Esports contracts are becoming increasingly important as electronic sports, or esports, rapidly grow in Malaysia, attracting a rising number of players and viewers.
Understanding the legalities of these contracts is crucial for ensuring fair and transparent dealings in this industry.
This article explores the key elements and important legal considerations for esports contracts in Malaysia.
Overview of Esports in Malaysia
Firstly, esports in Malaysia has seen significant growth over the past few years, rising in popularity among younger generations. In conjunction with government support for the esports industry, Malaysia has produced notable esports athletes who have competed and succeeded on both national and international stages and events.
Instances like these include competitions related to:
- Mobile Legends: Bang Bang
- Arena of Valor
- League of Legends
- Dota 2
With Malaysian esports athletes excelling in these popular titles, Malaysia is increasingly becoming a prominent player in competitive gaming, attracting significant leagues and competitions.
Additionally, the government has recognised and supported the industry. The establishment of Esports Malaysia (ESM), now known as the Malaysia Electronic Sports Federation (MESF), and budget allocations highlight the commitment to developing this sector.
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Importance of Esports Contracts
Hence, there is a growing emphasis on esports contracts. These contracts are important to protect the interests of all parties involved, including players, teams, and organisers. Without proper contracts, there can be significant issues, such as:
- Unpaid prize money
- Breach of agreements
- Exploitation of young players
Legal contracts help ensure that all terms and conditions are clearly defined, reducing the potential risk of misunderstandings and disputes. This helps to foster a secure and professional environment within the esports industry, promoting sustainable growth and development.
Key Elements of Esports Contracts
Esports contracts must clearly identify all parties involved. This includes their full legal names, contact information, roles (e.g., player, team, tournament organiser) and the purpose of the contract. The contract should then outline the specific services provided by the player, such as:
- Participation in tournaments
- Streaming
- Promotional activities
It should also ensure transparency by clearly stating the details regarding salary, prize money, bonuses, and payment schedules to avoid any financial disputes.
Other key elements are:
- The length of the contract
- Conditions for renewal
- Circumstances under which either party can terminate the contract
Lastly, expected behaviour, disciplinary actions for breaches, and mechanisms for dispute resolution should be specified to maintain professionalism and integrity.
Read More: A Quick Guide to Breach of Contract in Malaysia
Intellectual Property Rights in Esports
In addition, it is crucial to determine who owns the copyright to in-game avatars and customised content created by players using game tools.
Contracts should also address broadcasting rights and ensure all parties understand their rights and obligations regarding streaming and broadcasting tournament content.
An example of an intellectual property dispute is the case between Blizzard Entertainment and the Korea e-Sports Association (KeSPA) over the broadcasting rights of the game StarCraft.
Read More: The Essential Startup Guide to Intellectual Property in Malaysia
Legal Protection for Minors
Not to forget, many esports players are minors. They may not fully understand the contracts they are signing, making them vulnerable to exploitation.
Thus, parents or guardians must be involved in reviewing and understanding the contracts their children are entering into.
Malaysian law provides certain protections for minors, which should be considered when drafting esports contracts to ensure their fairness and legality.
Read More: Child Employment: Malaysia’s Children & Young Persons Act
Regulatory Environment for Esports in Malaysia
MESF, which is registered with the Malaysia Sports Commission, aims to ensure that esports activities are conducted fairly and in accordance with national laws and standards, promoting competitive gaming within the esports industry.
As the industry grows, there may be a need for more comprehensive guidelines and possibly the establishment of an exclusive regulatory authority for esports to ensure such guidelines align with national and international regulatory developments.
The Bottom Line
Ultimately, understanding the legal aspects of esports contracts is a way to protect the interests of all parties involved in the industry.
Seeking legal advice when drafting and reviewing contracts can help uphold compliance with relevant laws and regulations.
With proper legal frameworks in place, the esports industry in Malaysia can continue to grow and professionalise, offering more opportunities for players and organisations.
Partnering with the legal team at Sabrina Hashim & Co., you can adeptly handle the complexities of esports contracts and gain the protections necessary to succeed in both local and global markets.
Discover how our customised legal services can shield your interests from legal disputes and foster the sustained growth of your esports ventures.
