Turkish Law Blog
A Legal Perspective on E-Sports in Turkey
As a result of the access of computers to households other than commercial life, it was soon to understood that these devices could be used not only for commercial purposes but also for individual entertainment after 80’s in the world. The integration of the Internet to these devices should be regarded as the beginning of a new era for computers and users. With the help of the internet, computer games are able to be played in multiple from different places, and it should be accepted that such innovation transformed the computer games from basic a tool of entertainment to a comprehensive platform where individuals socialize and live their second life in game zones. In this context, considering the excess of time spent in the console and the computer games, the rapid increase on the population of gamers and the high purchasing power of these masses, the evolving of these games into a professional sports field intended for commercial purposes and the emergence of the concept of “E-sports” became inevitable.
E-sports began to enter our lives gradually in the 80’s; today it has become a phenomenon that appeals to people of all age groups. As of 2019, with an annual trade volume of more than 1 (one) billion dollars globally and more than 400 (four hundred) million players/supporters, it has started to occupy an important place in the commercial field. In our country, E-sport has more than 4 (four) million followers or supporters and +55 registered teams and +1000 licensed players operate in the national and international area. Turkey's three biggest football clubs also have taken steps to E-sports community with Beşiktaş E-sports team in January 2015, 1907 Fenerbahçe and Galatasaray E-sport teams which have started to participate in the tournaments at 2017.
We observe that ten thousand fans with tickets filled the stadiums where the tournament is located and hundreds thousands of them are on the screen of broadcasting platforms during the national tournaments in Turkey whilst these numbers has reached 21.8 million in 2019 LOL Grand Final held in Paris.
In lights of such background information on e-sport and its profound economic and social effects, we will evaluate the E-sports activities in Turkey as E-sport players, E-Sports Club and licenced E-Sports Facilities in 3 (three) main titles below.
I. E-Sports Players
After the establishment of the E-sports Federation within the Ministry of Youth and Sports in, licensing activities have been started for the registration of E-sports players who intends to play e-games as a sports activity rather than a leisure activity. In order to apply for an e-sport license, you must be 6 years of age. In order to have this license, an application must be made to the District Directorate of Youth and Sports with the necessary documents.
After the application is made with these documents, as a result of the approval of the necessary authorities can be licensed with a 1-year registration. One of the main points to be aware of is that the license given must be 1 year and this license should be renewed at the end of each year. The license will not be renewed if there is a negative change in any of the conditions set out in the relevant legislation (including, but not limited, a health problem that may affect gaming at the computer). Underage players must be allowed by their parental guardian to operate in E-sports gyms, clubs and tournaments.
With regards to the transfer process of players, standard transfer procedures applicable in other sports is followed for the e-sports as well. Within this framework, the most important thing that E-players should pay attention to is the evaluation of the terms of the contract between the player and the club with professional legal assistance. This type of contract is similar to service contracts which the ones concluded in other sports branches. However, the separation of E-sports from classical sports activities in some aspect causes the differentiation of the player contracts to be signed within the scope of this sport in certain matters. Especially the fact that the hierarchical structure between the E-sports club and the player is weaker than that of the conventional sports and that an athletic centered structure is dominant by its nature of E-sports may cause the players to be on the dominant side in the agreed articles of contract. In this context, it should be taken into consideration that income-sharing and commercial practices between the parties may occur differently from other sports within the characteristics of this dominant position. Within the framework of the related legislation, the E-sports club can make registration, visa and transfer transactions for a maximum of 2 foreign players (players who are TRNC citizens are considered Turkish players) within 1 (one) season. E-players coming from abroad; the registration shall be attached with the conditions to get permission and cutting their formal relations from the federation of the country they are registered according to the relative regulations in Turkey.
II. E-Sports Club
The activities, main principles, formation and activities of the boards, duties, powers and responsibilities of the E-sports Federation (“Federation”) are within the scope of the General Directorate of Sports affiliated to the Ministry of Youth and Sports (“General Directorate”). Therefore, establishing an E-Sports Club is subject to the same legal process as establishing other sports clubs. Within this scope, as a first step, it is necessary to establish the Sports Club Association following the procedures and principles specified in the Associations Law No. 5253 and the Associations Regulation. After the establishment of the Association, it gains the title of “Sports Club" by registering with the Provincial Directorate of Youth Services and Sports in their provinces in order to engage in sports activities. The sports club, which is in the status of an association, can benefit from the tax advantages provided to it since it is a non-profit organization. In addition to this, it will be possible to operate commercial activities with legal entities that will be established as a joint-stock or limited company under the sports club.
Considering that E-sports as a commercial activity, the tools of generating a profit of a corporation under the sports club is one of the main points to be discussed within the balance of income and expense items. Having said that, likewise other sports clubs, sponsorship revenues constitute the majority of the revenues of E-sports clubs. Further, success-based tournament prizes that the club may obtained from the tournaments to be attended, should be accepted as an important revenue for the club.
III. Licensed E-Sports Facilities
Apart from the payment of the players and staff, one of the important expense items for the e-sports clubs is to establish a certain place for their players for training. Providing a fully-equipped e-sports facility to both players and coaches has many advantages such as providing time savings, increasing team synergy by acting together, and preventing problems that may occur with different internet speeds in different places. Considering that a pro E-athlete is training more than 10 hours per day before the screen, it should be accepted that such activity causes more psychological exhaustion than other sports activities. Therefore, E-sports training facilities must have certain standards, unlike the games halls we all know. The E-Sports Federation has legislated to E-Sports Facilities which provide a training area to E-sports clubs that do not have sufficient physical facilities for their players and the opportunity to train for licensed players who are without a club. For this reason, some legal and physical qualifications about these facilities have been determined with "Special E-Sports Halls and Qualification Certificate Instruction". According to such instruction, minimum requirements of E-sports facilities should have; 40m2 working area, 15 m2 resting area or waiting room, 10 m2 size office services office, one separate men's and women's toilet; 2.35 m of ceiling height; 18 degrees Celsius of room temperature. For the facilities that met such conditions, an application to obtain a “Qualification Certificate" from the Federation should be made.
In case that a contradiction to the aforementioned terms of the e-sports facility is detected by the relevant units, a reasonable period is given for the completion of these deficiencies under the relevant legislation. In the event that such deficiencies are not fulfilled following the end of the period, an administrative fine of ¼ of the yearly registration fee determined by the General Directorate. Further, the penalty amount is doubled in case that it is determined in second inspection that the detected deficiencies are not eliminated until such date. In the facility, which has received administrative fines twice within one year, if the issues that would require a penalty for the 3rd time inspection are determined, the Qualification Certificate may be revoked by the General Consulate. Furthermore, owners of the facility whose Certificate is revoked are prohibited to open and manage any facility for the same purpose.