By Tim Royan, Tanner Puckett and Reinert Toft
This story was originally published here.
In the back corner of a strip mall in Tempe you can find SAK Gaming’s logo hand-painted on an otherwise non-descript window, even if the sign over the door still says Baseline Bargains.
Inside the austere commercial space, dozens of amateur esports players, men mostly in their 20s, compete on flickering old cathode TVs flanked by aging couches and stacks of outdated electronics. The game of choice: Super Smash Bros. Melee, a fighting game released nearly 17 years ago. On a stage in the middle of the room is the featured match, which is both projected on the wall and streamed online.
“Initially, we were in an old dance studio that probably hadn’t been rented in at least 10 years,” said SAK co-owner Stephen Shackelford. “It was really, really beat up and dusty. And there was old 1970s style wood paneling on the walls.”
“We had community members that came and helped us and we painted it and cleaned it up, made it look nice,” Shackelford added.
SAK Gaming embodies the thriving grassroots esports culture that has emerged in Arizona, where fighting games in particular are flourishing, and offers a space for emerging competitors to hone their skills in small scale tournaments. While SAK has more than 60 regular competitors, it’s just one of a half dozen gaming sites in the Valley.
Despite the strength of Arizona’s fighting game community, native players who want to compete must travel elsewhere for major tournaments because Arizona gaming statutes — which consider esports games of chance — deter larger organizers from operating within the state.
This could spell money left on the table for Phoenix, one of only 12 metropolitan areas in the U.S. to have four major sports teams, which notably lags behind other sporting towns in major esports competitions, according to Scott Smith, who works in labor relations for esports.
Esports are massive revenue generators: the global esports market size is expected to exceed $900 million in 2018, up 38 percent from 2017, according to research conducted by Newzoo. While venues in other major U.S. sporting markets like Chicago, New York City and Los Angeles have all tapped into this revenue stream by hosting frequent tournaments, due to the gambling laws, the only place to compete in a big-dollar tournament is the the Talking Stick Resort casino.
While some in Phoenix’s esports community would welcome an influx of large-scale competitions to the city, many are content with building upon the grassroots competitive scene that already exists in the Valley.
Arizona’s Infrastructure and the Law
Scott Smith has been involved with esports since the early days, first playing the 1999 game Counter Strike professionally, later owning the team GotFrag and eventually working in labor relations for the sport.
Smith is a proponent of bringing larger-scale tournaments to the Valley, which he said has the infrastructure and community to support support such events.
Smith, who goes by the handle SirScoots, recalled a conversation he had some years ago with an event coordinator for Major League Gaming, a major esports tournament organizer about their notable absence in the state.
“I asked him… ‘why don’t you bring an MLG event here?’” Smith asked. “He said there was a statute on the books in Arizona that has been interpreted to include competitive video gaming…as more of a game of chance than a game of skill.”
Katherine E. Hollist, a lawyer who has been published in the Arizona Law Review on labor solutions for esports, explained by email that the reason esports is sometimes seen as gambling is due to RNG, or random number generation, within video games which cause certain in-game outcomes to be randomly assigned.
“When Aaron Rodgers slings a pass 70 yards, he is not rolling for a 70 percent chance of hitting a receiver,” said Hollist. “While other factors like wind speed or direction might affect the trajectory of his throw, ultimately he has the ability to account for those factors.”
“As a practical matter, this does leave esports in something of a gray area in terms of how the activity should be treated,” Hollist added.
Yet not all games rely on RNG, according to Hollist.
“In some games, the chance component is next to zero,” said Hollist. “Players fight over objectives that spawn consistently in the same location, at the same point in the game, and use character abilities that depend on skill in aiming and executing, while providing no variance based on RNG.”
According to Hollist, there is no simple answer to whether esports are gambling due to this diversity in game genres. Hollist said, however, existing laws are ill-equipped to solve this problem.
“This is a new kind of industry that requires an entirely different set of solutions,” said Hollist.
In Smith’s estimation, the potential for legal issues is enough to scare off major event organizers from even trying. Smith said the law’s enforcement is inconsistent in Arizona and an esports organizer would likely be granted a license for major events were they to apply.
“Which is why I wish more people would do it,” said Smith. “We have the infrastructure, we’ve got everything going for us… to do good esports events.”
Smith touted Sky Harbor International Airport and cheap summer rates for hotels and venues as potential draws for major esports events and suggested the city do more to court esports organizers.
“Everyone ignores Arizona because they think they can’t come here. And they’re not even trying,” said Smith. “So that might take some PR on our state to say, ‘no, it’s not gambling to us. We’re cool with this. You know, in fact, let us help you.’”
Without major events in Arizona, Smith said the state could drive away its local esports talent. Consider Arizona State University alumnus Michael Udall, who moved to Utah to pursue a career in esports after leading an ASU team to a championship in a popular online game, Heroes of the Storm.
“If [a player’s] got nowhere to play and he can play [elsewhere], that’s where he’s going to go,” said Smith. “You’ve got to chase the contracts, right?”
Grassroots Gaming
For his part, Shackelford isn’t concerned with Arizona gaming laws. In addition to expressing a lack of knowledge on whether the major events would really increase revenue for the state, Shackelford stressed that Arizona already has a healthy grassroots esports community.
“We have huge monthly tournaments, we’ve got really consistent weekly tournaments that happen all the time and we have colleges that are getting into esports,” said Shackelford. “To say that there are not esports in Arizona is definitely false.”
Dozens of competitors show up weekly to the small scale tournaments hosted at places like SAK Gaming and the Gaming Zone in Tempe where cash prizes can reach up to $2,500.
The local fighting game scene, however, differs from other genres of esports, such as MOBAs (multiplayer online battle arenas) like League of Legends or Defense of the Ancients (Dota), which are typically much more lucrative competitions.
For instance, the largest payout in esports history was $37 million for Dota, while the largest ever payout for a fighting game, Street Fighter V, was around $250,000. Many of these larger competitions held in other cities fill arena-sized venues, seating thousands, while Arizona’s grassroots gaming scene draws crowds not much larger than 100 people.
Shackelford attributes confusion about these genres to the perception that Arizona is lagging behind in esports.
“What most people think of when they think of esports is…this really big competition played by a small number of teams in a specific location with cameras everywhere,” said Shackelford. “But that’s not how most esports are played.”
According to Shackelford, the more lucrative games in esports, which are often played at home on an expensive gaming PC, do not foster the same sense of community.
Cariño Dominguez, a gamer, streamer and a graduate student at Arizona State University, attributes the cost and portability of consoles to the popularity of fighting games in Arizona.
“You don’t need so much as far as logistics to run a competition in the fighting game scene. It’s literally show up with your Gamecube and and go at it,” said Dominguez. “It’s just more accessible for grassroots esports players here to get involved in the fighting game community.”
Shackelford said this is a common misperception about fighting game tournaments, which he said are logistically more complicated than they appear.
“There were a lot of companies that would come in and say ‘this will be so easy, people bring their own systems, we’ll just have them bring systems, we’ll rent a space and we’ll be able to turn around and make several thousand dollars really easily,’” said Shackelford. “But it’s not like that; it does take a lot more to to run a consistent and successful event.”
Shackelford attributed fighting games’ appeal simply to their need to be played in-person.
“[Fighting] games are ones that people can play online, but you get a better experience if you play in person,” said Shackelford. “You need to go and play people physically. Because we try to play online, there’s too much latency, or you’ll have disconnects or you don’t learn as much.”
Jordan Mizell, a 29-year-old bank teller known by the handle Rambro, travels the world to compete in fighting game tournaments, but he agrees with Shackelford that the grassroots esports scene is paramount.
“The scene is great,” said Mizell. “You make a lot of good friends competing and you build a comradery off of that.”
According to Mizell, who has placed in the top 10 in international Smash Bros. competitions, Arizona’s fighting game community is strong because of its ability to draw a crowd and make the smaller-scale tournaments entertaining, but, most of all, for the in-person connections made.
“For the most part, gamers are kind of timid or shy, but in Arizona’s scene they’re good at just making it a fun event,” said Mizell.
Mizell cites the good-spirited “trash-talk” between competitors as an example of what makes these events so fun.
While Mizell said he is drawn to competition at The Gaming Zone, a retro game store that holds esports events in Tempe for the atmosphere, there are still prizes to be won.
“Usually it’s like a five dollar buy-in, then that goes towards the pot” said Mizell. “Then it’s usually a 60, 20, 10 [percent] split for first, second and third place.”
Mizell said he thinks Arizona is neglected as an esports town due to lack of publicity.
“Maybe not a lot of people know we have a good scene here,” said Mizell.
Skill vs. Chance
While the question of the law hinges on the interpretation of esports as games of chance, those involved in esports are emphatic that success in the industry is purely based on skill.
“If esports is gambling, then that means that there is an element of luck involved,” said Shackelford, who once attempted a professional career in Blizzard Entertainment’s Starcraft II. “Then a person with absolutely no skill should conceivably, in a hundred games, be able to beat a player that is very skilled and I don’t think that is true.”
Additionally, Shackelford stresses professional gamers also train just like any other sports professionals.
“The players who are the best, the very best, the ones who are really up there at that top level, they get up every morning, they have rigorous routines,” said Shackelford. “They go to the gym, they eat a healthy breakfast, they sit down, they discuss and they strategize and talk about the game at a fundamental level. And then they play the game for four or five, six hours a day.”
“There’s a lot of hard work behind it,” said Mizell, who trains extensively at The Gaming Zone. “You have to deal with losing and how to improve yourself.”
Mizell said an esports player needs a vast repertoire of skills in order to compete, including quick reflexes and the ability to pick up an opponent’s tendencies and exploit them.
“These games move pretty quick,” said Mizell. “In a tenth of second, you need to be able to react to something that’s happening.”
Mizell said training with others in the community is invaluable.
“You would practice versus other people around your skill level or higher than your skill level and just try to learn from them,” said Mizell. “If your gameplay was recorded in any way you can review that much like… professional sports players… and figure out ways to fix your holes.
The Future of Arizona Esports
What unites people at various levels in the esports community is a lifelong passion for gaming.
Smith, who is one of the longest-standing names in esports, said that he began playing video games at a young age, and attributed the release of Counter Strike in 1999 to his presence in the esports scene.
Smith sees the future of esports as an incorporation of the business lessons learned from other sports.
“The biggest thing we’re having our issue right now is our monetization per fan is nothing like [traditional] sports,” said Smith.
Smith argued that, while a football fan is almost guaranteed to spend some money each year on merchandise, esports has a comparable fanbase but has not yet capitalized on the money-making opportunities in its viewership.
For Phoenix, while Smith would like to see big-name tournaments held in the Valley, neither he nor anyone else has really pushed for a relaxing of the laws in the state.
Though Mizell has only competed for four years, his love for the games runs much deeper.
“[Video games] are important to me,” said Mizell. “They’ve been a part of my life my whole life… It occupies my time and keeps me out of trouble.”
For Mizell, the future of esports lies in the next generation of gamers.
“Here’s these kids, maybe they’re junior-high aged… they had an a esports club at their school and part of their field trip was to just go to SoCal regionals 2018 and hang out and play games,” said Mizell. “I was playing with them too, and showing them how to play and everything like that. So it was really cool. That’s, that’s the future right there.”
Shackelford, who has also played games for as long as he could remember, agreed with Mizell and encouraged parents to foster their children’s passion for gaming.
“If your kid really loves video games, and you think he could have some legitimate talent, bring to an event,” said Shackelford. “It teaches kids sportsmanship, it gives them confidence, it teaches them leadership skills and it teaches them the value of hard work.”
Locally, Shackelford plans to continue nurturing the grassroots community he’s seen flourish at SAK Gaming.
“We have… kids who are who are just really, really quiet and don’t have really a lot of friends all and they come here and they meet people and they come out of their shells” said Shackelford. “And we’ve had people who just came in to play the game… and they’ve developed really very, very deep friendships that I think are going to last for years by playing the games here.”
“For me to be able to facilitate that, I think is the greatest, most rewarding thing about this job,” said Shackelford.
While Shackelford is content with helping the Valley’s esports scene grow from the ground up by further expanding SAK Gaming and branching out to other events in the city, he doesn’t rule out the benefits of larger organizations operating here.
“When you bring in 100,000 people to go to the Phoenix Convention Center, it’s going to create a huge swell of economics in that area,” said Shackelford. “If there are things like this that the city can do to incentivize those kind of events, I would love to talk to them about it.”
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