By Jeffrey Levine, JD, PhD – Associate Clinical Professor, Department of Sport Business Esport Business Program Lead, Drexel University
On June 26, 2025, John Needham, Riot Games’ President of Publishing & Esports, announced that the company would reverse its long-standing prohibition on gambling sponsorships (Needham, 2025). In an open letter, Needham explained that betting operators would now be permitted as sponsors for tier-one League of Legends and Valorant teams. He justified the move by pointing to the immense unregulated betting market already surrounding Riot’s titles, estimated at $10.7 billion in global turnover in 2024. Since Riot had previously been excluded from both the revenue opportunities, Needham argued that embracing esports gambling would allow it the ability to shape standards and provide oversight within this space.
Riot’s reversal comes after years of resisting the growing trend of betting sponsorships in esports and reflects a broader industry shift. The company acknowledged that mounting pressure from partner teams, eager to unlock new revenue streams, was a key factor in its decision. Framing esports betting as both a rapidly expanding market and a potential solution to the industry’s ongoing financial sustainability challenges, Riot emphasized that its rollout would be managed in a responsible manner. Yet while betting sponsorships may deliver significant revenue, the greater test lies in how effectively Riot establishes and enforces safeguards within this sector.
In its announcement, Riot emphasized that the new policy will be governed by a set of “guardrails” meant to balance the influx of betting sponsorship money with protections for players, fans, and the integrity of competition. All prospective betting partners must first pass Riot’s vetting process and secure approval before linking with a team. To further reduce risks of manipulation, sponsors are required to use official data provided by GRID, ensuring transparency and legitimacy in wagering markets. Teams entering into such partnerships will also be expected to adopt internal policies that protect competitive integrity, shield younger audiences, and highlight responsible gambling practices. Riot has additionally pledged to reinvest a portion of the sponsorship revenue into Tier 2 esports by bolstering prize pools, creating new tournaments, and expanding integrity training programs. Notably, betting brands will not appear on Riot’s broadcasts, channels, or team jerseys, maintaining a gambling-free environment across its primary platforms.
The fan response to Riot’s announcement on community forums and message boards was largely negative, as there were concerns that deeper ties to betting could fuel toxicity, increase the likelihood of match-fixing, and worsen rates of problem gambling (McWhertor, 2025). Younger audiences, who remain highly engaged in esports, may be particularly susceptible to exploitation if industry stakeholders treat them as a key source of revenue amid the sector’s ongoing financial struggles. Riot’s history with luck-based monetization systems further raised doubts about the company’s capacity to manage gambling responsibly (Jones, 2025). Beyond economic risks and integrity issues, discussion also pointed to potential mental health consequences, drawing parallels to the well-documented pressures professional athletes face in traditional sports (Franklin, 2025).
Legal Issues and Legal Implications
Allowing gambling sponsorships exposes Riot and its teams to a complex web of gambling regulations across multiple jurisdictions regarding gambling advertising. Each state has its own laws regarding gambling advertising, especially as it relates to minors and online platforms. For instance, states like Maine and Ohio have implemented strict advertising regulations, including bans on targeting minors and problem gamblers (Staudenmaier & Carrasco, 2024). Therefore, Riot and its partners face heightened compliance risk when their broadcasts and promotional content are distributed nationally and internationally. Even unintentional exposure of restricted audiences could trigger enforcement actions, fines, or reputational damage.
The Federal Trade Commission (FTC) plays a key role in overseeing advertising practices in the United States, including those involving gambling sponsors. Its mandate is to ensure that advertisements are not deceptive, misleading, or unfair to consumers, particularly in sensitive areas like online gaming and sports wagering. For instance, it would be in the purview of the FTC to scrutinize the advertising campaigns related to esports betting that could exaggerated players’ chances of winning or induce buying behavior based on false pretenses. This could bring into focus the importance of accuracy and transparency in gambling promotions. As a result, Riot and its affiliated teams must carefully vet and structure all promotional content to align with FTC standards, ensuring that sponsorship messaging remains accurate, transparent, and responsibly targeted to avoid similar federal scrutiny.
The introduction of betting into esports increases the risk of match fixing and other forms of competitive manipulation such as bribery, raising significant integrity concerns. Riot’s mandate that partnered leagues and organizations implement internal integrity programs and monitoring reflects an effort to mitigate these risks, yet questions remain about the consistency and effectiveness of enforcement. In esports, where audiences skew younger and may lack experience in assessing gambling risks, the stakes for ensuring integrity and clear protections are especially high. Without consistent enforcement, those commitments risk becoming more symbolic than substantive.
U.S. gambling operators are bound by strict legal duties to promote responsible play and protect consumers, including preventing underage participation and mitigating gambling addiction. The stakes of failing to meet these obligations were underscored in Baltimore’s recent lawsuit against DraftKings and FanDuel, which accuses the companies of deceptive marketing practices aimed at vulnerable gamblers (Greenberg & Lavigne, 2025). For Riot and its partner teams, sponsorship agreements with betting companies therefore carry both legal and contractual risks. Any deal must be structured with transparency, accurate messaging, and strong safeguards to remain compliant with Riot’s rules, local laws, and platform terms of service. If a team or sponsor violates these requirements, whether through misleading ads, underage targeting, or breach of contract, Riot may face pressure to sanction the team, terminate the sponsorship, or intervene directly to protect its brand. And if Riot knowingly permits or amplifies questionable gambling promotions on its platforms, regulators could plausibly argue complicity, raising the stakes far beyond ordinary sponsorship disputes.
Conclusion
Riot Games’ decision to allow esports gambling sponsorships is a significant shift, reflecting both the financial pressures facing the industry and the scale of the unregulated betting market already surrounding its title. This seems like the entry point of embracing betting as part of the esports ecosystem. While the move promises new revenue streams and greater oversight of gambling activity, it also introduces heightened risks of match fixing, underage exposure, and predatory advertising practices that have already drawn regulatory action in traditional sports wagering.
Although Riot has announced various safeguards, the move raises complex legal questions spanning regulatory compliance, protection of minors, competitive integrity, and consumer protection. The effectiveness of these measures will ultimately depend on how consistently they are enforced and whether they evolve alongside rapidly changing gambling regulations. The stakes are especially high given the reputational and financial risks of even a single misstep. For Riot, the issue is not simply adopting safeguards but demonstrating credible accountability to its stakeholders. In a sector already under scrutiny for its monetization models, Riot’s approach to betting will serve as a litmus test for whether esports can balance growth with integrity.
References
Franklin, A. II. (2025, Jun. 28). Riot Games is opening up esports to betting. And we’ve all seen how well that’s going in other places. Vice. https://www.vice.com/en/article/riot-games-is-opening-up-esports-to-betting-and-weve-all-seen-how-well-thats-going-in-other-places
Greenberg, D., & Lavigne, P. (2025, Apr. 3). Baltimore sues DraftKings, FanDuel, alleging misleading tactics. ESPN. https://www.espn.com/espn/betting/story/_/id/44520842/baltimore-sues-draftkings-fanduel-alleging-misleading-tactics
Jones, A. (2025, Jun. 27). Desperate to avoid saying ‘we want that $10 billion,’ League of Legends dev Riot Games tries to justify legalizing esports gambling sponsors, but players aren’t buying it. GamesRadar. https://www.gamesradar.com/games/league-of-legends/desperate-to-avoid-saying-we-want-that-usd10-billion-league-of-legends-dev-riot-games-tries-to-justify-legalizing-esports-gambling-sponsors-but-players-arent-buying-it
McWhertor, M. (2025, Jun. 27). Valorant, League fans lash out against Riot’s new gambling rules. Polygon. https://www.polygon.com/news/609652/valorant-gambling-league-of-legends-sports-betting-riot
Needham, J. (2025, Jun. 26). Why we’re opening betting sponsorships in esports & how we’re doing it responsibly. Riot Games. https://www.riotgames.com/en/news/esports-betting-sponsorships
Staudenmaier, H. M., & Carrasco, M. (2024, Nov. 11). Wagers and warnings: The state of sports betting advertisements. American Bar Association. https://www.americanbar.org/groups/judicial/resources/judges-journal/2024-fall/wagers-warnings-state-sports-betting-advertisements/
