Does prize money for Esports fall under the Gambling Act?

Mind Sports South Africa (MSSA)  is the world’s oldest national federation for esports having been founded in 1985 and is the custodian for all esports in South Africa.

With the development of esports in South Africa, there are more-and-more private operators wanting to start their own competitions. Many of these private operators do not want to seek official accreditation in order to avoid regulatory bodies and the law.

eSports are not governed by gambling legislation and therefore a licence from the provincial gambling boards is not required should events be accredited by MSSA.

If the event meets the requirements for an eSport event, then the event would be governed by the eSport regulator.

Online gaming has gained significant momentum in South Africa. There are dedicated leagues that host local competitions where entrants pay fees (similar to the Registration Fees) and compete for the opportunity to win cash prizes.

Online gaming on a competitive level is considered an eSport. The recognition of eSports in South Africa has taken great strides by MSSA. In this way, competitive and online gaming is regulated in terms of sporting regulation and not under gambling laws.

In the 2013 White Paper on Sport and Recreation for the Republic of South Africa (White Paper), the definition of sport in a development context includes a broad and inclusive spectrum of activities which people of all ages and abilities can participate.

In 2008, the United Nations Inter-Agency Task Force on Sport for the Development and Peace defined sport, for the purposes of development, as “all forms of physical activity that contribute to physical fitness, mental wellbeing and social interaction, such as play, recreation, organised or competitive sport, and indigenous sports and games”.

Fortunately, Mind Sports South Africa (MSSA) (the official organisation with the rights to give out South African colours to eSports teams at a national and provincial level) makes a clear provision for the recognition of eSports in their constitutional document. eSports are recognised as sports and are, as such, regulated in terms of sporting legislation and not gambling legislation.

Thus, it is MSSA’s opinion that in order to avoid approaching a gambling regulator, a private operator needs to have its event registered as an accredited eSport event.