Legal disputes in esports can be costly and time-consuming, especially when it comes to salaries, prize money, or transfers. Besides mediation, a traditional system involves entering into an arbitration agreement and conducting subsequent arbitration proceedings (often referred to as “Alternative Dispute Resolution” or “ADR”). Riot Games, one of the leading publishers in gaming and esports, has recently introduced an innovative arbitration system in the esports sphere for the EMEA region with its newly unveiled Dispute Resolution System (Riot DR). The aim is to provide quick, fair, and cost-efficient solutions to legal conflicts in the competitive leagues of League of Legends (LoL) and Valorant.
I. ADR in E-Sports
In the growing market of electronic entertainment media, particularly in the esports sector, legal disputes have increased in recent years, leading to a rising interest in alternative dispute resolution processes. While ADR agreements are already established in other markets with corresponding systems in place, they are scarcely used in e-sports.
Except for the significant initiative by the World Esports Association (WESA), arbitration in the esports sector has been relatively quiet for some time. In 2016, WESA introduced its own arbitration rules, known as the World Esports Association Arbitration Rules. However, these rules have not achieved widespread implementation in practice, even though some of the world’s largest esports organizations are WESA members. The core issue likely lies in one of esports’ main challenges: the ecosystem is too diverse – there are too many relevant games and key players in the market. Moreover, ADR is not limited to existing arbitration rules; there is the possibility of contractually establishing independent rules and foregoing institutional oversight (so-called ad-hoc arbitration) or relying on arbitration rules and institutions not specialised in esports but with extensive practice.
The restrained use of arbitration in esports does not change the fact that legal conflicts frequently arise in the competitive esports and gaming industry, which are challenging to resolve through traditional court proceedings due to their time-intensive nature.
Riot Games, has recently made a fresh attempt to make arbitration mainstream in esports by implementing a specialized arbitration system for the European market about two weeks ago. Known as the “Dispute Resolution for Riot Games’ Esports [EMEA]” (short: “Riot DR”), the system aims to avoid costly and lengthy court proceedings and offer players and partners faster and more transparent conflict resolution. Riot Games’ market position could ensure that this arbitration system gains more traction than, for instance, the WESA Arbitration Rules. A closer look at the Riot DR is thus warranted.
II. Riot DR – Who is Affected and What are the Key Rules
The system is designed for Tier-1 and Tier-2 competitions in the EMEA region, covering major leagues like the League of Legends EMEA Championship (LEC) and the VALORANT Champions Tour EMEA (VCT EMEA). It is relevant for all contractual and financial conflicts between teams, players, and coaches in these competitions, encompassing over 200 teams, more than 1,500 players, and 400 coaches. It primarily addresses disputes over salaries, bonuses, prize money, and transfers. Conflicts with regional tournament organizers are excluded – in such cases, Riot Games itself handles mediation.
The Riot DR features several core topics and clauses:
- Independence and neutrality of arbitrators: As in classic ADR, Riot DR encompasses that the selection of an arbitrator should be made by the parties. The arbitrators themselves are – as in traditional arbitration systems – neutral and independent in their decision-making. Unlike in systems such as DIS or WESA, however, the selection is limited to a small pool. Currently, only 14 arbitrators are authorized. One of these 14 arbitrators is to be agreed upon by the parties.
- Confidentiality of proceedings: Unlike public court cases, arbitration proceedings are generally not accessible to the public. The proceedings under Riot DR are subject to strict confidentiality clauses to protect the interests of all parties involved and ensure competition integrity among teams.
- Short procedure duration and quick decision-making: A primary goal of Riot DR is timely arbitration procedure. According to Riot’s arbitration rules, there are generally no oral hearings, and decisions are to be based solely on written submissions. Each party is initially allowed only one submission – the claimant’s request for arbitration and the respondent’s answer. Exceptions to these principles may apply in specific cases.
- Decision “ex aequo et bono”: The arbitral award under Riot DR is made “on the basis of justice and fairness” without reference to any particular national or international law.
- Costs and financial support: The cost of the procedure depend on the value in dispute. To support parties with limited financial resources, Riot has provided for financial legal aid under strict conditions, financed through a dedicated fund.
Participation in Riot’s arbitration process is, of course, voluntary and requires the consent of all parties. Parties that could rely on the Riot DR are not precluded from turning to regular courts instead. However, simultaneous proceedings before regular courts and an arbitral tribunal are generally excluded. The arbitral award has the same effect in Germany as a legally binding court judgment following Sec. 1055 ZPO, if the arbitral tribunal is invoked; provided the arbitration agreement is lawful.
III. A Viable Path Forward?
The Riot Dispute Resolution System represents a significant step forward for the professional esports industry. It offers a flexible, fair, and fast solution for legal conflicts, supporting the competitiveness of teams and players. In the fast-paced world of esports, with short transfer windows and competitions that often last only a few days or weeks, quick resolution of legal disputes is essential.
Nonetheless, there is room for improvement in the arbitration rules. For instance, the clauses on legal aid are relatively superficial. Legal aid can only be granted if sufficient funds are available. The initial amount of the fund and the rules for replenishing it are not specified in the arbitration rules.
More critically, the rules stipulate that arbitrators’ decisions do not need to refer to a specific legal order but are to be based solely on ” justice and fairness.” What is considered “fair” and “just” can vary significantly between legal systems. Legal systems based on codified law, such as Germany’s Civil Law system, often have entirely different understandings of fairness and justice than Common Law systems, which rely primarily on case law, as found in the Anglo-American legal sphere. Even among codified law systems, there can be differences in what is deemed fair and just. For parties involved in Riot DR proceedings, this can create greater uncertainty since arbitrators’ general sense of justice and fairness in borderline cases is (at best) only partially predictable.
Equally surprising is the rule allowing each party to submit only one written statement. These statements – supplemented by the aforementioned principle of “justice and fairness” – form the sole basis for the arbitrator’s decision. While this rule will undoubtedly speed up proceedings and reduce legal costs, it also places greater weight on the written statements than in regular court proceedings. Plaintiffs, in particular, will need to anticipate all potential arguments from the defendant to pre-emptively counter them in the claim. Depending on the specific situation, this could be an advantage or a disadvantage. Prospective participants are therefore strongly advised to seek legal counsel with expertise in e-sports and procedural law to evaluate the pros and cons and represent their interests effectively.
Legal questions and disputes are not uncommon in the fast-moving world of esports. For teams, players, and agencies, Riot DR offers a real alternative to traditional court proceedings – a model that could set a precedent for other parts of the industry. It is worthwhile to explore the possibilities of the Riot Dispute Resolution System, especially with regard to professional preparation and legal protection, for which we are happy to offer our support.