Asser International Sports Law Blog

Our International Sports Law Diary
The Asser International Sports Law Centre is part of the T.M.C. Asser Instituut

Invalidity of forced arbitration clauses in organised sport…Germany strikes back! - By Björn Hessert

Editor's note: Björn Hessert is a research assistant at the University of Zurich and a lawyer admitted to the German bar.

 

The discussion revolving around the invalidity of arbitration clauses in organised sport in favour of national and international sports arbitral tribunals has been at the centre of the discussion in German courtrooms.[1] After the decisions of the German Federal Tribunal[2] (“BGH”) and the European Court of Human Rights[3] (“ECtHR”) in the infamous Pechstein case, this discussion seemed to have finally come to an end. Well…not according to the District Court (LG) of Frankfurt.[4] On 7 October 2020, the District Court rendered a press release in which the court confirmed its jurisdiction due to the invalidity of the arbitration clause contained in the contracts between two beach volleyball players and the German Volleyball Federation[5] (“DVV”) – but one step at a time. More...

International and European Sports Law – Monthly Report – September - October 2020 - By Rhys Lenarduzzi


The Headlines


Human rights and sport  

Caster Semenya

Human rights issues are taking the headlines in the sporting world at present. A short time ago, Caster Semenya’s appeal at the Swiss Federal Tribunal against the CAS decision was dismissed, perhaps raising more questions than answering them. Within the last few days however, the message from the Semenya camp has been that this is not over (see here).  See the contributions from a range of authors at Asser International Sports Law Blog for a comprehensive analysis of the Semenya case(s) to date.

Navid Afkari

As the sporting world heard of the execution of Iranian Wrestler Navid Afkari, a multitude of legal and ethical questions bubbled to the surface. Not least of all and not a new question: what is the responsibility of sport and the governing bodies therein, in the space of human rights?  And, if an athlete is to acquire a high profile through sporting excellence, does that render athletes vulnerable to be made an example of and therefore in need of greater protection than is currently afforded to them? There are differing views on how to proceed. Consider the following from the World Players Association (Navid Afkari: How sport must respond) and that from the IOC (IOC Statement on the execution of wrestler Navid Afkari) which shows no indication through this press releases and other commentary, of undertaking the measures demanded by World Players Association and other socially active organisations. (See also, Benjamin Weinthal - Olympics refuses to discuss Iranian regime’s murder of wrestler).

Yelena Leuchanka

As this is written and relevant to the above, Yelena Leuchanka is behind bars for her participation in protests, resulting in several sporting bodies calling for her immediate release and for reform in the sporting world around how it ought to deal with these issues. As a member of the “Belarus women's national basketball team, a former player at several WNBA clubs in the United States and a two-time Olympian”, Leuchanka has quite the profile and it is alleged that she is being made an example of. (see here)

Uighur Muslims and Beijing Winter Olympics

British Foreign Secretary, Dominic Raab does not rule out Winter Olympics boycott over Uighur Muslims. ‘The foreign secretary said it was his "instinct to separate sport from diplomacy and politics" but that there "comes a point where that might not be possible".’ Though Raab’s comments are fresh, this issue is shaping as a “watch this space” scenario, as other governments might echo a similar sentiment as a result of mounting pressure from human rights activist groups and similar, in lead up to the Winter Games. More...



The Specificity of Sport - Comparing the Case-Law of the European Court of Justice and of the Court of Arbitration for Sport - Part 2 - By Stefano Bastianon

Editor’s note: Stefano Bastianon is Associate Professor in EU Law and EU sports law at the University of Bergamo and lawyer admitted to the Busto Arsizio bar.


1. EU law and the CAS case-law

Bearing in mind these questions, it is possible to affirm that under EU law, the specificity of sport

i) refers to the inherent characteristics of sport that set it apart from other economic and social activities and which have to be taken into account in assessing the compatibility of sporting rules with EU law; and

ii) under EU law these inherent characteristics of sport must be  considered on a case by case  basis, per the Wouters test as developed by the ECJ in the Meca Medina ruling.

Both aspects can be found in the CAS case-law too, although the CAS case-law shows some remarkable differences and peculiarities. From a general point of view, the application of the principle of specificity of sport in the CAS case-law represents an aspect of the more general issue related to the application of EU law by the CAS. However, the purpose of this paper is not to fully examine if and to what extent the CAS arbitrators apply EU law rules on free movement and competition; rather, the aim is to analyse the way the CAS deals with the concept of the specificity of sport, highlighting similarities and differences compared to the ECJ.

Taking for granted that ‘a CAS panel is not only allowed, but also obliged to deal with the issues involving the application of [EU] law’,[1] as far as the compatibility of sporting rules with EU law is concerned the CAS case-law shows different degrees of engagement. For instance, in the ENIC award concerning the so-called UEFA integrity rule, the CAS panel went through a complete competition-law analysis in perfect harmony with the Wouters et al. ruling by the ECJ.[2] On the contrary, in the above-quoted Mutu case, the issue of compatibility of the FIFA’s transfer regulations with EU competition law was analysed in a rather simple way, merely stating that the FIFA rules at stake were not anti-competitive under EU competition law without giving any reason to support this conclusion. More recently, in the Galatasaray and Milan A.C. awards, concerning the UEFA’s financial fair-play regulations, the CAS  applied a detailed analysis of EU competition law. However, in both cases, according to the CAS the proportionate character of sanctions listed in the UEFA’s financial fair-play regulations cannot affect the evaluation of the legitimacy of these regulations under Art. 101 TFEU. This conclusion represents a clear breaking point with respect to the ECJ case-law, according to which the evaluation of the restrictive effects of a rule necessarily presupposes the analysis of the proportionate character of the sanction imposed in the event of a violation of that rule as well.[3]   In regard to EU free movement, the CAS case-law tends to be less analytical in terms of the principle of proportionality. For instance, in the RFC Seraing award  which concerned both EU free movement and competition law, the CAS panel mainly focused on the legitimate objectives of the contested rule (FIFA’s ban on Third-Party Ownership – TPO), merely affirming that the restrictive measures under EU free movement were justified and inherent in the pursuit of those objectives.More...



The Specificity of Sport - Comparing the Case-Law of the European Court of Justice and of the Court of Arbitration for Sport - Part 1 - By Stefano Bastianon

Editor’s note: Stefano Bastianon is Associate Professor in EU Law and EU sports law at the University of Bergamo and lawyer admitted to the Busto Arsizio bar.*

 

1. Introduction.

The so-called specificity of sport represents one of the most debated, if not the most debated, but still undefined issue under European Union (EU) law. A noteworthy peculiarity is that the specificity of sport is frequently mentioned in several legislative and political documents issued by EU institutions, however it is not expressly referred to in any judgment by the European Court of Justice (ECJ).Conversely, the Court of Arbitration for Sport (CAS) case-law on Art. 17 of FIFA Regulations on status and transfer of players (RSTP) has repeatedly and expressly referred to the specificity of sport.[1] Apparently, the concept of specificity of sport has different meanings and purposes in the ECJ and CAS jurisprudence. In this blog (divided in two parts), I will try to analyse those two different meanings and to what extent the CAS case-law is consistent with the concept of specificity of sport as elaborated under EU law. More...

SFT rejects Semenya appeal: nothing changes - By Andy Brown

Editor's note: Andy Brown is a freelance journalist who has been writing about the governance of sport for over 15 years. He is the editor of The Sports Integrity Initiative where this blog appeared first.


For the last three days, I have been struggling with what to write regarding the Swiss Federal Tribunal’s (SFT) Decision to dismiss a challenge from Caster Semenya and Athletics South Africa (ASA) against the Court of Arbitration for Sport’s (CAS) Decision to dismiss a challenge to the Eligibility Regulations for the Female Classification (Athletes with Differences of Sex Development), otherwise known as the DSD Regulations. From reading World Athletics’ statement welcoming the ruling, one could be forgiven for thinking that it had won a major trial. Sports journalists, accustomed to covering events now curtailed by Covid-19, focus on the fact that Semenya has ‘lost’ her case against the DSD Regulations. Neither assertion is strictly accurate.

The SFT’s powers to review the CAS’s ruling are severely limited. It can only consider whether the CAS Decision violates ‘widely recognised principles of public order’ on Swiss public policy grounds. The SFT has only reversed a decision based on a a violation of Swiss public policy once in 30 years.

The SFT didn’t reconsider the evidence put forward to the CAS. ‘For there to be incompatibility with public policy, it is not enough that the evidence has been poorly assessed, that a finding of fact is manifestly false or that a rule of law has been clearly violated’, its Decision reads. ‘The only question to be resolved is in fact whether or not the verdict of the CAS renders the referred award incompatible with substantive public policy’. 

There were questions about whether the appeal from Semenya and ASA qualified to be reviewed by the SFT in the first place. World Athletics is a private organisation headquartered in Monaco, and the SFT was troubled as to whether such a complaint brought by a South African athlete against an overseas private organisation is capable of violating Swiss public policy.

‘It is doubtful whether the prohibition of discriminatory measures falls within the scope of the restrictive concept of public order when the discrimination is committed by a private person and occurs in relations between individuals’, the Decision quotes from its pervious 29 July 2019 Decision, which refused the ASA’s request to provisionally suspend the application of the DSD Regulations. ‘In any event, there is no need to examine this question further here since […] the award under appeal does not in any way establish discrimination which would be contrary to public order’

The SFT ruled that the CAS was correct to uphold conditions of participation for 46 XY DSD athletes in order to guarantee fair competition for certain disciplines in female athletics. In doing so, the SFT was ruling on whether the decision taken by the CAS violates public policy, based only on the complaints brought forward by Semenya and ASA. 

Semenya and the ASA had challenged the CAS Decision based around the idea that the DSD Regulations are discriminatory. The CAS held that they are discriminatory, but agreed with the IAAF (as World Athletics was then named) that such discrimination was necessary to protect its female category. The SFT ruled that even if the discriminatory rules of a private organisation such as the IAAF were considered able to pose a threat to public order, Semenya and the ASA had failed to demonstrate that the CAS Decision was so egregious that it posed such a threat.

‘Caster Semenya essentially alleges a violation of the prohibition of discrimination’, reads the Swiss Federal Supreme Court statement. ‘The CAS has issued a binding decision based on the unanimous opinion of the experts who were consulted that testosterone is the main factor for the different performance levels of the sexes in athletics; according to the CAS, women with the “46 XY DSD” gene variant have a testosterone level comparable to men, which gives them an insurmountable competitive advantage and enables them to beat female athletes without the “46 XY DSD” variant. Based on these findings, the CAS decision cannot be challenged. Fairness in sport is a legitimate concern and forms a central principle of sporting competition. It is one of the pillars on which competition is based. The European Court of Human Rights also attaches particular importance to the aspect of fair competition. In addition to this significant public interest, the CAS rightly considered the other relevant interests, namely the private interests of the female athletes running in the “women” category.’

Such strong support for the principle behind its DSD Regulations was rightly welcomed by World Athletics. Its statement asserted that the SFT ‘acknowledged that innate characteristics can distort the fairness of competitions’. I would argue that the SFT ruling didn’t do this, but rather found that a CAS Decision asserting this didn’t violate Swiss public policy. Semantics, perhaps.

Likewise, when World Athletics quotes the SFT Decision as confirming that ‘It is above all up to the sports federations to determine to what extent a particular physical advantage is likely to distort competition and, if necessary, to introduce legally admissible eligibility rules to remedy this state of affairs’, it is paraphrasing two texts quoted in the SFT Decision. The first is ‘La qualification juridique des rules autonomes des organizations sportive’ by Jérôme Jaquier, 2004. ‘Inborn characteristics specific to athletes in a particular group can also distort the fairness of competition’, the SFT Decision quotes from Jaquier. ‘When they enact regulations, the objective of sports federations is to ensure fair and equitable competition’.

The context of the second quote, from ‘Sportrecht – Berücksichtigung der Interessen des Sports in der Rechtsordnung’ by Martin Kaiser, 2011, is even more interesting. It is preceded with a statement from the Swiss Federal Supreme Court, which reads: ‘It is not for the Federal Court to make, abstractly, comparisons between the disciplines to assess whether a particular athlete has an advantage that makes sporting competition meaningless’

‘It is above all for the sporting federations to determine to what extent a particular physical advantage is liable to distort competition’, the SFT Decision quotes from Kaiser. ‘And, if so, to establish legally admissible eligibility rules to remedy this state of affairs’. 

Again, such details might be considered as semantics. But – I would argue – important semantics. Reading the media maelstrom that has resulted from the SFT Decision, one could be forgiven for assuming that Semenya has lost her case, and has no chance of ever defending her 800m title. However, a statement issued by her lawyers reveals that she intends to challenge the ruling in European and domestic courts.

“I am very disappointed by this ruling, but refuse to let World Athletics drug me or stop me from being who I am”, the statement continues. “Excluding female athletes or endangering our health solely because of our natural abilities puts World Athletics on the wrong side of history. I will continue to fight for the human rights of female athletes, both on the track and off the track, until we can all run free the way we were born. I know what is right and will do all I can to protect basic human rights, for young girls everywhere.” More...



The Semenya Decision of the Swiss Federal Tribunal: Human Rights on the Bench - By Faraz Shahlaei

Editor's note: Faraz Shahlaei is a JSD Candidate at Loyola Law School, Los Angeles. His research and teaching interests are public international law, international sports law, international human rights and dispute resolution.

 

The issue of international human rights was a central contention in Caster Semenya case ever since the start of her legal battle against the regulations of the IAAF. However, the human rights arguments were poorly considered in the two proceedings related to this case. To put it in perspective, it is like having a key player nailed to the bench throughout the whole game; no coach ever tried to give it a chance while it had the potential to be the game changer for all parties.

In 2019, the Human Rights Council, the inter-governmental human rights body of the UN, expressed concern over issues of discrimination in sports in particular regarding IAAF female classification regulations. In June 2020, the United Nations High Commissioner for Human Rights submitted a report to the United Nations Human Rights Council on the “Intersection of Race and Gender Discrimination in Sport”. The report draws a detailed picture of how human rights in the Semenya case have been violated and also elaborates on the inherent problem of addressing human rights issues in alternative dispute resolution mechanisms favored by the sport governing bodies. However, despite an in-depth discussion of Caster Semenya’s case at both the CAS and then the SFT, the question of human rights, a key concern and a fundamental pillar of the case, hasn’t been adequately answered yet! More...


The SFT’s Semenya Decision under European human rights standards: Conflicting considerations and why a recourse could be successful at Strasbourg - By Kevin Gerenni

Editor's note: Kevin Gerenni is Assistant Professor in Public International Law (Facultad de Derecho de la Universidad de Buenos Aires) and LLM Candidate 2021 in Public International Law at the London School of Economics.


Even though the decision rendered by the SFT in the Semenya Case was foreseeable, the Tribunal did put forward some concerning reasoning in terms of public policy (“ordre public”) and human rights. In case Semenya decides to challenge the Swiss state before the ECtHR, one can expect the case to shake some grounds at the ECtHR, which would be faced with the question of the application to sport not of fair trial guarantees (as in Mutu & Pechstein) but of substantial human rights provisions such as the prohibition of discrimination on the basis of sex (Article 14 ECHR) and the right to private life (Article 8 ECHR).

Under Swiss law, the reasons that may lead to the annulment of an arbitral award are enumerated in art. 190 of the Swiss Private International Law Act (PILA). Semenya’s strongest case relied on art. 190(2)(e): the award’s incompatibility with public policy. Naturally, this point concentrated most of the SFT’s attention. In order to analyze the compatibility of the CAS award with Swiss public policy, the SFT focused on three main potential breaches of human rights: prohibition of discrimination, personality rights, and human dignity. In doing so, it put forward certain observations that differ with European human rights standards and the ECtHR’s jurisprudence. The purpose of this short article is to analyze those discrepancies and, consequently, Semenya’s prospects of success before the Strasbourg Tribunal.More...


Selected procedural issues –and questions– arising out the Caster Semenya Judgment of the Swiss Federal Tribunal - By Despina Mavromati

Editor's note: Dr Despina Mavromati is an attorney specializing in international sports law and arbitration (Sportlegis Lausanne) and a UEFA Appeals Body Member. She teaches sports arbitration and sports contracts at the University of Lausanne, Switzerland

 

As the title indicates, this short note only deals with selected procedural issues and questions arising out of the very lengthy Semenya Judgment. In a nutshell, the SFT dismissed Semenya’s appeal to set aside the CAS Award, which had denied the request of Caster Semenya (Semenya, the Athlete) to declare unlawful the Differences of Sex Development (DSD) Regulations of World Athletics (formerly IAAF).[1]

At the outset, it has to be reminded that the CAS Award dealt with the merits of the Semenya case in a final and binding way by rendering an arbitral award according to Article R59 of the CAS Code (and Article 190 of the Swiss Private International Law Act – PILA). Therefore, the SFT did not act as an appellate court but rather as a cassatory court, entitled to review only whether the exhaustively enumerated grounds for annulment set out in Article 190 (2) PILA were met (and provided that they were properly invoked and substantiated in the motion to set aside said award).More...

Caster Semenya Case Exposes Design Flaws in International Sports Governance - By Roger Pielke Jr.

Editor's note: Roger Pielke Jr. is a professor at the University of Colorado Boulder

 

The decision this week by the Swiss Federal Tribunal not to revisit the arbitral decision of the Court of Arbitration for Sport (CAS) in the case of Caster Semenya was not unexpected, but it does help to expose a major design flaw in international sports governance. Specifically, the institutions that collectively comprise, create and enforce “sports law” appear incapable of addressing flawed science and violations of basic principles of medical ethics.

While different people will have different, and legitimate, views on how male-female competition classifications might be regulated, the issues highlighted involving science and ethics are not subjective, and are empirically undeniable. In normal systems of jurisprudence, procedures are in place to right such wrongs, but in sports governance processes in place prevent such course corrections. And that is a problem.

The empirical flaws in the science underpinning the IAAF (now World Athletics) Semenya regulations are by now well understood, and have been accepted by WA in print and before CAS (I was an expert witness for Semenya, and was present when IAAF accepted responsibility for the flawed research). You can read all the details here and in the CAS Semenya decision. I won’t rehash the flawed science here, but the errors are fatal to the research and obvious to see.

One key part of the comprehensive institutional failures here is that the journal which originally published the flawed IAAF research (the British Journal of Sports Medicine, BJSM) has, inexplicably, acted to protect that work from scrutiny, correction and retraction. Normally in the scientific community, when errors of this magnitude are found, the research is retracted. In this case, the BJSM refused to retract the paper, to require its authors to share their data or to publish a critique of the IAAF analysis. Instead, upon learning of the major errors, the BJSM published a rushed, non-peer reviewed letter by IAAF seeking to cover-up the errors. All of this is non-standard, and a scandal in its own right.

The violation of basic principles of medical ethics required by the implementation of the WA Semenya regulations is also not contested. Both WA and the IOC have claimed to uphold the World Medical Association’s Helsinki Declaration on medical and research ethics. Yet, the WMA has openly criticized the WA regulations as unethical and asked doctors not to implement them. In response, WA has stated that it will help athletes who wish to follow the regulations to identify doctors willing to ignore medical ethics guidelines.

Flawed science and ethical violations are obviously issues that go far beyond the case of Caster Semenya, and far beyond sport. In any normal system of jurisprudence such issues would prove readily fatal to regulatory action, either in the first instance of proposed implementation or via review and reconsideration.

Sport governance lacks such processes. At CAS, the panel claimed that matters of scientific integrity and medical ethics were outside their remit. The SFT is allowed to reconsider a CAS decision only on narrow procedural grounds, and thus also cannot consider matters of scientific integrity or medical ethics. So far then, the flaws in the WA regulations – sitting in plain sight and obvious to anyone who looks, have not been correctable.

This leaves the world of sport governance in a compromised position. Some may look past the scientific and ethical issues here, perhaps judging that barring Semenya from sport is far more important that correcting such wrongs. 

Regardless of one’s views on sex and gender classification in sport, the WA regulations and the processes that produced and have challenged them reveal that sports governance has not yet entered the 21st century. Science and ethics matter, and they should matter in sport jurisprudence as well.  It is time to correct this basic design flaw in international sport governance.

Caster Semenya at the SFT – in 10 points - By Jack Anderson

Editor's note: Jack Anderson is Professor and Director of Sports Law Studies at the University of Melbourne

 

1.     Caster Semenya appealed to the Swiss Federal Court (SFT) arguing that World Athletics’ regulations violated human rights principles relating to gender discrimination and human dignity. The Swiss Federal Tribunal (as at CAS) held that World Athletics’ regulations may prima facie breach such human rights principles but were “necessary, reasonable and proportionate” to maintain fairness in women's athletics;


2.     Although in part addressed at the SFT, expect further legal argument on this in the domestic courts of South Africa or at the ECtHR, and in the following ways:

  • Necessity - is the athletic advantage that Caster Semenya has of such a scientifically-measurable extent that it is necessary for World Athletics to intervene in such an invasive manner? In a broader ethical sense, is the incidence of what the World Athletics’ regulations call “difference of sex development” of such prevalence in the general population, and specifically in middle-distance athletics, that, by way of the principle of “sporting beneficence”, intervention is justified. Or, in contrast, is the incidence of DSD not at a level which justifies a departure from the ethical principle of primum non nocere – first, do no harm?
  • Reasonableness - if World Athletics’ regulations are necessary, is the manner of implementation reasonable and in line with the principle of human and bodily integrity? In answering such a question, the focus must be on the fact that in order to continue to compete in her favourite events (such as the 800 metres) Caster Semenya will have to lower her testosterone level through medication;
  • Proportionate - if World Athletics’ regulations are necessary and reasonable is the manner of implementation proportionate? In answering such a question, the focus must be on whether the regulations disproportionately discriminate against a certain, limited group of athletes in a certain, limited number of events and in a certain, limited manner.More...


Asser International Sports Law Blog | League of Legends European Championships - Challenging the Boundaries of Sport in EU Law - By Thomas Terraz

Asser International Sports Law Blog

Our International Sports Law Diary
The Asser International Sports Law Centre is part of the T.M.C. Asser Instituut

League of Legends European Championships - Challenging the Boundaries of Sport in EU Law - By Thomas Terraz

Editor’s note: Thomas Terraz is a third year LL.B. candidate at the International and European Law programme at The Hague University of Applied Sciences with a specialisation in European Law. Currently he is pursuing an internship at the T.M.C. Asser Institute with a focus on International and European Sports Law.


1.     Introduction

The surge of e-sports has stimulated a lively discussion on the essential characteristics of sport and whether e-sports, in general, can be considered a sport. However, one should not overlook the fact that e-sports encompass a broad range of video games that fundamentally differ from one another. Thus, as one commentator recently underlined, “the position of video games and the e-sport competitions based on them should be analysed on a case-by-case basis.”[1] In this spirit, this blog aims to provide a concise analysis of one of these e-sports, League of Legends (LoL), and one of its main competitions, the League of Legends European Championship (LEC), to assess whether it could be considered a sport in the sense of EU law. The LEC offers a fascinating opportunity to examine this issue especially since the previous European League of Legends Championship Series (EU LCS) was rebranded and restructured this year into the LEC.

 

2.     What is League of Legends and the LEC?

At the time of writing, LoL released nearly a decade ago by Riot Games (a game developer based in the USA) and rapidly became one of the most played video games in the world due in part to its free to play business model. This means that anyone can download and play LoL on their computer without ever having to pay anything. In-game microtransactions exist but do not provide any competitive advantage. The game itself involves two teams of five players who each control a ‘champion’, which are characters in the game that each possess unique abilities. A team only wins when it has destroyed the enemy base (‘nexus’). The game is not only a popular video game, but it is a popular e-sport. The most recent world championships finals attracted 99.6 million unique viewers. While these numbers are greatly due to its popularity in China and South Korea, there is also a sizeable European viewership of LoL. For example, the LEC regular season matches have reached a record-breaking 355,000 concurrent viewers in its 2019 spring competition.

The LEC is LoL’s highest level of European competition and is owned and organised by Riot Games who establishes and enforces the rules which apply to the teams participating in the LEC. Consequently, Riot Games is truly at the apex of professional LoL in Europe by setting both the in-game parameters (the rules of the game) and the regulations that govern its competitive play. As explained earlier, Riot Games restructured and rebranded its previous European competition, EU LCS, into the LEC. While previously the EU LCS was characterised by a pyramid structure with a promotion and relegation system familiar to the European sports world, the LEC introduced a franchise model to follow its sibling competition in North America, the League Championship Series (LCS). The LEC itself is a limited liability company registered in the Republic of Ireland as League of Legends European Championship Limited.[2] The LEC buy-in fee for teams already in the EU LCS was reportedly set at 8 million euros and 10.5 million euros for those outside the EU LCS. Additionally, big brands such as KIA, Shell, Foot Locker and Red Bull sponsor the LEC and are featured during the broadcast. Besides being produced and diffused weekly by the official Riot Games English broadcast team in a professional studio in Berlin on Twitch (an online video game livestreaming service) and YouTube, the LEC partners with other official broadcasters who provide coverage of the matches in other languages (French, Spanish, Polish, German, Italian). Nevertheless, before examining the LEC’s position under EU law, a review of the broader arguments on the fundamental traits of sport will contextualise the Court of Justice of the European Union’s (CJEU) interpretation of the concept of sport.

 

3.     Is LoL played in the LEC a sport competition?

The academic discourse on the definition of sport has provided a plethora of elements and conditions for an aspiring sport to meet in order to be considered a ‘real’ sport. Needless to say, this blog will not be able to address all of them. However, the characteristics identified by Suits and elaborated by Jenny et al. and Abanazir are a good starting point for this brief review.[3] Suits explains that sports are in essence games that require skill, where the skill requires physicality, that the game have a wide following, and that this following have a certain level of stability. Abanazir delved into the concept of stability in the e-sports context by explaining institutionalisation’s central role in achieving permanence.

On the first requirement, there is very little room to argue that professional LoL does not require a great amount of skill. Suits explains that games of skill provide ‘unnecessary obstacles’ (in relation to daily life) “to realize capacities not otherwise realizable” that do not rely on pure chance.[4] Playing LoL is not in any way a necessary part of human life, yet many players practicing LoL play to refine and improve their mechanical skill (the physical element of the game, e.g. muscle memory and reflexes). Chance sometimes plays a role in LoL, but it is rarely a decisive factor in determining the outcome of a competitive match. Generally, Riot Games has taken steps over the years to limit the elements of pure luck in its game.

The role of physical motor skills in e-sports has been explained in detail by van Hilvoorde and Pot, and this blog will not dive into the arguments on whether actions taken in a video game can be considered taking place in the ‘real’ world.[5] Assuming that it does, the skill required in LoL is intrinsically connected to its physicality. LoL is played on a computer with a mouse and a keyboard. High level play requires precise movement of the arm, wrist and/or hand to most effectively control one’s character with the mouse. Additionally, the clicks and inputs registered by one’s fingers on the mouse and keyboard must be timed precisely and with enough practice these movements become muscle memory. The classic example of a game that does not require this sort of physicality is chess because the manner in which one moves a chess piece from a to b does not affect the result of the game. On the other hand, LoL demands precise and timed movements of the player’s arms, wrists, and/or fingers to be played optimally. One can be a LoL strategic genius but without a sufficient level of mechanical skill, it is impossible to become a professional LoL player.

Next, a large following is probably the easiest criteria for LoL and the LEC to fulfil. Between the large viewership that watch the LoL events online and the thousands of spectators that come to watch the championships live, there is very little doubt that LoL and the LEC have a wide following at the moment. However, this point leads into the next element which arguably may be the hardest criteria for it to satisfy in the long term: stability.

Video games and consequently, e-sports, generally reach a point where they have achieved their max popularity and eventually begin to lose players and viewers. Often times, this is the result of newly released video games pushing older and ‘outdated’ games out of the spotlight. LoL has remained at the forefront of e-sports for nearly a decade and there is little suggestion that this will change in the near future. Part of this is Riot Games’ continued support of LoL by regularly updating the game. Updates are released nearly every other week and can range from graphical improvements, balancing the game to ensure the viability of new strategies, the introduction of new champions (currently 143 champions) and tweaks that improve the way the game runs on the computer. Abanazir describes that changes such as these “present a double-edged sword” because while they keep the game fresh for players, they can result in drastic changes to the best strategies (meta) to win the game.[6] Thus, professional teams and players must continually adapt their play to conform to the meta. Nevertheless, updates have never fundamentally changed the goal and overall ‘rules’ of the game. Professional LoL is always two teams of five players, each controlling one champion, aiming to destroy the enemy nexus.

From an outsider’s point of view, it may seem that the constant flux of the meta would truly damage any of LoL’s claim to stability. However, in this context, it is imperative to highlight the institutionalisation of the LEC. Institutionalisation describes the appearance of “standardisation of rules, the formalisation of learning of the games, the development of expertise and finally the emergence of coaches, trainers, officials and governing bodies.”[7] The very fact that the meta often changes have pushed professional teams to hire analysts that review the team’s play and are constantly searching for new and creative ways to play LoL. Additionally, all professional teams have at least one coach who not only define the team’s strategy before each game, but also ensure that players observe strict practice schedules. During LEC matches, referees (Riot Games employees) are always present in order to ensure that the LEC rules are observed, which greatly lends to the idea of a ‘standardisation’ of the rules.[8] In fact, Riot Games directly state that the creation of the LEC Rulebook is to help “unify and standardize the rules used in competitive play.”[9] From this outline, there are many indications that the LEC and LoL have many of the characteristics of a sport and currently have achieved a certain amount of stability and institutionalisation. The true test will be whether these structures continue to last as they have been developed and implemented over the past eight years.

 

4.     A Sport under EU Law?

Recently, the Court of Justice of the European Union (CJEU) ruled on whether the English Bridge Union could benefit from a sports exemption under the VAT Directive and in doing so examined the concept of sport under that Directive.[10] Furthermore, in this case, Advocate General (AG) Szpunar provided an enlightening opinion to the Court examining the concept of sport in the context of the VAT exemption.[11] Both provide a good opportunity to infer how the Court would perhaps go about determining whether the LEC is a sport competition under EU law. This being said, the sport exception in the current VAT Directive would not apply to the LEC since Article 132 (1) (m) applies only to services provided by non-profit organisations. Nonetheless, should League of Legends European Championship Limited eventually restructure into a non-profit, it would not be far-fetched to imagine a situation in which it would seek to have VAT reimbursed from authorities under a sports exception in the future. After all, Riot Games has repeatedly stated that it does not make a profit on its e-sport activities.[12]

The AG’s opinion began by explaining that the concept of sport in the exemption should be “interpreted in a narrow manner, while bearing in mind the purpose and objective of the exemption.”[13] From this it is clear that the analysis of the concept of sport differs depending on the applicable provision, which could mean that the LEC could be considered a sport competition under one provision and a purely economic activity in another context. The AG goes on to identifying elements which preclude an activity from being considered a sport and states that “where a physical element is not necessary, sport is defined by competition and the fact that equipment is provided by not just one supplier -  which excludes activities without a broad basis in civil society, such as commercial products in the market place, designed by firms for pure consumption (for instance video games).”[14] If this interpretation of the concept of sport had been endorsed by the CJEU, it would have constituted a tremendous obstacle for the LEC. Indeed, if the ‘equipment’ also encompasses the game itself, it is impossible to argue that Riot Games does not hold a monopoly over the supply of LoL. Moreover, Riot Games has made and continues to support LoL in order to make money. In analysing this opinion, Abanazir explains the core issue well: “e-sport competitions based on video games created for purely consumption purposes and organised by persons aimed to profit from these activities may find themselves out of the scope as they are perceived to be devoid of social function.”[15] Indeed, it can seem difficult for the LEC and LoL to argue that it has a deeper ‘social function’ but perhaps this requirement might not be completely insurmountable. An argument could be made that the e-sports aspect of LoL is not only a commercial product made for pure consumption especially because LoL is a free to play game, and Riot Games does not seem to be making any profit in its e-sport related activities. Riot Games and the LEC have also taken steps to enhance the social function of LoL by investing in regional leagues to develop local talent.

In its ruling on the Bridge case, the CJEU sidelined the AG’s approach and decided to focus on a physicality requirement. The Court, in examining the specific VAT provision, found that sport must be “characterised by a not negligible physical element,” and the fact that an activity has elements of competition, professionality and organisation were not deemed sufficient to argue that the activity is a sport for the VAT exemption.[16] Physicality was the central criteria in the CJEU’s interpretation of the concept of sport, but in doing so, it did not give any further clarity as to the threshold of physicality required for an activity to benefit from the VAT sport exemption. It has already been contended above that LoL does have a clear physical element which is intrinsically connected to the game’s skill, yet the question remains whether the physicality would be considered more than negligible by the CJEU.

In summary, if LoL and the LEC were to be examined under the VAT Directive sport exemption, it would be confronted with several challenges. The approach endorsed in the AG’s opinion would have been the most problematic since LoL is mainly a commercial product designed to attract consumers and ultimately profit a private company. However, the CJEU chose to focus its interpretation of the concept of sport on a physicality criterion. This decision may give the LEC a wide enough window to argue that the fine motor skills involved in LoL are enough to fulfil this condition.


5.     Conclusion

In its current form, the LEC would not be able to benefit from the sport exemption in the VAT Directive, but this is just one provision of EU law, and there could be other opportunities where it could attempt to claim to be a sport. In the meantime, this gives an opportunity to Riot Games to continue to develop and emphasise the social function of its e-sports competitions, which might entail building a not-for-profit entity to run the competition and to strengthen the redistribution of economic gains to the grassroots. In any case, LoL and the LEC share many characteristics with established sports, but it remains to be seen if this will be enough to boost its recognition as a ‘real’ sport in law and society.


[1] Cem Abanazir, ‘E-sport and the EU: the view from the English Bridge Union’ (2019) International Sports Law Journal 102.

[2]LEC Rules’ (LoLEsports).

[3] William Morgan, Ethics in Sport (3rd edn, Human Kinetics 2018) ch 1: Elements of Sport by Bernard Suits; Seth Jenny et al., ‘Virtual(ly) Athletes: Where eSports fit within the definition of “Sport”’(2016) Quest 1; Cem Abanazir, ‘Institutionalisation in E-Sports’ (2019) Sport, Ethics and Philosophy 117.

[4] Morgan (n 3) ch 1.

[5] Ivo van Hilvoorde and Niek Pot, ‘Embodiment and fundamental motor skills in eSports’ (2016) Sports, Ethics and Philosophy 14.

[6] Abanazir (n 3).

[7] Jenny et al. (n 3); Abanazir (n 3).

[8] See LEC Rulebook Art. 8.15.

[9] LEC Rules (n 2).

[10] Case C-90/16 The English Bridge Union Limited v Commissioners for Her Majesty’s Revenue & Customs ECLI:EU:C:2017:814.

[11] Case C-90/16 The English Bridge Union Limited v Commissioners for Her Majesty’s Revenue & Customs ECLI:EU:C:2017:814, Opinion of AG Szpunar.

[12] Steven Asarch, ‘“League of Legends” cuts esports budget, can Riot Games bounce back?’ (Newsweek, 28 August 2018); Derrick Asiedu head of Global Events at Riot Games confirmed this in a Reddit post: “We’re a long way from breaking even (revenue minus cost equalling 0)”.

[13] English Bridge Union Opinion (n 11) para 21.

[14] English Bridge Union Opinion (n 11) para 38.

[15] Abanazir (n 1).

[16] English Bridge Union (n 10) para 19, 25.

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