The esports industry is becoming increasingly popular. Young people in particular spend a lot of time in front of their PCs playing their favorite games. It is therefore hardly surprising that esports is gaining more and more viewers. This is leading to the establishment of new companies. But existing companies also want to capture a share of the market for themselves. Legal factors must also be taken into account. The Legal Entity Identifier (LEI) can provide support here.
Why the LEI is important
The Legal Entity Identifier (LEI) is a unique code that only exists once in the world. This code is used to uniquely identify legal entities that participate in financial transactions. Accordingly, the LEI ensures greater financial transparency and sustainability. The use of the LEI improves market surveillance and combats fraud.
Increasing trust among sponsors and investors
In order for esports to continue to grow, further investment from investors is required. Sponsors also play a key role, as they are one of the most important sources of income for esports teams. In traditional sports, Nike and Adidas are the big names, outfitting athletes with jerseys and shoes, among other things, to promote themselves. In the esports industry, it is the manufacturers of mice and keyboards, among others, who have an interest in financially supporting esports players for advertising. However, both sponsors and investors only want to support reputable teams. Companies in this sector can use the LEI.net – official LEI registration agent to prove their identity and seriousness.
Simplifying international transactions
A special feature of esports is that it has no local restrictions. This is due to the fact that teams, sponsors and the organizers of corresponding events are active all over the world. There are many international tournaments as well as cross-border sponsorship agreements and global partnerships. The LEI should be used to avoid problems in the administration of financial transactions. It supports companies in handling these processes, as it ensures standardized identification of companies, which simplifies communication between international partners. This has a positive effect on the efficiency of financial transactions and helps to overcome bureaucratic hurdles.
Compliance requirements
Esports companies also have to deal with the requirements of the legislator. In most countries, there are precise regulations regarding the handling of:
- sponsorship
- financial transactions
- prize money
The use of the LEI helps to prove identity in these cases. This is a significant advantage as it allows teams and organizations to ensure that all legal requirements are met. Finally, the LEI ensures transparency in the design of business practices.
Protecting against fraud and increasing transparency
The esports industry is still a relatively new industry, so it is possible that prize money may not be paid out. Transactions between international partners do not always run smoothly either. The LEI provides a remedy here by implementing an additional layer of security. The reason for this is that it ensures forgery-proof identification. Accordingly, cases of fraud are reduced through the use of the LEI. It also increases transparency, as the LEI enables companies to verify the identity and financial data of an organization.
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