Mentioned in this article Teams: Dignitas

Tomorrow, June 23, is the day the UK votes on whether or not to stay in the European Union. The decision will have major consequences, for the UK, for Europe, and for the rest of the world. A lot has been written and discussed in the past few weeks, with both the “Remain” as well as the “Leave” campaigners fighting with no holds barred. Tragically, the heated atmosphere even led to the murder of British Labour Party politician Jo Cox, one of the loudest advocates to remain in the European Union.

As someone who feels and thinks himself more of a European than a German citizen, it’s disheartening to see how toxic this debate has become. Personally, I think it’s a terrible idea to leave the EU. However, as a journalist who tries to classify information regardless of his personal opinion (to the extent deemed possible), I will put away my feelings and political views, and analyze the situation from a neutral place.

The Brexit

A quick summary: Brexit, or “British exit,” is a potential schism of the UK from the rest of the European Union, which the UK joined in the 1970s during an economic downturn. Following the Great Recession of the late-2000s and similar economic crises in European countries like Greece, and facing complicated issues like immigration from countries that some view as undesirable, several political voices in Britain pushed for a referendum to leave the EU. UK Prime Minister David Cameron, seeking re-election in 2015, promised such a vote, which will take place on June 23.

Over the course of the last weeks, I’ve spoken to a handful of—mostly British—esports experts to gather information and perspectives on the issue. The main question was: How could the Brexit impact the esports industry? At this point, I admit that my research is not exhaustive. It can’t be. Because if we have learnt one thing from the whole debate, it is that we know nothing for sure. To quote Joe Hills, Associate Director at AGP, a London-based recruitment business with particular focus on esports:

[perfectpullquote align=”full” cite=”” link=”” color=”” class=”” size=””]“The UK government cannot even put a number on how much of our legislation is bound to the EU. They use a range of 15 to 50 per cent which represents a world of difference when discussing the political sovereignty of the UK.”[/perfectpullquote]

It’s a bitter pill to swallow, keeping in mind how important the question of staying or leaving is in a historic context, but unfortunately, no one knows exactly how the UK leaving the EU would impact the UK or its international partners—which is a problem, of course. It’s impossible to debate on what is right and wrong without having the facts straight. The only way open for us is to most closely approximate what a Brexit would do. Somewhere between the in-depth analyses of economy PhDs from Oxford University and the gut-feeling of an apple farmer from Upton Snodsbury, there is truth.

Brexit and esports: the good

What do we know for sure about the possible impacts the Brexit could have on esports? To challenge my personal opinion, I’ll start with the theoretical benefits a leave decision could have on our industry, especially the UK scene.

(1) With its reputation as a low-tax, business-friendly EU member state—particularly when it comes to sports, culture and digital business—the UK could excel on this matter once unbound from existing economic and legal frameworks of the EU. Esports business in the UK could become more attractive, financially and structurally. Esports lawyer Jas Purewal elaborates:

[perfectpullquote align=”full” cite=”” link=”” color=”” class=”” size=””]“This idea of the UK as a small but nimble country able to strike trade deals with anyone and focus on its strengths is one of the major arguments of Brexit supporters. However, it is worth bearing in mind again that to our knowledge there has been no research yet regarding how Brexit would impact on the UK digital industries, including video games or esports.”[/perfectpullquote]

(2) Britain would have more legislative freedom to make an informed decision on whether to recognize esports as a sport without having to follow or comply with any future regulation from Brussels.

And, despite the UK government turned a blind eye on esports for the longest time, progress is within sight. The eGames initiative, launched on April 6 at the London Games Festival 2016, is officially supported by the UK government. Back then, Ed Vaizey, UK’s Minister of Culture made a promising statement:

[perfectpullquote align=”full” cite=”” link=”” color=”” class=”” size=””]“The eGames promises to be an exciting venture that will give esports competitors across the UK even more opportunities to showcase their talents on an international stage. I welcome the ambitions of the IEGC and their efforts to promote the UK as a leading nation in the esports sector.”[/perfectpullquote]

Team Dignitas owner Michael O’Dell went into rapture about the announcement. “Finally the government acknowledged that we exist,” O’Dell said at the European eSports Conference London 2016. Yes, the political atmosphere is changing in favor of esports in the UK. If the Brexit would slow down or accelerate things, we don’t know. O’Dell made his stance on the referendum very clear, though. On June 6 he tweeted:

eSports works in the EU please vote to stay! — Michael O’Dell (@dignitasODEE) June 4, 2016

Brexit and esports: the bad

There’s one fact about our industry that nobody can change: esports is international. In our games, any one fan’s loyalty is likely to trend more towards individuals and teams, as opposed to nationality, exceptions prove the rule. Just like in soccer, players get transferred between teams across all borders, and tournaments take place all over the world. And that is where things get difficult.

[perfectpullquote align=”right” cite=”” link=”” color=”” class=”” size=””]UK players seeking to work in other EU countries… would be confronted with more paperwork–and vice versa.[/perfectpullquote]

(1) If the UK ceases its EU membership, troubles surrounding visa issues and work permits will increase. Right now, Article 45 of the Treaty on the Functioning of the European Union (TFEU) is in action. It governs that EU citizens are entitled to work and reside within another EU state without a need for a work permit and also be entitled to all benefits that country may provide them. If Britain leaves the EU, Article 45 is obsolete. In the context of esports, UK players seeking to work in other EU countries (like Berlin, Germany where the EU LCS takes place for example) would be confronted with more paperwork–and vice versa. And paperwork is costly, in time and money alike.

“Whilst the UK isn’t a strong hotbed for international esports talent, the likes of Raymond “KaSing” Tsang or Nate “Ataraxia” Mark (the esports player with the highest earnings in the UK according to esportsearnings.com) would face visa issues down the line,” fears Hills.

Additionally, without the so-called freedom of movement, the UK could become a less attractive place to host events or run businesses. The same is true for the movement of goods.

(2) Leaving the EU would also mean suspending existing trade arrangements with EU states as well as its international partners. As a possible result, almost every industry would have to deal with reduced trade and sales rates. That is also true for esports goods and services like team’s merchandise for example. Now that merchandise is not playing the biggest role in esports yet, it might not end up too bad at all. Anyhow, it has to be stated that a potential import duty would raise the prices of these goods, particularly compared to competitors within the EU.

[perfectpullquote align=”right” cite=”” link=”” color=”” class=”” size=””]80.6 per cent of UK games companies want to stay in the EU.[/perfectpullquote]

That is also one of the reasons why a great majority of UK’s games industry actually is in favor to remain. According to a survey of its members carried out by UK games trade body UKIE in April, 80.6 per cent of UK games companies want to stay in the EU. Only 3.2 per cent backed the Brexit, while the remaining 16.2 per cent were undecided about how they are going to vote.

To stress the importance of this point, I’ll refer to US President Barack Obama, who in April warned that if the UK left the EU, it “is going to be in the back of the queue” when it comes to trade deals. The message is clear—the UK would have to renegotiate brand new trade deals, and other countries would not have a high priority on these negotiations, as the UK would stand alone.

(3) While we already mentioned how the Brexit could positively influence the recognition of esports in the UK, it could turn out exactly the opposite way. In fact, the EU has opened up options recently, to boost its members’ ability to commercialize digital products, including video games and esports. Its “Digital Single Market” strategy, still in its early days, could have a significant positive influence on European esports in the future, according to Purewal:

[perfectpullquote align=”full” cite=”” link=”” color=”” class=”” size=””]“Specifically regarding esports, there are a number of positive future ways in which the EU could support esports which the UK would lose if it left the EU. For example, there is potentially substantial funding available to sports and cultural initiatives.”[/perfectpullquote]

Bresports?

The only sure thing about the upcoming referendum vote is that none of these changes will come overnight. The mills of policy and bureaucracy grind slowly, and the aftermath of the voting result won’t be visible at a glance. Regarding esports, I doubt that the industry will be harmed critically, although, I think the UK scene will face new and unnecessary challenges if Brexit passes.

No matter how UK votes tomorrow, the campaigning about the issue has changed the EU already. Unfortunately, for an international industry, nationalistic trends will always be disruptive to most of our plans. Agree with it, or disagree, but in the end, we can only work with what our political systems put forth. Learning to work within those systems, ultimately, is esports’ only option.