the age of 18,” Rebuck said.

In November, the DGE allowed the Borgata in Atlantic City to accept the first wager on a video game competition – the League of Legends World Championship taking place in Paris – with bets limited to $1,000 and a prohibition on in-game wagering.

Like with the Oscars, the DGE gave the green light on championship betting on a case-by-case basis. Philadelphia broadcaster Howard Eskin placed the first-ever bet, of $100, on the G2 Esports tournament.

And Atlantic City is no stranger to global video game tournaments, albeit without any wagering.

Caesars Atlantic City hosted the Gears of War Pro Circuit in 2017, and Harrah’s Resort Atlantic City hosted the Rainbow Six Siege Pro League, drawing in a crowd of more than 1,000 attendees.

In June, the esports team Philadelphia Fusion will host an Overwatch tournament at the Jim Whelan Boardwalk Hall, according to the Press of Atlantic City.