Canadian Lawyer

50 www.canadianlawyermag.com ESPORTS SPECIAL REPORT A growing industry This deal is not an anomaly — it signals a wider trend in what is fast becoming a signif- icant new industry. There is a lot happening in esports, with global revenue tripling over the last few years and a similar trend hap- pening in Canada, and the legal profession is responding to the opportunity. "The market's just booming," says Sabrina Bruno, an associate at McCarthy Tétrault LLP in Toronto, a member of the firm's global gaming consultancy MT Play and an avid gamer herself. She adds that her team has "a lot of things in the works as we speak." Although a lot of the esports deals in Canada have been private, Peter Czegledy, a corporate/commercial lawyer at Aird & Berlis LLP and leader of the firm's esports & gam- ing group, says there are "very meaningful developments" in Canada. There are esports leagues being estab- lished in Canadian cities, such as Mason's deal involving the Vancouver Titans and a deal by Gowling WLG's Jason Saltzman, a business law partner and member of the firm's sports and entertainment group, in which he represented OverActive Media Group in securing the Toronto Defiant Franchise, also in the Overwatch League. The Toronto team is slated for home games, to be played at Roy Thomson Hall, in this year's season. There are also major tournaments being hosted in Canada, with the opening of the first esports-specific arena in Richmond, B.C. last year, and educational institutions such as the University of British Columbia and the University of Toronto are offering esports scholarships. "Resort, entertainment, gambling and hos- pitality businesses are all looking to under- stand how to integrate esports into new or existing facilities," Czegledy says, adding that there are also independent lounge or cafe- style venues popping up. "Canada has even added 'gamer – video games' as a national occupational classification under the cate- gory of 'athletes.'" IN THE SUMMER of 2018, the owner of the Vancouver Canucks, the Aquilini Investment Group, was approached about renting out the Rogers Arena for several weeks for an esports competition. The prize for the competition was $35 mil- lion, and the tournament was well attended. "That made the Canucks sports and enter- tainment management think twice," says Rob Mason, a partner at Norton Rose Fulbright. "With that kind of a purse and that kind of popularity, it was clear this was a growing sector that was moving quickly." Soon after, the ball was rolling on a whirl- wind 14-month transaction resulting in the largest public esports deal in Canada to date, including four different financings, two acquisitions and a reverse takeover, creating one of the world's largest gaming industry players. A cross-border team of lawyers from Toronto, Calgary, Vancouver, Dallas and New York worked on the deal with the resulting assets including eight esports teams, more than 50 esports influencers, more than 100 gaming media websites and in excess of 900 YouTube and Twitch channels. The newly merged organization, Enthusiast Gaming Holdings Inc., notably purchased a non-con- trolling stake in the Vancouver Titans, the top-seeded team in the Overwatch League 2019 playoffs. Mason, who co-led the deal, said nobody had seen anything like it in terms of so many different deals closing simultaneously. The resulting company — which he calls the "first true mover in the public market" — started trading in early September 2019. "I'm not aware of any other company in the world like ours, and along the way it was a great opportunity to meet the young gam- ing entrepreneurs who were just in it for the gaming … and along the way ended up becoming the leaders of this new consoli- dated company," he says. For the love of the (video) game Canadian law firms are rising to the challenge as the esports industry spreads like wildfire around the globe, writes Mallory Hendry

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