Gambling companies have a responsibility to stamp out corruption in esports, according to betting industry official and founder of esports betting operator Luckbox.com.
The reputation of esports has been harmed by scandals including match-fixing, cheating and underage gambling.
Recent examples include CSGO player forsaken being banned after using a hack in an ESL Premiership event and Clash Royale payer Jimit Bhatt being suspended for 12 months for cheating.
Lars Lien, founder and CEO of esports betting operator Luckbox.com, says the legitimate operators in the gambling industry have a duty to help clean up the reputation of esports.
Luckbox is a member of the Esports Integrity Coalition, which works to maintain standards in esports.
Lien said: “Gambling will happen and it’s a matter of making sure that responsible operators work together to stamp out match-fixing and to help prevent it. We have an integral role in eliminating that from our world.
“This is why we’re part of ESIC, where we and other responsible operators share suspicious alerts. So if we see betting patterns that are not consistent with a normal match, we report to ESIC and they will investigate the event in question. They work with tournament organisers, teams, they educate players, they work to stamp it out.”
Players need to understand the risks
Luckbox holds an Isle Of Man gambling licence, which offers esports fans the highest levels of security and protection to bet on Dota 2, CSGO and League Of Legends.
Lien said it was also important for esports fans to be aware of the risks when choosing where to bet.
He said: “Recently, there’s a Reddit post that a gaming company stole $500 from them. There might be legitimate reasons for seizing the funds of a customer, because match-fixing is a problem in every sport, including esports.
“That gambling company might have very good reasons for seizing funds but the difference is if that company had a good licence, the customer would be able to go to the Gaming Commission, file a formal complaint and the Gaming Commission would help the customer get the money back if that seizure was unwarranted. There’s legal recourse.
“Operators in jurisdictions such as Curacao, Cyprus, many others. There’s no recourse. I could borrow a Curacao licence if I wanted to.
“Esports has seen the skin-betting scandals where operators have let 12-year-olds play using their parents’ credit cards. Children don’t have the same understanding of gambling risks. Even with adults, you will have problematic behaviour.
“Betting should enhance your experience, it should not be the experience. If someone loses their house, that’s a bad thing, of course.
“This is also part of the distinction between the good guys and the bad guys. We have deposit limits, we have responsible gaming limits, we will make sure our players are over 18 and we will be looking for problematic behaviour, so we can help people not spend more on gambling than they can afford.”
Learning from the best
Lien said he was motivated to obtain the Isle of Man licence after working at PokerStars, which is also based on the island. In 2011, the US government banned online poker and PokerStars was able to return funds to players while rival Full Tilt collapsed.
Lien said: “You can either be one of the good guys, that has a proper licence, where all of the player funds are segregated from the funds of the company.
“We have what’s called a ‘client account’, which is similar to what a lawyer would have to keep the funds of their clients, that’s completely legally and physically separated from the funds of the business.
“I worked for PokerStars and the Department of Justice, in the US, decided they wanted to shut down the poker scene. They filed complaints against PokerStars and one of the competitors, Full Tilt. What happened?
“PokerStars, because they had taken licensing seriously from day one – they actively and intentionally got the strictest gambling licence in the world (the Isle of Man) – and as a consequence of that they were forced into having good corporate governance, good structures, good compliance. They were forced into doing things right and Full Tilt did not.
“So when the Department of Justice pulled the rug from under the industry, FullTilt collapsed. Customers couldn’t get their money, everything was black, no one understood how they would get their money back. They didn’t have the money, PokerStars did and paid everyone back in a matter of weeks.”