The District’s sports and tourism authority is spending millions of dollars to promote esports, the fast-growing industry that surrounds competitive video-game playing.

But this publicly-funded campaign to boost competitive gaming in D.C. might pose conflicts of interest for Max Brown, who leads Events DC’s board of directors.

City records show that Brown is a lobbyist for the video game industry, earning more than $100,000 in lobbying fees while chairing Events DC’s board since 2015. Brown is also tied to esports through his financial investments. He owns stock—worth up to $50,000—in an esports startup, according to financial disclosure documents.

For the city and its taxpayers, Brown’s financial connections to the video game industry matter because he’s helped guide D.C. to invest public funds in an up-and-coming industry that carries certain risks.

‘The Only People Benefiting Are The City’

Brown and officials at Events DC say there’s no conflict of interest with Brown’s lobbying work. They argue esports is entirely separate from the broader industry of video games. And Brown insists his investment has no connection to any of Events DC’s esports sponsorships or gaming tournaments.

“There’s no conflict because I don’t benefit,” says Brown. “The only people benefiting are the city.”

The Events DC board chair says he’s followed the rules and disclosed everything that’s required: his lobbying clients, the contracts, the stock investments.

But several ethics experts interviewed by WAMU say Brown’s financial ties could pose problems.

“He’s potentially using his official capacity as a government official to promote an industry in which he has a personal interest,” says Laura M. Richards, a retired lawyer who served as an original member of D.C.’s Board of Ethics and Government Accountability from 2011 to 2015.

Members of the Events DC board of directors, which oversee spending for the city agency, are selected in part because of their connection to industries like tourism and hospitality.

Brown sees his ties to the video game world—his family owned a small video game company when he was growing up—as a valuable resource for D.C.

“The District should be a leader in this space. I think it’s probably one of the reasons why Mayor [Bowser] appointed me,” says Brown, who was a top fundraiser for Bowser in her 2014 mayoral campaign and chaired her inauguration committee.

Events DC Pushes For Esports In D.C.

The popularity of esports continues to grow, with teams competing from all over the world to win prizes in video game tournaments.

The global revenue for esports is estimated to be at least $1 billion in 2019.

To tap into this phenomenon, D.C. launched an ambitious campaign to lure esports tournaments to the city.

Brown and Events DC CEO Greg O’Dell are leading the effort. They’ve appeared together to promote D.C.’s esports effort at events like the South By Southwest festival in Austin, Texas.

The board of directors, led by Brown, oversees and approves spending by Events DC, which receives more than $100 million annually in public funds.

Events DC has sponsored esports teams and tournaments over the past few years and launched a marketing campaign. Most importantly, Events DC helped construct the $69 million sports arena in Southeast D.C. that was custom-built to host video game tournaments as well as concerts and sporting events.

“I applaud our board for being forward-thinking about how we attract the next generation of tourists and sports consumers,” says Brown.

Brown Lobbies For Video Game Industry

Brown’s position as board chair of Events DC is part-time and unpaid.

His other job is lobbying District lawmakers. He reported earning roughly $818,000 in lobbying fees last year, representing nearly a dozen private firms or organizations.

One of those lobbying clients is the Entertainment Software Association, the trade association for the video game industry. The group has paid Brown roughly $36,000 a year for his services, dating back to 2008.

Brown and officials at Events DC say there’s no conflict of interest.

They see a crucial distinction between the broader industry of video games and esports, which they consider a team sport that’s comparable to the NFL or NBA.

“I view video gaming as different than esports,” says O’Dell, CEO of Events DC. “I mean there is some overlap but esports [is about] bringing events and programming to the city. I have no concerns.”

But esports is a concern for the Entertainment Software Association at the federal level. The group lists “reviewing legislation for possible impact on esports” as one of its lobbying activities, according to 2018 U.S. Senate lobbying records.

The software association declined to comment regarding Brown’s work.

Brown is adamant that his lobbying work at the D.C. Council has nothing to do with esport —just legislative issues that affect the video game industry as a whole.

“If there were any conflict, I’d disclose it—that’s just been my practice,” says Brown.

For example, Brown says, he recused himself in September when the software association threatened to sue Events DC over the use of the acronym ESA for its new sports arena in southeast D.C. When Brown learned of the issue, he sent a letter to the city’s ethics board and removed himself from the naming rights issue.

But Brown hasn’t recused himself from Events DC’s overall campaign for esports. In November, the Events DC board voted 9-1 to approve a $750,000 sponsorship for a video game team owned by D.C. businessman Mark Ein.

Brown voted yes, according to video of the meeting. 

Brown Invests In Esports Startup

While Brown has helped push D.C. into promoting competitive gaming events, he’s also invested his own money in esports.

Financial disclosure records show he invested between $15,000 and $50,000 in a privately-held company called Sannpa Limited in 2017. (D.C. financial disclosure forms list maximum and minimum values for financial investments.)

Sannpa Limited is the parent company of “Fnatic,” one of the leading esports franchises in the world.

The company is based in London and has been raising money from investors, according to press releases.

Under the city’s conflict-of-interest laws, even uncompensated board members like Brown are prohibited from owning stock or interest in a company that is “in any way related, directly or indirectly” to their official duties.

At the same time, D.C. officials can seek waivers from the city’s ethics board if they own stock in a company that’s potentially involved in city business. In 2016, for example, Brown and several other Events DC board members who owned shares in Apple were granted waivers to vote on an issue involving the tech company. The ethics board said their stock holdings were not “substantial” enough to likely affect their votes.

In the case of the Sannpa Limited, Brown says there’s “literally nothing” that Events DC is doing that could have an impact on the UK-based company.

“I’ve been working in this industry since I was 16. I made a modest investment in a company,” says Brown. “We have no work with them at Events DC. We have no sponsorships. We have nothing. So, I disclosed it.”

Craig Holman, legislative representative for the government watchdog Public Citizen, says the city should scrutinize Brown’s investment.

“[D.C.’s] basically being nudged by Max Brown into investing a great deal of money into an industry which Max Brown is personally benefiting,” says Holman.

Brown disagrees.

“There’s no financial benefit for me,” he says. “My reputation for integrity is strong and I take it seriously, and I take my job seriously.”

Meanwhile, Events DC’s campaign to promote esports continues. Last month, Events DC announced it was soliciting proposals for “esports gaming and consulting services.”

The job description includes booking tournaments for the new arena in southeast D.C., as well as advising Events DC on esports investments and sponsorship opportunities.

This story was originally published on WAMU.