If 2015 was the year of esports going mainstream as “a new hope” for sports entertainment—with TBS’ ELEAGUE and ESPN’s Heroes of the Dorm as prime examples—then 2016 was the year “mainstream strikes back.”

Big stories this year were highlighted by one single theme: external forces getting into esports, both to nurture it and to regulate it. Of course, lots happened internally, including a debate regarding the monetization of the League of Legends esports scene. In many ways, the big business moves in 2015 and before are now making themselves felt in very real ways—and 2016 started many storylines that will continue for years to come.

But, to start it all out, we have to go back to the beginning.

The sale of (most of) Major League Gaming

The very beginning of the year saw game-changing deal between Activision Blizzard and MLG—a sale of “substantially all” MLG assets (including branding) that basically left ex-MLG nothing but a shell, with most MLG employees heading over to ActiBlizz.

The sale, which we created a detailed explainer for, was a big wakeup call for the esports industry. Many minority stockholders for MLG were left out in the cold, but it was a major win for both MLG and ActiBlizz fans—a combination that is bringing on the promising Overwatch League.

It served as a wake-up call to the industry that “big business” tactics—in this case, majority shareholders taking advantage of intentionally-lax Delaware state corporate law—are here to stay. This is a real industry now—amateur hour is over.

[perfectpullquote align=”full” cite=”” link=”” color=”” class=”” size=””]This is a real industry now—amateur hour is over.[/perfectpullquote]

Traditional sports (and colleges) got in

One of the things we didn’t foresee happening was the entry of numerous professional sporting organizations into the esports field. Nowhere was this more a trend than in FIFA, where it seemed like every professional football club wanted in.

Our report in October shows the wide scope of this trend, but even since then there’s been more activity, including a bulk of Celtic football clubs entering a Celtic esports league. The NBA also made a huge entry into esports, particularly in League of Legends, where most recently, a Milwaukee Bucks owner purchased Cloud9’s LCS spot and put his son in charge.

Collegiate esports also expanded, and big organizations like the PAC-12 stated interest. Meanwhile, Activision Blizzard created an exclusive collegiate league for Overwatch, and the independent Collegiate StarLeague saw big investments and partnerships.

Esports gambling and fantasy got real

Our prediction that gambling in esports would both grow and invite complications was entirely on point this year, as both became large themes. The first half of the year saw exponential growth within esports gambling, with CS:GO skin betting sites opening seemingly weekly, while scandals grew as well.

[perfectpullquote align=”right” cite=”” link=”” color=”” class=”” size=””]Valve stepped in. It wasn’t enough.[/perfectpullquote]

There’s no doubt to the popularity of esports fans betting on leagues and tournaments, but top personalities and players soon became embroiled in scandal, both for lacking transparency and very shady promotional tactics. The hammer soon dropped—Valve stepped in to ban weapon skin gambling.

Unfortunately, it wasn’t enough. Even though some companies initially complied, they soon reopened, along with even more newcomers. Valve is now facing both a class-action lawsuit (which was shut down on a federal level, but is said to be refiled soon to Washington state), and demands from the Washington State Gambling Commission, who could shut down Steam entirely (though, that’s very unlikely to actually happen).

Still, the industry at large took note, and many other developers are just opting to avoid the discussion altogether by purposefully avoiding anything in-game that could facilitate gambling. That, combined with the broader crackdown on daily sports gambling, has lead esports towards a natural (and thankfully more regulated) approach in mainstream bookmakers.

The rising tide of esports regulation

Government and esports intertwined even further in esports this year. Notable countries to address the growing interest in esports include France, the UK, Brazil, Spain, Canada, Germany, and Korea. All seem to be paving a path towards regulating and encouraging the growth of esports within their respective countries.

Of course, not all attention is good. China, for example, passed strict regulations on streaming, along with forcing game developers towards transparency.

In the United States, however, there was a surprising lack of attention. Despite a promotional esports event taking place in the White House, very little changed following a petition to recognize esports as an official sport to enable easier access to P1 visas for esports players. Potential changes to immigration law in the coming Trump presidency, unfortunately, could spell further difficulties for esports players seeking visas.

Transparency and conflicts of interest

One of the more underground trends this year regards large corporations purchasing multiple entities across the esports sphere. When done in secret, this could lead to major conflicts of interest that go ignored, definitely opening up the door for corruption. Of course, that’s where journalism steps in, and TEO indeed took a role in bringing some transparency to the industry.

Valve’s effort to shut down weapon skin gambling threw a wrench in the works for many big companies trying to buy in and cash out on the phenomenon. Vulcun, for example, lied about owning skin gambling site CS:GO Jackpot.

[perfectpullquote align=”right” cite=”” link=”” color=”” class=”” size=””]This story got much darker.[/perfectpullquote]

This story got much darker, however. We also looked into rumors that another gambling site, CS:GO Lounge, was owned by esports team Virtus.pro. We uncovered documents that showed Virtus owned a majority of CS:GO Lounge.

More digging brought even more scandal—as we brought to light that ESForce (who owns Virtus) also owns a majority share of rival team SK Gaming, along with media rights to yet another team, Natus Vincere. This is in addition to owning numerous Russian esports media companies, a Russian tournament organizer, and a Russian esports venue—all used to hold ESForce’s EPICENTER tournament.

We’d be remiss at this point to not point to ourselves, of course, who got called out for lacking disclosures about our own funding (we’re funded by Jens Hilgers’ BITKRAFT, ICYMI). Hilgers himself would soon be embroiled in scandal, as co-owner of G2 Esports, for giving a loan to rival team Fnatic, which would have given him ownership of Fnatic should the team fail to pay it back.

Unions, unions, and more unions

We called player and team representation as a top trend for 2016, and indeed saw many organizations form for this very reason. In May, it was ESL-funded WESA, who have since created firm arbitration rules.

Next up was the Brazilian team organization, ABCDE, who formed in August around an ongoing lawsuit between PaiN Gaming and Riot Games. Since forming, ABCDE has had to deal with multiple poaching allegations in the Brazilian scene, including one that rocked the organization—leading to its president forcibly resigning.

Last but not least comes the North American-based Professional Esports Association. Originally thought to be forming around a major League of Legends debate (covered below), PEA has since made major news in Counter-Strike for deciding to pull out from the ESL Pro League. This action led to a very public and messy debate that is currently ongoing between players, teams, and multiple CS:GO leagues. It’s clear that team unions will have a lot to work out in the coming year and beyond.

The Great Debate

The final topic is one a big too big to handle all at once, but here goes. The monetization of esports was a huge topic this year, and there’s still a lot that needs to be figured out.

Nowhere was this more prevalent than within the LCS, where a giant debate began in August. In short, LCS team owners felt that Riot Games had imposed too many restrictions on how they could operate, limiting their revenue while Riot climbed to nearly $2 billion. In one case, a sponsor threatened to leave League of Legends entirely after Riot forced a team to delete a YouTube video featuring the sponsor’s product.

[perfectpullquote align=”right” cite=”” link=”” color=”” class=”” size=””]LCS team owners felt that Riot Games had imposed too many restrictions on how they could operate, limiting their revenue while Riot climbed to nearly $2 billion.[/perfectpullquote]

Our take is simple: the LCS isn’t designed to be profitable, it’s designed to be a loss leader, and is therefore treated as such. Of course, that leaves team owners out in the cold when it comes to making money for themselves. There’s probably a better solution somewhere in the middle.

This all unfortunately led to an apparently holdout by team owners, who refused to sign an agreement for the upcoming season, raising concerns about the league structure, and in particular, relegation. We even heard from anonymous sources that Riot had used threats to allow poaching and to block team sales in order to get team owners to sign on.

Even if not true, Riot has appeared to buckle—at least a little bit—with some notable changes for the upcoming LCS season. Relegation has indeed been weakened (though not removed), while Riot is making a commitment towards increasing team revenues—welcome news after a $300 million deal Riot made with the MLB to broadcast the LCS (details TBD).

And finally, on the topic of poaching—particularly due to allegations that the only team not to hold out, Echo Fox, was contacting players against the rules—Riot issued a vague statement detailing that Echo Fox was not violating the rules due to the player in question’s contract not being in a contract database. Unsatisfying, but likely an end to story.

Whatever the case, teams are now signed up for next year, and many look to see how exactly Riot and the LCS mobilized to give teams a better return on their investments into the League of Legends scene. Getting it right could mean a new era of domination over the esports industry—while getting it wrong could mean handing over the title of top esport.