NEWS

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19-10-2017

 

A legal framework for “ e-sport ”

 

Law n°2016-1321 of October 7, 2016 for a Digital Republic and Decree 2017-871 of May 9, 2017 relating to the organization of video game competitions have finally created a legal framework for "e-sport" competitions "which have experienced a real boom in recent years. Indeed, according to the Intermediate report on the competitive practice of video games (e-sport) "  the size of the global e-sport market is around $600 million, with annual growth rates of around 30% per year »[1].

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First of all, the new Law has removed the risk that all "e-sport" competitions will be deemed prohibited, in application of the principle of the prohibition of lotteries and gambling, provided for by the Security Code. interior, which was extended by Law No. 2014-344 of March 17, 2014 relating to consumption, known as the "Hamon Law".

 

Law No. 2016-1321 of October 7, 2016 for a Digital Republic has, in fact, come to provide a new exemption from this prohibition for video game competitions organized with the physical presence of players. This exception a  was integrated into article L.321-9 of the Internal Security Code. To benefit from this derogation, the organizers of the video game competition must fulfill the conditions defined in articles L.321-9, R.321-48, R.321-49 and R.321 -40 I of the Internal Security Code. So :

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• The organizer must proceed, prior to the competition "one year at most and, except for justified emergency, at least thirty days before the start date of the competition", to a declaration to the service of the Ministry of the Interior in charge of races and games, through a teleservice;

• The total amount of the registration fees, the financial sacrifices of the players must not exceed 100% of the total cost of the organization of the event including the total amount of winnings and prizes offered;

• In the event that the total amount of winnings or prizes exceeds the sum of 10,000 euros, the organizers must, in addition, provide proof of the existence of an instrument or mechanism, i.e. a security, a trust, insurance or an escrow account, guaranteeing the payment of all winnings or prizes at stake.

 

We emphasize that with regard to video game competitions taking place exclusively online, the new derogation resulting from the Law and the Decree is not applicable. Consequently,   these competitions still risk being considered prohibited under the principle of the prohibition of lotteries and gambling provided for by the Internal Security Code.

 

Moreover, within the framework of this new regime, the Law and the Decree have regulated the participation of minors in video game competitions.

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• Article L.321-10 of the Internal Security Code provides that a minor may only participate in a video game competition subject to the prior agreement of his legal representative;

• Articles L.7124-1 and R.7124-1 of the Labor Code require, for minors under the age of sixteen, the prior authorization of the prefect of the department in which the head office of the company or organization is located. association organizing the video game competition;

• Article R.321-44 of the Internal Security Code prohibits the participation of minors under the age of twelve in competitions involving monetary reward.

 

Law No. 2016-1321 of October 7, 2016 finally instituted a status of "salaried professional player".

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• According to Article 102 I of this Law, the "salaried player" is defined "As any person whose remunerated activity is participation in video game competitions in a relationship of legal subordination with an association or company benefiting from an of the Minister in charge of digital, specified by regulation".

• Point IV of the same article specifies that the contract dedicated to this employee is a derogatory fixed-term contract, the minimum legal duration of which is twelve months (one season), and the maximum duration of which is five years.

• This employment contract must comply with the mandatory provisions of substance and form, provided for in Article 102 of the Law, under penalty of being qualified as a contract of indefinite duration, and of being sentenced to a fine of 3,750 euros (increased to six months' imprisonment and a fine of 7,500 euros in the event of a repeat offence).

 

This recognition by the legislator and this supervision of video game competitions are a great step forward, but only constitute a first step in this process of supporting this new activity. Many questions remain unanswered, such as in particular the question of the management of audiovisual rights relating to these events. It involves, in fact, not only the organizers of the video game competition, but also all the video game rights holders, to the legal regime complex. This question is all the more delicate sinceits economic stakes are major.

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Carole COUSON-WARLOP, associate lawyer at Cabinet ARTLEX at the Nantes Bar

 

[1]Intermediate report on the competitive practice of video games, drawn up by R. Salles, J. Durain and A. Kirchner, March 2016