How E-Sports Betting Could Explode

June 29, 2018, 10:30 AM UTC

ODDSMAKERS REJOICED in May when the U.S. Supreme Court decided to strike down the Professional and Amateur Sports Protection Act, paving a way for states to legalize sports betting.

Gambling on sporting events has come a long way in the more than 25 years in which PASPA was law. E-sports—that is, competitive computer gaming—has quickly risen to become one of the premier vessels for sports betting, and with its rise come questions on how the ruling will affect the future of the industry.

“For e-sports betting, the PASPA decision opened the door for any meaningful traction in the U.S.,” says Chris Grove, the managing director of Eilers & Krejcik Gaming, an industry research firm. “You never see [game] publishers get anywhere close to betting unless there is a tightly regulated market.”

In a report that analyzed the intersection of gambling and e-sports, Grove projected that the total value of money and in-game items wagered on major e-sports titles would hit $12.9 billion by 2020, with more than 6.5 million consumers placing wagers. (For comparison, the total size of the legal sports betting market in Nevada was $4.8 billion in 2017.)

In terms of future dangers coming to e-sports as a result of the ruling, underage gambling and damage to competitive integrity could rise, but no more than they would in a gray market, according to Bryce Blum, a founding partner at firm ESG Law, which represents more than 25 Western e-sports organizations.

Says Blum: “We need to accept the fact that betting on e-sports is going to happen whether we like it or not and actively become part of the solution.”

A version of this article appears in the July 1, 2018 issue of Fortune with the headline “Electronic Sports, Real Money.”

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