Esports Athlete, Ratzow, Exposes Major Payment Problem
Last year Paladins created major controversy by not paying their athletes.
Patrick “sleeppyy” Ratzow, former captain of the Mousesports’ Paladins team, exposed Hi-Rez for not paying its Paladins athletes. Ratzow had won the Masters LAN Gauntlet tournament. After many failed attempts to receive his prize money, he resorted to Reddit to call out the game publisher(Hi-Rez). While Ratzow was not a Paladins Premier League(PPL) athlete his post went viral and resulted in an investigation to all leagues and tournaments. The investigation revealed that Hi-Rez was not paying each PPL team $250,000 annually.
This scandal rocked the world of esports. Not because the claim was outrageousness, but actually the opposite. Different stakeholders (players, agents and managers) and multiple professional esports leagues came forward with similar problems. It brought the issue of athlete non-payment to the forefront of the esports industry.
No real solution came from the scandal. Hi-Rez did reach out to Ratzow to solve his specific non-payment issue, but at the industry level, the only solution that came from this was an increased awareness of the widespread athlete non-payment issue. So, unfortunately, esports athletes are still very much at risk of not getting paid. It is no secret that the esports industry is guilty of major stakeholders (ie. Hi-Rez) scamming athletes.
WHAT CAN BE DONE TO CHANGE THIS?
First, someone needs to hold esports as an industry accountable. If you have done any reading on esports, you will be tired of seeing the industry be referred to as ‘the Wild West’, but it really is. There is no regulatory body to set the rules and regulations and the subsequent penalties for non-compliance. Esports athletes are young and susceptible to exploitation, signing complex contracts without reading or understanding the fine print. We are starting to see this type of regulatory body take form through the initiatives of WESA - an organization that aims to bring “fairness, transparency, and integrity” to the esports industry.
However, outside of a regulatory body holding the scrupulous stakeholders accountable, there is an obvious technology solution that can be implemented to aid the situation - smart contracts.
Had Ratzow or any of the PPL organizations signed a smart contract with Hi-Rez, non-payment is not possible as payments are automatically executing according to the terms of the signed contract. A smart contract runs on the blockchain and is thus encoded into an unchanging, hack-proof ecosystem. All vested parties would have concurrent access to a single version of the contract. The smart contract can execute a number of complicated tasks that cost organizations time and money. In the instance of Ratzow and Hi-Rez a smart contract could:
Check the game publisher had the funds to pay all of the winners
Allow athletes to register and compete.
Confirm and verify results
Automatically disperse the appropriate prize pools to the appropriate athletes.
No chasing down of payments, no disputes over how much is owed, no making sure the payment goes to the right hands. All athletes, organizers and teams would also be able to see how the prize pool was distributed and prevent threats to Hi-Rez’s brand in the future.
Not only do smart contract enforce compliance with the regulations, they also save tournament organizers and team owners time and money. They automate the tedious process of contract negotiation and signing, increasing efficiency. and saving the organization from costly disputes. Legal battles over non-payment between athletes and tournament organizers or teams, can drag on for months and see an ever-increasing bill of legal fees. Not to mention, accusations can cost organizations their reputation.
Smart contracts would provide the esports industry with what it so desperately needs - trust and transparency.
Want to learn more about smart contracts in the professional sports world? Click here