How to register a cyber sports organization
eSports is rapidly growing from a niche activity to a mainstream phenomenon, attracting millions of fans in CS GO matches, celebrity endorsements, and betting opportunities. This booming industry intersects with various legal areas, including gambling, media, intellectual property, and labor laws. To succeed, businesses should seek expert legal advice for selecting jurisdictions, licensing, and setting up operations.
Understanding Cyber Sports and Betting on Cyber Sports
Cyber sports, or esports, are competitive online multiplayer video games where professional and semi-professional players compete for significant financial prizes. Fans follow these games avidly and often place bets using fiat currency, cryptocurrency, or virtual items. Popular games include League of Legends, Counter-Strike, and Dota 2, with CS GO daily updates keeping fans engaged. With an estimated 2.7 billion players globally, the growing demand for tournaments offers abundant opportunities for entrepreneurs and investors.
Steps to Register a Cyber Sports Company
To launch a cyber sports company, follow these essential registration steps. Beyond opening a bank account or entering into an agreement with a payment system, several critical tasks must be completed.
Choice of Legal Form
Selecting the right legal structure is crucial for the successful development of a cyber sports business. Common options in most countries include LLCs (or their equivalents), partnerships, and various forms of partnerships. For those planning to establish a smaller cybersports organization, individual entrepreneurship might be suitable. However, entrepreneurs aiming to organize professional competitions are advised to choose LLCs, as they typically offer protection from personal liability.
Company Establishment
Founding a cyber sports company begins with choosing a unique and memorable name that complies with legal requirements. Different jurisdictions may impose specific naming rules, such as prohibiting certain words or requiring the name to be in the national language. It’s wise to prepare several name options in case your preferred choice has already been made.
Preparation of Necessary Documents
The documentation required to start a cyber sports company may vary by country. Generally, the following documents are commonly needed:
- Business Plan
- Certificates of residence for the owner and shareholders
- Bank statements verifying the financial solvency of beneficiaries and the legal origin of funds
- Passport information and profiles of owners and shareholders
Obtaining Licenses and Permits
Intellectual property, including logos, videos, photos, and product designs, is often a valuable asset in the cybersports industry. Our experts can help you protect these assets. Whether you need assistance with obtaining a cyber sports license, copyright, trademark, licensing rights, or resolving an intellectual property dispute, our attorneys are ready to provide professional support.
Tax Registration
Although taxes are one of the less enjoyable aspects of starting a business, they are essential for legal operation. The amount of tax you pay, if any, depends on where your cyber sports company is registered. Some jurisdictions impose income and gambling taxes, while others do not. Our experts will clarify the financial obligations specific to your chosen jurisdiction.
Staff Recruitment
For a successful cyber sports team, key roles include a CEO/manager, administrator, hiring manager, professional instructors/coaches, and sales/marketing specialist. Additionally, every business should have an accountant and legal consultant. Following these steps ensures a strong foundation for your cyber sports company.
Challenges and Risks in the Esports Industry
Esports, a rapidly growing industry with new titles added annually, faces significant challenges due to a lack of regulatory framework. Key issues include difficulty accessing partner programs, an unstructured market, lack of direct B2B contacts, and overpriced services with varying quality. The sector is also vulnerable to cyberattacks and reputational risks, which can lead to financial and reputational damage. Despite increasing support from governments and the global community, unprepared entrepreneurs and investors often encounter setbacks in this complex and evolving field.