When most people think of the gig economy, we don’t usually think of professional video gamers.
But in the state of California, at least, we should.
While Uber and Instacart employment scandals continue to dominate headlines and plunge the future of the sharing economy into uncertainty, e-sports have quietly built a billion-dollar global industry on the backs of its athletes—i.e. professional gamers.
But as of Jan. 1, 2020, things are expected to change significantly for California’s gig workers with the state’s Assembly Bill 5 going into effect.
The new bill, referred to as AB5, is designed to crack down on a business model cherished by Silicon Valley—one which fuels the industry’s start-up culture, but has also led to a workforce riddled with poor working conditions, few employee protections, and rife with workers’ rights violations.
The ABCs of AB5
Essentially, AB5 requires companies to classify independent contractors as employees.
This could be a huge step forward for California’s many Uber and Lyft drivers, couriers, and delivery personnel, as well as anyone who earns income from jobs obtained through companies like TaskRabbit, Upwork, and other app-based services.
Representatives of gig companies have sued the state to try to block the legislature, claiming it unfairly bars workers from finding opportunities, and undermines the very purpose of the gig workforce. The same companies have lobbied to block similar legislation from taking hold elsewhere, including in New York City this past fall, when companies like Uber and Instacart opposed support of AB5-like legislation.
The bill could also mark a new era of employment for professional video gamers, many of whom are classified as independent contractors under California law.
Gaming industry workers have already been mobilizing with calls for better working conditions for developers, designers and programmers. With AB5 newly in effect, the industry’s e-sport athletes are now taking this opportunity to assert their rights.
AB5 is groundbreaking because of its powerful core presumption: It assumes that all workers are employees and classifies them as such unless an employer explicitly proves otherwise.
The bill’s basic ABC test says that a worker is presumed to be an employee unless the company can prove that the worker is: A) free from employer control; B) performs work that is outside the usual course or purview of the company’s business mission; and C) has adequate access to other independent business and entrepreneurial opportunities.
Riot Games is one of the country’s largest video game developers, and the owner of League of Legends, which has become the most popular video game on the market. The company pays its professional League of Legend players starting at a base salary of $75,000, but 2018 average gamer salaries surpassed $300,000.
Released in 2009, League of Legends is a multi-player online battle arena game. The genre was popularized by games like Defense of the Ancients and Warcraft 3, but League of Legends distinguished itself from these competitors by pioneering a new approach to game access: the free-to-play model.
The lack of financial barriers, paired with the fact that the game can be played on relatively low system specifications, has propelled League of Legends to incredible success worldwide.
With an enthusiastic fanbase, by 2010 the game was well-positioned to take the plunge into the then-fledgling world of competitive e-sports by forming the League of Legends Championship Series (LCS).
A decade later, League of Legends’ tournaments have higher viewership than the Super Bowl.
In 2018, Riot Games franchised the LCS and created 10 permanent teams.
Per US visa designations, LCS gamers playing on these teams are classified as professional athletes and are organized like players in traditional sports.
Just like traditional athletes, gamers compete on a packed and sometimes grueling season schedule. Injuries can derail their careers, and intense training regimens are common. Teams have superfans who speculate about rivalries on message boards and buy gamers’ official jerseys from Nike.
But in contrast to professional athletes in the traditional sports industry, League of Legends players are not considered employees. According to the 2019 Championship Series rules, gaming athletes are independent contractors and the Riot Games gamer contract does not define the employer/employee relationship.
Another contrast to traditional professional sports is the fact that gaming athletes compete in a sport operated and owned by one corporate entity. Anyone can form a league or team to play basketball, football, or soccer, because the actual sports are not trademarked by a company. But to join a League of Legends team, a gamer has to enter into contract with the parent company.
Riot Games therefore exerts enormous control over its athletes. The company mandates players salaries. Players practice in locations specified by by the company, and are often required to exclusively use team-owned equipment.
As a contention similarity to sports, the company has also restricted free speech, which we saw when League of Legends players were encouraged by John Needham, the global head of League of Legends e-sports, to “keep personal views on sensitive issues … separate” after a player was banned for one year for speaking out in support of the Hong Kong protesters while live streaming a game.
These athletes are a vital part of Riot Games’ business empire.—arguably more so than contractors who work for gig companies like Uber, which continues to bizarrely claim that its drivers are not a core part of its business model.
But just like the drivers that power the networks of Uber and Lyft, without professional players, Riot Games simply could not exist as it does.
Riot Games’ athletes are also afforded extremely limited entrepreneurial opportunities outside of their player contracts. The company places tight restrictions on sponsorships, even limiting athletes’ ability to earn an income outside the game by severely curtailing the types of sponsors players can accept. For a while Riot Games even restricted athletes from streaming other games that the company saw as competitors, although they ended up reversing that rule.
Under AB5, these and other factors indicate that League of Legends athletes are, indeed, employees of Riot Games and are thus legally entitled to employee rights, benefits, and protections. The gaming giant finds itself in a position to admit its wrongdoing in misclassifying its players as contract workers, and to quietly afford them the rights and protections that they deserve.
Making a play for the future
What could this mean for Riot Games’ professional video game players? It could mean that Riot Games owes labor costs such as unemployment insurance, health care subsidies, paid parental leave, overtime compensation, workers’ compensation, and minimum wage. And as for the legality of the dubious Riot Games-funded League of Legends Players’ Association, which many criticize as a blatant union violation created to placate players while maintaining full control, it could mean fines for a number of labor violations.
If the state rules that Riot Games is indeed misclassifying its athletes, it is probably also violating Section 8(a)(2) of the National Labors Relations Act—the section that essentially prohibits unions (in this case, a workers’ association) funded and controlled by employers.
While companies like Uber and Lyft continue to wage aggressive lobbying campaigns, Riot Games now has the chance to see this new era as the opportunity it is. By heeding the wake-up-call, and ensuring respect and protection of workers, the gaming publisher can establish itself as a model in the industry by doing everything it can to comply with AB5.
The benefits of following the law
As other professional sports leagues have shown, an employee model in the athletics industry can be incredibly profitable. Riot Games has already endured one episode of bad press for its treatment of female developers, and it’s come under fire along with other major gaming platforms for poor treatment of designers and developers.
There are no benefits to joining other share-economy companies in the seemingly endless depths of gig economy scandals.
As the e-sports industry continues to grow, gaming’s current wild west state of affairs will likely dissipate and regulation will come in, just like it always does. If Riot Games and other gaming developers like it keep pressuring players to accept unfair contract conditions, it’s clear who will end up the losers in this next round.