Esports: Navigating the Sticky Landscape of Minor Contracts

Esports: Navigating the Sticky Landscape of Minor Contracts

09 April, 2020 , , , 4012

By: Tatianna Dunne

Esports has taken over internet gaming by establishing itself as an international sensation. The internet sport is capturing the minds of millions of fans by establishing itself as the new internet gold rush.[1] Fans and gamers all over the world have rushed to be a part of the new esports landscape.[2] The teams that have formed all over the world include gamers from all ages.[3] Specifically, many gamers that are underage have joined teams and are included in the payment of millions of dollars in prize money that teams split between the players after winning tournaments.[4]

Underage players bring a complicated set of rules and regulations to the world of Esports.[5] Teams that include child Esport players are required to follow the applicable federal and state wage and hour laws that encompass child labor.[6]Esport teams are required to report the accurate age information of its players to ensure compliance of the state and federal wage and hour regulations.[7] California is a leading state in labor and employment laws, some of which deal with child labor and education.[8] California applies different regulations depending on the age of the individual, minors that are 14 to 15 may be treated differently than teens who are 16 or 17 years old.[9] Following the applicable state and federal laws for underage players should be a major priority to team owners. Teams who do not comply with the regulations can be susceptible to civil or criminal charges that include fines and or imprisonment.[10]

In addition to the state and federal regulations teams will have to comply with to host underage players, navigating the landscape of minors and contracts can be tricky. In general minors do not have the legal capacity to enter into a binding contract unless it’s court approved or a state statute permits.[11] The legal capacity of a minor results in a contract that is voidable at the discretion of the minor.[12] Voidable contracts remain valid and binding unless the minor decides to cancel it.[13] Although several states have create statutes that enable contracts to remain enforceable for employment contract if approved by a court.[14] For example “…California law enforces employment contracts signed by a minor if the child is providing artistic or creative services…the contract must be approved by a court in order to be binding to the child.”[15]  

Due to the rapid explosion of Esports, existing law may not cover these types of “employment contracts” with minor Esport players and leave teams vulnerable. It is unlikely that a court in California would view Esport as a creative or artistic service. Meaning child players are able to get around any contractual terms bargained for at any time the child decides to void the team contract. 

Current child labor issues present in the Esport industry shed light on legislation that needs to be passed in order to keep up with emerging industries. Regulations should be created that deal with minor Esport players and the validity of team contracts. Additionally, team owners should research and follow all applicable state and federal child labor and employment laws and regulations. Compliance will ensure the team is not liable for civil or criminal fines and penalties.            

[1] AJ Willingham, What is eSports? A look at an explosive billion-dollar industry, CNN (Aug. 27, 2018, 2:18 PM), https://www.cnn.com/2018/08/27/us/esports-what-is-video-game-professional-league-madden-trnd/index.html.

[2] Id.

[3] Id.

[4] Id.

[5] Jonathan Stoler, 10 Labor and Employment Considerations in Esports*, SheppardMullin (June 12, 2019), https://www.lawofthelevel.com/2019/06/articles/esports/labor-employment-considerations-esports-athletes/.

[6] Id.

[7] Id.

[8] Id.

[9] Id.

[10] Id.

[11] Jenny Tsay, Is It Legal to Sign a Contract With a Minor?, FindLaw (March 5, 2014, 8:00AM), https://blogs.findlaw.com/law_and_life/2014/03/is-it-legal-to-sign-a-contract-with-a-minor.html.

[12]Id.

[13] Id.

[14] Id.

[15] Jenny Tsay, Is It Legal to Sign a Contract With a Minor?, FindLaw (March 5, 2014, 8:00AM), https://blogs.findlaw.com/law_and_life/2014/03/is-it-legal-to-sign-a-contract-with-a-minor.html.