QLASH CEO urges Italy to regulate esports at Chamber of Deputies event

Luca Pagano, chief executive and co-founder of esports organisation QLASH, called for specific regulation of esports in Italy at an event at the Chamber of Deputies in Rome on 14 October. The event, held in the Sala del Refettorio, was titled "E-sport e fiscalità nell'economia digitale". Pagano said operating in an unregulated sector gives no legitimacy to his profession or his company, and that without regulatory, economic and fiscal certainty it is difficult to attract investors, convince sponsors and protect young people.

Pagano said QLASH was founded eight years ago in Treviso and has developed divisions including professional players and academies, where it taught young people not only to play but to grow. He said the organisation has worked with football clubs including Inter, Milan and Villarreal, developed activities with influencers and organised tournaments and events both live, at trade fairs such as Milan Games Week and Lucca Comics & Games, and online through its own platform.

Pagano described the esports industry as resting on four pillars: the competitive aspect, the media aspect, the organisational aspect and the publisher. He said organisations such as QLASH cover three of the four but do not control the most important, the companies that own the video games. He said the publisher is the most critical and sensitive part, probably the one that earns the most, and the one that can decide to pull the plug, and that companies like his do not control the whole value chain because the most important part is missing.

On access to capital, Pagano said a structured investor looks at what a company does, its numbers and the markets in which it operates, and asked why such an investor should put money into a business working in a context of economic, regulatory and fiscal uncertainty. He said that during the Covid-19 pandemic esports received particular attention from large brands, partly because they were one of the few forms of competitive entertainment able to continue, but that many companies reduced their interest once traditional sports events and promotional channels returned. He said this was not because traditional sport necessarily works better for advertising, but because it is a safer and better-known product, and that a marketing manager finds it difficult to justify spending €100,000 or €200,000 in a sector perceived as poorly structured and without consolidated regulatory references.

Pagano said esports should be regulated because it involves young people who need protection, and that a system of clear rules would also define players' duties towards professional organisations alongside their rights. He said he had dealt with hundreds of young people whom he was forced to classify under image-rights contracts, because he could not impose organisational obligations on them without creating an employment relationship. He said the contracts he could offer had practically no value and the players knew it, and that contractual uncertainty penalises both organisations and professionals.

Pagano said he has worked in esports for about 10 years and was told at least two or three times during that period that it was the year zero, after which the following year seemed to be back to year minus one. He said that in countries where regulation has arrived there was a year zero, followed by year one, year two and year three. He said that even if the sector were not considered sufficiently significant in revenue terms, the presence of thousands of young people involved in competitive activities would still make it necessary to define rules, responsibilities and protection instruments, and that esports means young people and sociality and must mean regulation.

Pagano also commented on a publication dedicated to esports law and taxation presented at the event, saying a product like it would perhaps have been more useful a couple of years earlier, and that maybe there is still time or the sector is in extra time. He said such legal and fiscal analysis could help legislators, investors, media and companies interested in advertising activities understand the sector's value and potential.