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Game On: The rise of esports betting in the US

Insight | Analysis

Esports have boomed in the US and beyond in recent years, but when it comes to betting on these events, states have exhibited differing approaches on how to regulate the vertical.

C.J. Fisher and Harry Jackson of leading law firm Fox Rothschild examine the landscape of betting on competitive video games in the US.

It’s no secret that the esports industry is booming in the US, as well as globally, and the US sports betting industry continues to expand at a rapid pace. 

The million-dollar question, however, is whether betting on competitive video gaming and electronic sports events has a meaningful future in the US market. While certain states have welcomed esports betting with open arms, others, including some in which sports betting already is permitted, have taken a more deliberate approach or prohibited such wagers altogether. 

Examining the current landscape for esports betting in the US provides insight into what may be holding back the market, and what the future may hold for the industry domestically. 

The term “esports” is used loosely in the gaming industry, and it is important to distinguish between esports (competitive electronic sports or video game events) and esports betting (i.e. users placing wagers on the results of competitive electronic sports or video game events, similar to placing wagers on a traditional sporting event). 

Further, esports betting in that context does not include daily fantasy sports involving esports, skin betting (placing wagers on chances to receive cosmetic items in the video game itself) or esports contests in which the players themselves compete for cash prizes.

The US esports betting scoreboard 

Following the Supreme Court’s 2018 decision striking down the Professional and Amateur Sports Protection Act (PASPA), states were free to legalize and regulate sports betting, and if they wished, eSports betting. 

To-date, esports betting is expressly permitted, through legislation, regulation or otherwise, in Nevada, New Jersey, Colorado, Tennessee, Virginia, West Virginia and Washington.


Because sports wagering was legal in Nevada prior to the repeal of PASPA, Nevada was well-positioned to become an early esports betting leader. In 2017, the state amended Section 464.005 of the Nevada Revised Statutes to allow gambling on “other events” which clarified any possible confusion over whether eSports were included under the existing sports betting law.

New Jersey

New Jersey currently lists eSports among permissible “sports events” wagering offerings, including “all professional electronic sports and competitive video game events that are not sponsored by high schools, do not include high school teams, and do not include any participant under the age of 18 years.” 


In 2019, the Colorado Limited Gaming Act was amended to permit wagering on any “sports event” including “any individual or team sport or athletic event in which the outcome is not determined solely by chance”.

While esports is not mentioned by name, a “prohibited sports event” includes only video games that are “not sanctioned by a sports governing body as an electronic competition” and the Colorado Limited Gaming Control Commission’s official catalog of events and wagers contains every approved esports wager to date. 

Recently, GameCo announced a partnership with the Sky Ute Casino Resort in Colorado and US Bookmaking to launch the first eSports dedicated sportsbook in the US.


The Tennessee Sports Gaming Act expressly includes esports in its definition of “sporting event,” and defines esports as: “any multiplayer video game played competitively for spectators, either in-person or via remote connection, in which success principally depends upon the superior knowledge, training, experience, and adroitness of the players”. This allows sportsbooks to list esports contests among events for other sports leagues. 


Similar to Tennessee, eSports contests are expressly included in the definition of “sports event” in Virginia, along with professional sports, college sports and any athletic event, motor race event or competitive video game event. 

West Virginia

The West Virginia Lottery Sports Wagering Act broadly defines “sports events” as “any professional sport or athletic event, any collegiate sport or athletic event, motor race event, or any other special event authorized by the [West Virginia State Lottery Commission],” and the Commission has authorized wagering on esports events. 


Washington legalized sports betting, including esports, for federally recognized tribes within its borders in March 2020.  

Such tribes are permitted to accept wagers on “sporting events, athletic events, or competitions by any system or method of wagering” including “[a]n electronic sports or esports competition or event”. This is defined as “a live event or tournament attended or watched by members of the public where games or matches are contested in real time by players and teams and players or teams can win a prize based on their performance in the live event or tournament.”  

Despite promising developments around the country, not every state – or even every state that has legalized and regulated sports betting – is on board. 

For example, in Indiana, “sports wagering” excludes “wagering on e-sports,” which is defined in Indiana as “a single player or multiplayer videogame played competitively, typically by professional gamers.” 

Further, in Iowa, despite requests from industry stakeholders for the Iowa Racing & Gaming Commission (IRGC) to consider esports as an “authorized sporting event,” such betting is prohibited, due in part to the Iowa Attorney General’s opinion that esports would not fit the definition of an “authorized sporting event.” Ironically, esports is considered a permissible “fantasy sports contest” in Iowa.

In other states, eSports betting currently falls in a gray area, not expressly authorized or prohibited. 

Barriers to entry

The reluctance of certain states to include esports on their sports betting menus likely stems from concerns over integrity (i.e. match fixing and the manipulation of outcomes), and the age of the participants involved in the activity. While these risks are also present in traditional sports betting, the risk is perceived to be higher in regard to esports. 

But similar to sports betting, the esports industry has taken steps to mitigate these potential issues and risks. Organizations such as the Esports Integrity Commission (ESIC) work with esports stakeholders to monitor, identify and investigate potential issues such as match manipulation, report them to sportsbooks and regulators, and prosecute or punish violators. 

Video game developers and esports tournament organizers have also formed integrity partnerships with providers of integrity services, such as Sportradar, in which the provider monitors the betting activity of esports competitions for irregularities and develops integrity programs designed to prevent betting-related corruption. 

While the participation of underage competitors in eSports events may increase the perception of risk, this can be mitigated with regulations limiting betting on esports events to those involving competitors above a certain age. 

Esports betting checkpoints

In addition to age restrictions and leveraging the expertise of integrity providers, there are additional steps states and regulators may consider before taking the plunge into full-scale esports betting. 

The Nevada Gaming Control Board (NGCB), for example, initially required sportsbooks to apply for permission for each individual esports event before they could accept wagers. Eventually, the state allowed sportsbooks to apply for permission to offer wagers on up to one year’s worth of esports events, if such events were hosted by the same company.

In the last year, Nevada has approved betting on entire seasons of the Counter-Strike ESL Pro League, the Overwatch League, Call of Duty League, eNascar iRacing Pro Series, and the League of Legends Championship Series. The Golden Tee World Championship, which involves an arcade golf simulator, is also a pre-approved annual event. 

The NGCB also generally limited approved wagers to head-to-head, winner of each match and overall season winner markets, and prohibited live in-play wagering.

New Jersey took a similar approach, including with the League of Legends World Championship Final in 2019, in which the New Jersey Division of Gaming Enforcement (DGE) set a betting limit of $1,000, prohibited live in-play wagering and generally limited wagers to overall winner and individual map/round winners. 

Like Nevada, New Jersey requires written notification the first time wagering on a category of event or a type of wager is offered to the public, at least 72 hours prior to offering the new event or wager. This notice must include the name of the sport’s governing body in charge of administering the event or wager and a description of the policies and procedures regarding the event’s integrity.

To date, the DGE has approved betting on certain eSports leagues/events including the eNascar iRacing Pro Invitational Series, Vie.GG Legend Series (CS:GO) and League of Legends World Championships.  

These examples demonstrate that states can successfully navigate perceived risks and concerns to ensure eSports is included within the scope of permissible sports events on which sportsbooks can accept wagers through enabling legislation and/or measured regulation, even if the scope of permissible esports events is restricted. 

As states become more comfortable with the growing eSports betting industry in the US, and awareness and education surrounding eSports betting advances, particularly in regard to the industry’s integrity efforts, we anticipate that the list of states legalizing and regulating eSports betting will steadily increase. 

C.J. Fisher is a partner, and Harry Jackson is an associate, in the Gaming Practice Group of Fox Rothschild LLP. They concentrate their practice on all aspects of gaming law, including licensing, regulatory and compliance matters, and have been at the forefront of the expansion of legalized and regulated igaming and sports betting (including esports betting) in the United States.