Esports in Poland: what Polish law has to say on competitive gaming

Coming back from this year’s edition of the Esport & Gaming Forum, the biggest annual conference in Poland concentrating on business aspects of professional gaming, I was amazed by how many new companies become actively engaged in the esports community each year. It obviously has to do with the growth rate of this market, seeing wider social acceptance and growing numbers of spectators at gaming tournaments. Following the people, there are more and more brands willing to get a foothold in the biggest new trend.

Given that Poland, and especially the Silesian city of Katowice, has proved to be a bright spot on the esports map of Europe over the course of the last couple of years (I am talking of course about hosting the Intel Extreme Masters World Finals since 2013), and that there are currently several professional teams operating in Poland with notable success, I thought I should discuss the actual status of esports in Polish law.

The traditional approach of dismissing video games as juvenile entertainment is shifting. Many countries around the world have already decided to classify competitive gaming as a sport under their national laws. No surprise that the first country to do so was China (2003), which recently (2019) went as far as to recognise esports players, via its Occupation Skill Testing Authority recommendations, as an official profession. Some other countries have done the same, including Turkey (2014) and the Philippines (2017).

When it comes to Poland, we are still a few steps behind those countries. However, it is not like our parliament decided to completely ignore the esports phenomenon. In 2017, a change was introduced to the Polish Act on Sport of 2010. Ever since then, any form of “competition based on intellectual activity, which aims to achieve a sports result” should be treated as a sport under Polish law.

Justifying the need for that change in law, the Polish government (which initiated the legislative procedure) argued that not only physical activity facilitates strengthening social ties or building one’s self-worth. In the statement of reasons for the bill, we read that engaging mental activity by playing sports bridge, checkers or chess, as well as electronic sports creates the opportunity for intellectual development, strengthens social relations, promotes socialisation of participants, adds confidence. The effects of intellectual activity in a social aspect are therefore similar to practising physical activity. It should also be borne in mind that a professional approach to chess, checkers, sports bridge, as well as electronic sports requires participants to engage in physical activity. In addition, chess, checkers, sports bridge and electronic sports develop reaction speed and develop strategic thinking.

The consequences of the legal recognition of “intellectual sports”, including esports, as sports, are mostly of prestigious nature. The change created, however, additional opportunities for esports professionals, in particular to seek financing of their esports-related activities, receive best player scholarships, better sponsorship and marketing deals, as well as tax exemptions for championship prizes.

Another major change in law for esports is currently waiting for the Polish President’s signature to enter into force. The new amendment to the Polish Act on Sport potentially opens a door for competitive gaming to gain legal status similar to that of traditional sports by enabling esports organisations to create an official Polish sports association. The consequences of that ability are quite significant because such an association is legally entitled to:

  • organise and stage sporting competitions for the title of Polish Champion and for the Polish Cup in a given sport
  • establish and implement sporting, organisational and disciplinary rules in sporting competitions organised by the association, with the exception of disciplinary rules regarding doping in sport
  • appoint the national team and prepare them for the Olympic Games, Paralympics, deaf games, world championships or European championships
  • represent this sport in international sporting organisations.

So far, the ability to create a Polish sports association was reserved for organisations being members of an international sports federation operating in an Olympic or Paralympic sport or other federation recognised by the International Olympic Committee. That, at least for the time being (but maybe not for long anymore?), excluded any esports organisations.

The new law gives additional competences to the Polish Minister competent for physical culture, who will be able to specify, by regulation, a list of international sports federations not recognised by the International Olympic Committee, whose members will be able to obtain consent for the creation of a Polish sports association. This will be possible based on high popularity and level of development of a given sport, as well as the range of the international sports federations of organisations involved in that sport and their participation in the system of combating doping in sport.

Once the new law enters into force, the blooming Polish esports organisations will be able to institutionalise. The question is whether they will be interested in seizing that opportunity. After all, esports and traditional sports, although similar on many levels, also differ in many areas. It is not crystal clear whether having official organisations representing particular esports in Poland will be an interesting option. And, besides all that, whether the right holders of particular games will be willing to co-operate with an official Polish sports association,  trying to regulate what was once their exclusive domain.

Loot boxes in video games: the Polish approach in the European context

To start off the blog with an exciting topic, I thought I would summarise the current approach of Polish authorities regarding loot boxes in video games. However, before I do, I will start with a brief overview of the issue from the European perspective. To be sure, those shiny crates with random game-enhancing goodies for players have a turbulent history with national regulators, particularly violent in Europe.

Ever since the great Star Wars: Battlefront II controversy of 2017, more and more regulators and/or governments of European states have been taking stances on the topic, in particular in the context of their national gambling and children protection regulations.

Regardless of the details of the applied loot box mechanics, it has been argued that this element of chance, designed to keep players invested (and sometimes – also investing) in a game, forms a part of the compulsion loop, which may lead to gaming addiction (currently officially recognised by the World Health Organisation as a mental health disorder) and bears significant resemblance to gambling addiction.

Taking into account the above, and also the fact that many games involving loot box monetisation schemes are addressed to and/or commonly played by children, several European states decided to take action against loot boxes.

The particular approach of various states varies when it comes to qualifying loot box mechanics as gambling, since gambling regulations are mainly a domain of national, and not EU-level legislation. It is worth noting that the Dutch Gaming Authority and the Belgian Gaming Commission took the most strict approach so far, finding some loot box systems to be in violation of their gambling laws. This concerned games which both sell loot boxes and permit the transfer of yielded items (the Netherlands) or where there is no means to directly purchase in-game currency to obtain a specific item (Belgium). This resulted in several major publishers disabling or modifying loot box availability for Dutch and/or Belgian players.

Other countries, including France, Germany, the UK and Sweden have taken various steps to address this issue via a variety of competent authorities and commissions, all of which may be summarised in a warning: “We are watching you, loot boxes, and watching closely”. The lack of monetary value of the looted items and no participation of the publisher in any potential trade activities (“skin gambling”) are often raised as arguments against treating loot box mechanics as gambling. On the other hand, significant similarities to gambling and the involvement of underage players in games including loot box mechanics are factors that cannot be easily dismissed.

Now what is the stand of Polish authorities as regards loot boxes and gambling? For now, video game publishers do not have to worry about any fines or prosecution under Polish law. In a statement issued in February 2019, the Polish Ministry of Finance stated that loot boxes do not fall into any category of gambling games recognised by the Gambling Act of 2009, and consequently cannot be treated as gambling under Polish law. The Ministry stated that the mere fact of existence of an element of chance in a particular activity does not prejudge of its gambling character.

The way that the Polish law is formulated in that regard prevents the Polish regulator (the Ministry of Finance) to freely decide whether a particular activity should be considered gambling. The Ministry is limited by law to performing a test whether a particular activity fulfils the characteristics of one of the four types of gambling games recognised by the Gambling Act of 2009. Those are: games of chance, betting, card games and slot machine games, each of them described in detail in the act.

What emerges from the above statement of the Ministry of Finance, is that publishers offering loot boxes are safe in Poland, at least as long as the Gambling Act of 2009 is not amended in a way which would allow for treating loot boxes as gambling.

Should we expect any legislative change in that regard? In my opinion, that possibility should not be easily dismissed. This is, among other reasons, because of the strong call for harmonisation of national legislations, initiated by the Dutch and Belgian regulators. In 2018, during the annual meeting of the Gaming Regulators European Forum, representatives of gaming regulators from over 15 European states, including the UK, France, Ireland, Spain and Poland, as well as the State of Washington, USA, announced that they will work together to thoroughly analyse the characteristics of video games and social gaming in the light of national laws and regulations, as a result of controversies relating to skin betting, loot boxes, social casino gambling and the use of gambling themed content within games available to children. This common action by gambling authorities should “raise parental and consumer awareness regarding the transition between gaming for leisure and entertainment and the offering of gambling possibilities”.

I can see the above items as potentially compelling for policy makers. Besides, granting gambling licences for game publishers could also result in some additional, always welcome, budget revenue. What remains is to keep a close look on the works of the European and Polish policy makers and regulators, which we – at LegalPlay – are committed to do.