Metro Detroit is uniquely poised to become the next epicenter of a growing industry: Professional competitive video gaming, or simply esports. An emerging and growing form of entertainment, the Michigan esports scene is rooted in its strong high school and collegiate programs. Professional esports actually had its first major metro Detroit debut August 2019, when Little Caesars Arena hosted the League of Legends Championship Series summer finals. Detroit’s storied sports history, as well as its growing reputation as a technological pioneer made it particularly attractive to Riot Games when it decided to bring this event to the Motor City.

The tournament attracted more than 10,000 live fans to the city and the arena, with tens of thousands more watching a stream on Twitch. Metro Detroit is also home to gaming lounges, arcade bars. Since 2019, the pandemic obviously shifted demand away from in-person events, but fans still continue to follow their favorite players remotely. California remains the epicenter (no earthquake pun intended) of the American video game industry, which is still dwarfed by the Asian market. Still, there is a robust esports community in Michigan, which bodes well for Michigan continuing to attract professional events and business in the future.

Despite the industry’s potential, there are no dedicated esports law firms or esports lawyers in Michigan, and Artaev at Law is the only Michigan law firm that specializes in video game law. If you search for “Michigan gaming lawyer,” the results come up for casino gaming lawyers, which is probably not the type of gaming you are looking for.

Why do you need a lawyer in the first place? Professional esports, like professional football, tennis, baseball, etc., is a legal minefield for the unwary. Intellectual property issues are front and center. Contract law and employment law concerns abound. Additionally, esports participants and professionals tend to be younger, often without professional representation, and especially vulnerable to predatory market practices. The unique nature of the industry and legal issues facing participants also requires specialized knowledge base and background from your lawyer.

Get someone who knows both the law and video games. The classic “Legend of Zelda” line rings true: It’s dangerous to go alone! Take this (advice):

• Before signing ANY contract with ANY team, sponsor, representative, etc., consult with an attorney. It is a worthwhile investment in your future and you must understand all of the rights, costs, and benefits that you are agreeing to. Obtaining a professional consultation before you enter an agreement is far cheaper than trying to get out of a contract after the fact or worse, having to defend against a lawsuit for breaching that contract.

• An esports attorney can act as your agent and advise you regarding things like your rights and obligations, contract termination, payments, taxes, and other legal aspects. An esports attorney can help you protect your career, revenue stream, and potential winnings, while you can completely focus on the gaming and building your brand.

• Do not assume that because you are part of a school team that you are automatically protected. Professional esports is all about money and like any other industry, it is a business first. Treat your involvement just like you would any other serious business transaction.

• Merchandising and general intellectual property are big money, but often overlooked. As a pro gamer, you will likely receive a salary, but you also stand to make a lot of money through sponsorship. For example, if Mountain Dew calls you up and offers big money to drink their products during your live stream, who owns those rights? Who gets the money?

• Like with any business, the more it grows the more trouble it attracts. Did you create a signature kill shot or a unique move that gained you 1,000 new followers on Twitch? What rights do own to that creation? What about your unique online persona? What happens to your creations after you sign a professional contract or a sponsorship deal?

• Another question that will come up sooner rather later is how to deal with the social media aspects – especially the negative trolls. Can you send “cease-and-desist” letters? What legal options do you have when someone defames you online?

• You may also want to incorporate at some point. A single-member LLC is a simple, inexpensive, and effective corporate form that you can set up to protect your craft, creations, and work from any sort of liability – such as adverse copyright claims for example. An LLC can have a single member/owner, and is the preferred business form of solo business operators.

Video games are big business and are a growing sector of the entertainment world. The $1 billion (plus) global industry is continuing to expand worldwide, including to Metro Detroit. The emerging market means there are more players, more teams, more brands, and more potential pitfalls than ever before.

Have more questions? Contact Michigan’s video game lawyer Dan Artaev at dan@artaevatlaw.com or 269-930-0254 with any questions and professional representation in the esports or video game industry.

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