Scout Explains How Indian Esports Tournament Organizers Earn

Popular Indian content creator and Battlegrounds Mobile India (BGMI) player Tanmay “Scout” Singh recently expressed his belief that Krafton asked third-party tournament organizers to stop hosting unofficial tournaments due to the untrustworthy practices of some esports tournament organizers. He explained how Indian esports tournament organizers leverage popular Indian teams and brands to make an income. He explained that the organizers host a tournament and borrow money from others to pay the prize pool of the tournament. After conducting the tournament, they pay prominent teams such as Team SouL and TeamXSpark to participate, which in turn attracts brand deals and endorsements, yielding higher returns compared to the actual prize pool.

Scout explains how tournament organizers leverage popular teams and brands to make income

In a recent livestream, Scout discussed the recent warning given by Krafton’s Esports team to tournament organizers to halt unofficial BGMI events amidst the game’s unavailability. Following this, he expressed that he believes Krafton took this step mainly because of the untrustworthy practices of some esports tournament organizers. He stated that only a few could be trusted. Explaining his statement, Scout described a hypothetical scenario where an organizer named XYZ promises to host a tournament. “Imagine you are XYZ, and you decide to host a tournament of (INR) 10 Lakh. You don’t have the funds in the account. You invited everyone (popular teams) and gave your word to them. But when the time comes to distribute the prize pool, XYZ goes to every owner saying, “I need this much money. I will return it to you later.” Then XYZ borrows the money and uses it to distribute the prize pool,” he said.

“Now, you would believe that this person is incurring a loss, but no. Instead, this person pays money to the team for playing in that tournament. They give money to the team and ask them to play in the tournament,” he said. 

Scout further explained that practicing this allows them to earn a significant amount of money, beyond what they actually pay out in prize money, from brands as popular teams participate in the event. “Now what happens is… Imagine that the tournament has a prize pool of 10 Lakh. They borrow 10 Lakh and distribute the prize pool. But they take money from different brands by saying that Team SouL, Tx, and such teams are playing in the tournament, which is much more than this. They earn a lot,” he said.

With Krafton stepping in to stop unofficial third-party tournaments, it will be exciting to see what the future holds for esports tournament organizers. Furthermore, it still remains unknown how long the tournament organizers will have to wait to resume tournaments.