Ian Smith, the Commissioner of ESIC, was the guest of the latest episode of HLTV Confirmed on Tuesday.

In the two-hour appearance, the South African discussed the watchdog group’s approach to their recent investigation and second banning of Nicolai “⁠HUNDEN⁠” Petersen revolving around his sharing of sensitive documents relating to Heroic, explaining the Commission’s side of the investigation and providing more details on the controversial case.

He also commented on other inquiries ESIC is currently undertaking or is about to finalize its findings on, including the investigation into extensive match-fixing and betting fraud in North American and Australian ESEA MDL, the suspicious betting activity of former Project X CEO Oleksandr Shyshko, and the second wave of smaller cases of the use of the infamous coaching bug.

We have compiled all the topics Mr. Smith discussed in the episode and his comments on each subject below, which you can also view in video form on YouTube or in audio form on various podcast apps.

Why ESIC got involved in the document-sharing case in the first place

“We’re involved because of the timing of this incident. If this had happened more or less any other time, it would have been nothing to do with us, it would be purely a dispute between Heroic and HUNDEN. This happened days before IEM Cologne. The integrity of our member events is absolutely key to ESIC. It’s the most important thing we do, it’s to make sure that for ESL, BLAST, WePlay, all of our members, that their events occur with the highest level of competitive integrity.”

“Getting ESL involved was clearly my priority, to make sure that IEM Cologne wasn’t affected. It appeared that it initially was, my initial thought was ‘hold on, these teams are likely to meet.’ That was my first concern. The first thing I did was to engage ESL, Heroic had also initially engaged them. All happening within the same day, the same timeline, it was a pretty intense period.”

“At the opposing team, we were given direct access to the file history of the person with whom the files were shared, so everything that he had accessed over the period from the share through to the time that we were looking. We were given free access to that to then look through what he had accessed, which, thank god, he hadn’t accessed anything dodgy. So it was very cooperative on that side of things. As best we could, it was clear that that file had not been opened, that share had not been accessed.”

Determining what the files involved and whether and how damaging it was to Heroic

“What I initially looked at was, on a shared screen into the Heroic office, to put up the Google Drive and look at what is in it. The fact that [HUNDEN] shared it was indisputable, you know what it’s like when you look at the permissions that had been given. That bit was easy. So I was able to look alongside Heroic’s senior management on a shared screen what those files were and what was in them. It was a lot of stuff, and a bit of stuff had to be explained to me, but given that there was a high volume there, I didn’t in the end have to look at every file, but I looked at enough to be able to know that in the hands of an opposing team, this would be very, very useful information.”

“There were a large number of files. Not quite 200 but a lot of files. I didn’t open and look at all of them, I went through a sample of them. Some contained say a couple of short videos and then a document of sorts, like a Word document. Some of them were long, I had them scroll on the screen through some of them. But to say that in total we’re talking whether it was 200 pages or 2000, I wouldn’t be able to say, I didn’t open half the files, I saw enough to make my decision.”

“I was very lucky in these three- and sometimes four-way conversations that I had the senior CS:GO guys from ESL online looking at some of the same stuff as me and involved throughout. So I had advice from people who actually knew what they were looking at.”

“This was sufficient to create an imbalance in a match between two [teams]. So if the opposing team had accessed this information, they would have had insights that gave them a significant competitive advantage. To my mind, anything that gives them even a slight advantage, something like finding out 20 minutes in advance of a game that a player’s girlfriend just dumped him or that he slammed his finger in a door last night, these are all bits of inside information that are helpful. But there was a lot more to it than this. This was about how Heroic play in certain circumstances on certain maps. This wasn’t a ‘let’s push hard on B site on Dust2 when we’re playing against G2.’ It was a hell of a lot more than that.

Verifying what Heroic claim was in the documents

“That’s what we looked at on the 6th and 7th (July) when we were in our various Google Meets, sharing screens and looking into the Drive. I needed to understand — at a basic level, I’m happy to concede — what I was looking at. You can imagine there’s a lot of video material, and to me that’s just watching Counter-Strike, I’m not in the depths of that, but it was much more the documents, what are they saying, who’s written this, and what’s in there? I had to ask a lot of questions, and when I read the Heroic release, to me that was perfectly accurate because that’s what I saw when we were reviewing these documents in the early days.”

“Whilst I can’t attest to every single point you’ve made in Heroic’s thing there, the generality of what’s been said there is entirely accurate. That is what I was looking at when I was in those meetings.”

Why ESIC didn’t specify the contents of the documents

“This was never my information to put in the public domain, and I’m super conscious that there’s this whole separate civil litigation thing going on that I’ve never wanted to be involved in, it’s got nothing to do with ESIC, that’s a Danish law issue, but it’s nevertheless sensitive. So ESIC coming out saying ‘I saw this, this, this, and this detail,’ I don’t know to what extent it jeopardizes that [case], but more importantly I didn’t feel it was necessary to do that.

“I guess what I felt was important to convey was not what the community [thought] — I mean I’m sure they found it important as well but there was additional information that they wanted, and I guess if I was more of a Counter-Strike expert I would have anticipated that and put it slightly differently. That’s all easy in retrospect and 500 Tweets later.”

“In terms of getting into the weeds of exactly what is in a file and therefore having some expert say ‘this would be useful to an opponent’ or ‘this would be only a little bit useful’ or ‘this would be very useful’ is actually — from an ESIC point of view — not the point at all. It’s any information that gives the person accessing it a competitive advantage over the team about whom the information was compiled, or for whom, that is enough. From a regulatory point of view, what you’ve done is unbalance the competitive integrity of that competition. From an ESIC point of view, that is enough. I get why it’s not necessarily enough from a Counter-Strike fan or a Counter-Strike professional’s point of view, but putting it bluntly, that’s not my problem. If the community wants more information, the way I regard that is that’s curiosity, I get that you want to know more, but it doesn’t mean you’re entitled to know more.

“And I’m not the owner of that information. If someone wants to get it out there so that one of you guys or an expert says ‘hey, this really was very, very useful information,’ then that’s up to Heroic or even HUNDEN to say that ‘no, it wasn’t, this is just garbage, it was no use to the opposing team at all.’ My assessment is that it was, it was useful enough to constitute a threat to the integrity of not just that match but all of IEM Cologne.”

ESIC’s views on what can and cannot be shared between teams

“My message to the professional community here, whether coaches or players is: Be careful about what constitutes inside information and how that’s used. If a player knowingly moves from team A to team B, team A has to know that he’s got all this stuff in his head and he could use it against you. But that isn’t the situation here, HUNDEN had not yet transferred to the other team, he was still the employee and the coach of Heroic, and he took information from Heroic and gave it to the opposing team. That is not the same as if HUNDEN had moved four days before the tournament from Heroic to the other team, that’s the team’s problem, that’s not my problem. Yes, it affects competitive integrity, but everybody knows it does. This was kind of secret and that’s what bugs me about this. I think it’s up to teams and orgs to sort out their moves between themselves and the impact of those moves. This guy hadn’t moved yet.”

“In retrospect, it’s no problem. When it’s speculating in advance, if I’m the coach of a team and I go on your program three days before they’re playing and go ‘we think our opponent is going to do this, this, and this, and we’re going to counter it by doing this.’ You’d just be an idiot. [Would I consider that a threat to integrity?] Not in a public domain, no. I don’t because you’re doing it publicly, you’re transmitting the information. If it’s behind the scenes, yeah, sitting at a table in a player lounge saying ‘I think you guys are going to do this and I’m going to do this,’ that would be idiotic. Unfortunately, what HUNDEN did I see as the equivalent of that.”

“Mostly, I deal with inside information in the context of betting. But if you just take that definition — in betting terms, do I have information by virtue of being inside the tent that is useful to somebody outside the tent for betting purposes? That’s inside information. In this context, I genuinely think that if I know something by virtue of being inside Heroic that could be useful to somebody not inside Heroic, then I shouldn’t tell them. I honestly think it’s that simple. And, of course, timing is important here. I know that information goes out of date and I think that discussing general strategies is interesting.

“If I’m in team A and I’m chatting to the coach of team B about team C, we’re both learning something here, we’re having a conversation, we’re exchanging ideas and data. We’re going ‘hey, have you noticed how team C always does this? I think we could counter that by doing this,’ and then the other coach says ‘yeah, but I think we could try this.’ This is just a tactical, generalized discussion. But if I’m coach A and I say to coach B: ‘When team C does this, I’m going to do this.’ This is an insight into how my team plays, so when team B plays against me, I’ve given them information about how we play. And that’s information I have got by virtue of being inside the tent. And it could be an advantage, so why the hell am I telling him that?

“Just don’t give someone an advantage over you. Giving them an advantage over your mutual enemy, hey, happy days, I don’t care about that. I do care about giving away information about your team, your tactics, in a way that could give your opponent an advantage.”

What contributed to the length of HUNDEN’s ban and comparing it against coaching bug bans

“Not the easiest thing in the world to determine, because ultimately we don’t have a precedent for this, so what I was looking at was the seriousness of the threat to competitive integrity of a member event, and I regard this as a serious threat. We will never compromise on something like this, so the length of any ban serves in my mind two purposes. The first is, it’s got to be an appropriate punishment to the offense, and the second is that it’s got to act as a deterrent to the future conduct of a similar nature.

“Whilst I had a wide range of potential sanctions at my disposal, I felt that two years was appropriate, because ultimately it’s my decision. I did look at other sports examples, they’re not massively helpful. Cases like the McLaren Formula 1 case from a few years ago, where the Ferrari information was said, I looked at the ‘Bloodgate’ case in rugby, I looked at various scenarios, but I have to say there wasn’t much particularly helpful. So my gut instinct was that the proportionate response was a serious ban because I regarded it as a serious potential breach of competitive integrity.

“The fact that it didn’t actually materialize was not in HUNDEN’s control. The opposing team could have opened and used that information, shared it, whatever they liked. Once he pressed send on that email, he lost control of that information. And that was at best reckless beyond my imagination, I still can’t get my head around it.”

“The fact that it could have, the fact that it didn’t is not relevant to the sanction. It’s the seriousness of the conduct. It’s the seriousness at the moment of pressing send, not what the consequences are afterwards. HUNDEN had no control over those consequences. The fact that they didn’t occur was a result of our and ESL and Heroic’s proactive measures to stop it happening.

“[The fact that there was no precedent] does not increase the length, it just makes it difficult to determine the length.”

“From my point of view, with the coaching bug we were very, very clear at that stage that we weren’t saying that the guys actually cheated using it, we’re saying that they used the bug. HUNDEN was one of 37 guys fitting into a sanctions matrix that had to make sense for that case. They’re not comparable.”

Why HUNDEN wasn’t questioned before ESIC came to a verdict and responding to his claims saying ESIC threatened him with a five-year ban

“For me, there were two facts: That it had been shared and that we took the view that it was sufficiently sensitive, and the second thing is that he Tweeted that ‘I shared these files’ and made a sort of an excuse, and I don’t mean that in a derogatory way, but I took that Tweet as an admission.”

“Unfortunately for HUNDEN, he went public with this. As soon I saw that ‘I shared this material,’ for me the matter is over. The guilt is established. But on the off chance that there is some kind of mistake, excuse, we have an independent appeals procedure which he was offered in that very first contact. To say, ‘in effect, here’s a plea bargain. You accept my sanction and guilt, or you appeal and then I prosecute the case and you take your chances with the appeal panel. But you’re taking your chances with them because they can up the sanction, it’s a much more difficult procedure.’ He’s still got time to appeal. He may appeal.”

“We make this explicit in our notice of charge letters. Before you follow a formal appeal procedure, we are open to hearing and discussing these things. If he’s got something to say, I’m open to hear it, and I’ve made that clear in the letter to his lawyer, in the notice of charge.”

“Since we decided on the charge and notified him of the charge, at least a week or 10 days before the public statement, I can’t remember the precise timing, he has constantly said ‘I haven’t been heard,’ and I’ve constantly said, ‘I’m listening. What have you got to say?’ Personally, I find it hard to even imagine what the defense could be, but he’s had multiple opportunities to tell me what that might be. But nothing of substance has come forward. I’m not satisfied that he hasn’t been given an opportunity to speak. He has. We’ve been in correspondence since August 19, and it’s now the 31st and I still haven’t heard a single point of substance that in any way justifies this action.”

How the appeals process works

“We have a chairman of an independent panel of — I think there are six or eight people on the panel, I try not to interfere with this panel at all because I don’t want anybody saying I’ve influenced them or that I have influence over them. They have an independent chairman, a guy called Kevin Carpenter, who is an integrity expert lawyer, lecturer, and a guy in private practice being in sports discipline integrity matters for many, many years, English-based. And then the panel is people with either an esports or sports disciplinary background, so for example Anna Baumann, who is with ReKTGlobal and ran the Rogue League of Legends team for a number of years, and who is an expert lawyer. They’re lawyers from football and lawyers from esports independent of me.

“And the way it works if someone wants to appeal, they write to Kevin saying ‘the grounds of my appeal are X, Y, and Z,’ and he then liaises with them and I become — or ESIC, effectively, becomes the prosecutor. This then becomes my case to persuade the panel that the guy is guilty or that the sanction is justified. His job is to say ‘I’m not guilty,’ or ‘I am guilty, but the sanction is too high, it’s unreasonable,’ or whatever. And then the panel have their chat and they come back with a decision, and as you’ve mentioned, in a couple of the coach bugs the appeals were successful or partially successful.

“Just to round that off, there has been a complaint that there is a fee to make this appeal, and it’s £250. First of all, it’s nothing compared to the cost of running these things. The cost of these appeals is high. But it’s not our money, the money doesn’t go to ESIC, it goes to the disciplinary panel, these guys don’t come cheap and neither should they. They’re not free. So my reasoning in agreeing that they can charge this deposit is two things: Firstly, I don’t want frivolous appeals, and if you make it free, guys will just appeal. Any old garbage will just come forward because there’s no cost. So there has to be a small hurdle. The second thing is that there are costs and that the appeal panel can award costs against a losing party, but what are the chances of us recovering those costs, so at least we got £250 of what could be £2,000-£15,000. And finally, where people genuinely can’t afford it, we have waived that fee by agreement with the disciplinary panel, and on one occasion we’ve actually agreed as ESIC to pay that deposit so that the person could appeal, because his personal circumstances meant that he couldn’t come up with £250. We’re not trying to stop people from appealing, we’re trying to stop bogus and shitty appeals.”

Will the team who was meant to receive the documents be investigated?

“Only if as a result of the civil case running between Heroic and HUNDEN, which involves the other team to some extent, reveals information that says to me as Commissioner, ‘you need to investigate this.’ I don’t know how long this is going to take, but there was a very public seizure of all sorts of documentation and data that is now the subject of the civil litigation. I’m not involved in that. But I would certainly say that if information arises that shows that there was an integrity issue related to IEM Cologne or another ESIC member event, then obviously we’ll investigate it, but at the moment there is nothing to investigate.

“On what was available, what could be proven, and what people have said to me in good faith, there is no problem. I’m not saying ‘there’s no problem,’ I’m saying that I couldn’t determine that there was a problem.”

“I have absolutely no reason to believe he was asked to send those documents.”

“For the initial period, the person involved didn’t even have access to his computer. He was on holiday in a foreign country, and via the opposing team and with their cooperation, we had to track him down and engage him and disturb him on his holiday to start liaising in terms of looking at his file access records and all of that stuff.”

What ESIC needs to launch an investigation into HUNDEN’s claims that some of his teammates knew he was abusing the coaching bug

“TeamSpeak recordings, some kind of in-game chat, something where instructions are being passed that link between what camera angle he had at the time, and obviously we’ve got that evidence, and what instructions were being given to the team. Anything else to me would just be speculation because you’ve obviously got a good in-game leader there, making decisions on behalf of the players in the moment, unless the coach is intervening in real time and there’s evidence of that, what could we know? I don’t know what Pimp has looked at, so…”

“I need evidence and I can’t even begin to speculate on what that might actually look like. I don’t know. But I’ll look at whatever somebody sends me and I’ll make a decision about whether or not it’s enough to sustain a prosecution of a player or players if they were complicit in cheating. The other thing that strikes me as pretty obvious about this is: Let’s say you don’t know your coach is in the bug. Unless he is saying to you ‘hey, guys, I’ve got this awesome view from this point on the map and I can see that this player, this player, and this player are guarding B site’ or whatever information, if the guy is just telling you what to do, are you not as a player entitled to just think ‘well, it’s the coach, it’s his job to tell us what to do’? You don’t know what he’s looking at. So if he’s staring at A and he’s saying ‘I think they’re going to rush A, come over here,’ how do you know where he is getting that information from?”

“All I’ve got at the moment is a guy who either lied to me a year ago or is lying to me now.”

“It goes against my instincts to proactively follow the lashings out of a liar on TV. If he’s got proof, send it to me, it’s not my job to go and find it because of something he said on TV. Bear in mind, I get about three accusations from members of the public a week of matchfixing in various matches, and in 95% of those cases it’s a disgruntled punter who lost a bet. I feel like I’m in that ballpark right now.”

“If I hear genuine speculation about an integrity threat, if we have the resources we would proactively follow that. We do a lot of work on non-member tournaments where we hear there might be some kind of breach. My resistance here is more to do with the specifics of a disgruntled coach, who has been backed into a corner, lashing out. I don’t think that’s a basis to begin an investigation. I’m finding it hard to take this seriously just because of the circumstances.”

Updates about extensive North American match-fixing investigation

“One of the things is, we were conscious of this communication gap, and it’s been very, very difficult, and I’ve got a hell of a lot better at not committing to timelines in a way that I did many, many months ago, because it can backfire in my face. Which is my fault, that’s the nature of these things. But we have opened on our website an open matters registry, where we’ll post updates on things.

“Whilst we’ve had these bans related to the Rebirth case and the public recording, it was a very public matter which is why I felt like we had to deal with it separately, but it is part of a far bigger investigation which unfortunately still has some way to run. The minute that we went public some months ago with the existence of this investigation, we were inundated with new information and evidence, and we are dealing with numerous other parties including law enforcement, and everybody has a different agenda in this. And I’m not complaining about that. For example, the FBI has its priorities. We have our priorities. The Canadian police have their priorities. And there’s a hell of a lot going on there, it’s big, and we’re upscaling our resources to deal with that.”

“We are looking at 35 players, six or seven teams, and we’re getting there, make no mistake, there is amazing material at our disposal here, but it’s going to take time. We’re getting access to some fantastic resources, but it’s taking time.”

“Bear in mind, guys, that a lot of these players, knowing that they’re in the shit in respect to CS, have tried to move to VALORANT or have tried to disappear from the scene. So we’re not just working with CS here, and we are getting wonderful cooperation from Riot and VALORANT for this.”

“I have to hold my hands up to some of these delays, we just weren’t resourced, but we worked our asses off to get resourced. We’re doing our best.”

Finalizing the Australian MDL match-fixing and betting inquiry

“Everybody, with the exception of three cases, all those guys have been individually notified of the final position with respect to their case and all of the evidence involved. We will absolutely make a statement about the totality, in fact it’s prepared, I’m sitting here looking at it. I’m not going to give you a timeline on that, simply because we have these three or four informal appeals to me based on representations that three or four players have made to me for amounts to I guess clemency, consideration, these are not formal appeals. We only had one formal appeal on that case and some guys who wrote to me asking for an informal review of their case and to give special consideration to special circumstances. And I have acceded to one of those I thought was a reasonable request, and I have dealt with that matter. Three of them I have decided not to accede to that, and I’ve got three or four to finalize, which are just guys making their case to me, saying ‘I think I deserve clemency for these reasons.’ And some of them are valid, but I’m afraid most are emotionally valid but they’re not legally valid, and I don’t want to be a dick about it, but I can’t change precedent because of emotion.”

“We didn’t set out to ruin anybody here, and I have tremendous sympathy for a lot of these cases, so from a solutions’ point of view we need to do a hell of a lot more on education, and we’re working on that a lot. We need to do a hell of a lot more on our member organizations communicating the rules and regulations that apply to these tournaments because, again, without wanting to dump on anybody, that was poorly done last year.”

“Bear in mind, there were guys who innocently placed bets in contravention of the code that they were subject to, and then there were guys who were matchfixing. There’s that whole spectrum. And trying to deal with that fairly and proportionately has been difficult. It’s taken so much longer than it should have, I’ll be the first person to say it. It has definitely taken too long, I have a ton of sympathy for some of these individuals. But at the other end of the spectrum, we’ve got guys who were engaged in corrupt activity knowingly, and this is why we’re still talking to New South Wales police, to Victoria police, because there has been criminal activity here. And dealing with it in a spectrum is difficult.

“There are so many things I would have loved to have done better because I didn’t understand the nature of the scene in Australia relative to from my normal life, which is at IEM Katowice, Cologne. I took ESEA Premier at the Australian level in my head, when I first started this, I thought I was dealing with that level. But I very quickly realized that we weren’t and that things got very messy because when we made these allegations and published the list, I suddenly had from literally every direction — and I’m talking Russian Bitcoin sites, operators who were offering markets in Australia illegally — all contacting me going ‘this player has an account, this player has an account,’ and it turned out it was hundreds and hundreds of bets. At one end, these were innocent, and at the other end they were corrupt as hell.”

“I am sorry for some of the guys who ended up getting hit really hard by this when perhaps, if we had had all of the information at our disposal at the beginning, wouldn’t have suffered so much. But a lot of guys who were originally banned I exercised my discretion to reduce their bans to zero, because I felt that it perhaps wasn’t fair on them to take that view. So a lot of guys have had a reduction in bans, but equally some have had an increase, because when we got new information a guy who I had thought placed 10 bets turned out to have placed 200, 300, 400 bets on matches in the league. Lessons learned guys, don’t take on cases involving 37 people at a time, which is now what we’re doing in America. Whilst there are 35 players involved so far in our investigation, we’ll deal with this three here, five here, two here, because dealing with 37 guys across a spectrum turned out to be highly problematic.

Former Project X CEO and Akuma case yet to be finalized

“If people are betting based on their guess at the outcome, when the odds become unfavorable they stop putting money on it. But if someone continues to pile money on even as the odds go down, down, down, down, that’s really suspicious because it indicates that they know the outcome of the event they’re betting on. Whenever this happens, members of our suspicious bet alert network inform us and we inform everybody. And then we look at why the betting is behaving as it is behaving. One of the frequent explanations is that there’s a fix. That the result has been bought, or known, or bribed, or determined in advance of the game. That’s match-fixing.”

“In this [Project X CEO] case, and without going into detail, we had sufficient reports to indicate that somebody knew an outcome that they should not have known, and therefore we took action. I really can’t go any further than this in discussing the Akuma case except to say this: There is a lot under investigation because when we made our announcement and went out to our members with this warning, I was again inundated with betting data relating to Akuma and Project X. Which, given our other investigations, I’ve had not had time to delve into to determine whether or not there is any kind of sustainable case against these players. We have to assume innocent and I want to release them from the speculation if that’s possible as quickly as possible or prosecute them if they are involved in this kind of activity. But, again, workload, resources, but we will do that shortly, we’ve had a lot of information about this case.

Should we prepare for another rainy day when it comes to the second wave of coaching bug bans?

“It’s not going to rain quite as hard as last time. What we finally need to resolve, bear in mind that this second batch is much shorter incidents, it’s far, far less. What caused me to reconsider our approach in respect to the second ban and has created some delays is that Valve reacted to our set of sanction around this by introducing some consequences for Majors and RMR. It gave me pause for concern with respect to the second batch because I’m aware that there are far greater potential consequences to these guys’ potential careers than what was originally just an ESIC thing in the first instance. Valve, and I’m not saying rightly or wrongly, has made it a bigger thing. So we’re cooperating with Valve to reach a conclusion I’m happy with before we go public with these cases. These ones we have reviewed now twice literally on an individual by individual case. There is going to be a release of sanctions in this case, but because of the Valve overlay and my own concern that any sanction have to again be proportionate against that background. I don’t want guys to be overpunished for something that is far, far smaller than that original batch of cases. I don’t want to screw anybody unjustly.”

“There are a few that are more than [one round], but really small, so one round or a part of a round. This is us looking individually at each one carefully and determining whether somebody should be sanctioned at all. I’ll give you an example, we’ve got ones where for a full round a guy is bugged but his camera is facing a wall. Or it’s in his own spawn, that type of stuff. I don’t want to paint myself into a corner and say one round is enough, I want to look at that round and what’s the impact. We’ve done all of that work, I just want to make sure that Valve and ESIC are aligned on this because I don’t want guys to be double punished for something that is within my control to determine.”

Full episode with Ian Smith

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Source: https://www.hltv.org/news/32281/esic-commissioner-sheds-light-on-hunden-inquiry-all-other-investigations