ESL tight-lipped on controversial 1xBet partnership as deal is extended

Esports tournament organizer ESL has deflected questions about its partnership with betting company 1xBet, which has been declared bankrupt by a court in Curaçao.

In March 2021, ESL unveiled 1xBet as the “first-ever exclusive global betting partner” of the ESL Pro Tour in CS:GO and ESL One Summer and Winter in Dota 2. According to the tournament organizer, the partnership included a range of custom segments in CS:GO and Dota 2 broadcasts, including “data driven player impact cards, match predictions, and custom maps.”

The announcement of the global partnership was met with widespread indignation and criticism due to the reputation of the Russian-founded betting platform, which is headquartered in Cyprus and has a license issued in Curaçao, a Caribbean island tax haven.

In 2019, a Sunday Times investigation into 1xBet’s global activities had revealed that the platform promoted a “pornhub casino” with topless couriers, took bets on children’s sports and cockfighting, and advertised on websites that streamed Premier League matches illegally.

In a comment to Esports News UK in 2021, ESL said that it was “aware of allegations made against one of our partners”, and vowed to investigate the matter. “Integrity is a number one priority for ESL,” the company reiterated at the time. But almost 18 months have passed, and ESL is yet to reveal the results of the investigation.

The deal was due to run “throughout the entirety of 2021 and up to IEM Katowice 2022”, an event that ended in February. But 1xBet’s logo continues to be displayed on the broadcast of ESL’s top CS:GO and Dota 2 competitions and on the company’s official website.

The partnership has been extended, ESL confirmed to Dexerto, but it’s unclear why there has been no announcement to that effect.

But ESL is not the only esports company with which 1xBet is partnered. It sponsors a number of esports organizations, including OG, Team Spirit and MIBR, as well as HLTV.org’s CS:GO world rankings.

In March 2021, WePlay, a Ukrainian tournament organizer, also landed in hot water after agreeing to a “long-term partnership” with 1xBet. “WePlay Esports and 1xBet: partnership of leaders” was how the Ukrainian company described the deal, which included “all WePlay Esports tournaments over 2021”, starting with the WePlay Ultimate Fighting League (WUFL), a multi-game league featuring Mortal Kombat 11, Soulcalibur VI, and Tekken 7.

The announcement led to fierce criticism from the fighting game community. Weeks after the conclusion of the first season of the WUFL, which ran between March 25 and April 11, 2021, developers NetherRealm (Mortal Kombat) and Bandai Namco (Tekken and Soul Calibur) issued similar statements to announce that they would no longer be working with WePlay due to a difference in vision.

Contacted by Dexerto, WePlay alluded to a February 26 statement announcing that the company had “terminated all partnership agreements with companies from Russia” following the invasion of Ukraine. WePlay also stated that WUFL Season 1 was the “last project” it collaborated on with 1xBet. “After that, we didn’t have any joint projects or integrations within our products,” WePlay said.

1xBet bankrupt

At the end of 2021, a court in Curaçao declared 1xBet’s parent company, 1X Corp N.V., bankrupt for failing to return funds to customers. This followed a class action lawsuit filed in August 2021 by the Foundation for the Protection of Victims of Online Gambling (SBGOK), which collects and investigates claims against online casinos with a Curaçao license.

On May 6, the Curaçao Court of Justice upheld an appeal from SBGOK against a decision from a Court of First Instance to dismiss the bankruptcy claim against 1X Corp.

Court documents show that the group of players represented by SBGOK claim that they are owed almost 1.65 million Netherlands Antillean Guilders, the equivalent of $920,000 USD. According to the Curaçao Chronicle, one of the players is an Israeli gambler who is allegedly owed $255,000 by 1xBet.

As part of the bankruptcy proceedings, Arend de Winter, a lawyer in Curaçao, was appointed as a trustee by the court to wind up the company. He told independent magazine Josimar that he contacted Curaçao eGaming requesting that 1X Corp’s licence be canceled.

“As the only valid representative of 1X Corp, I am saying to cancel their licence but [Curaçao eGaming] are saying it will cause a lot of damage,” Mr. de Winter said.

Despite the court ruling, 1xBet continues to offer its services in multiple countries around the world. On August 1, it signed a three-year deal with Paris Saint-Germain to become the French football club’s regional partner in Africa and Asia before expanding to other regions from next season onwards. This is despite the fact that 1xBet cannot operate in France. “This is an illegal site in France and has resulted in a large number of blocking orders,” a member of ANJ, France’s national gambling authority, is quoted by L’Equipe as saying.

France is one of several countries where access to 1xBet is restricted. The list also includes the United States, the United Kingdom, Spain, Poland, and the Netherlands, among others.

In the UK, 1xBet blocked access to its website following the Sunday Times investigation. Premier League clubs Chelsea, Liverpool and Tottenham all ended sponsorship deals with 1xBet, with the UK Gambling Commission warning them that promoting the betting company could be a breach of UK law and that they risked severe fines and up to 51 weeks’ imprisonment.

The Gambling Commission also slapped FSB Technology, with which 1xBet had a white label agreement, with a £600,000 ($697,000 USD) fine for “advertising, money laundering and social responsibility failings”.

According to The Sports Integrity Initiative, 1xBet was founded by Russian businessmen Roman Semiokhin, Dmitry Kazorin, and Sergey Karshkov. The trio is on the wanted list of the Investigative Committee of Russia (SKR), which found 1xBet guilty of generating 63 billion rubles, or over $1 billion USD, in illegal gambling income. They currently reside in Cyprus, where 1xBet’s headquarters are located.

ESL’s response

The news of 1xBet’s bankruptcy only adds fuel to discussions about ESL, one of the biggest esports companies in the world. Earlier this year, ESL and tournament platform FACEIT were acquired by Savvy Gaming Group, which is backed by the Saudi Arabian government’s Public Investment Fund, in a deal worth $1.5 billion, according to Sports Business Journal.

The deal has been the subject of fierce criticism in many quarters for Saudi Arabia’s human rights record.

Additionally, ESL has also come under fire for its partnership with the US Air Force, which came into effect in February 2020.

Dexerto put a number of questions to ESL. We asked if ESL is aware that 1xBet has been declared bankrupt in Curaçao, and, if so, why the partnership is still in place. We also asked about the conclusions of the alleged investigation launched in 2021 into the claims against the betting company, and why there has been no announcement of the renewal of the partnership.

In a brief statement, ESL simply said: “Yes, 1xBet is still our partner, and we continue working together.”

Contacted by Dexerto, the Esports Integrity Commission (ESIC), of which ESL is an active member, declined to comment.