Taxes to Start "Hitting Different" for Esports Stars

(photo source: Liquipedia.net)

The Esports industry will continue to make headlines as prize money for the competitive video game tournaments rises. Now the best gamers/big earners are catching the attention of state tax collectors.

“Jay Won,” one of the star Esports player for the video game team, San Francisco Shock, took home $110,000 for winning the Overwatch League in late September ’19. The tournament was played in two cities: Philadelphia, PA and Los Angeles, CA. Which meant Won earned the prize while competing in two states, with two tax codes.

The total prize pool for the tournament was $3,500,000, according to the site esportsearnings.com. But Won was really in “Shock” when he found out how much he had to pay in taxes on the prize.

With big names in professional sports like Jerry Jones and Bob Kraft investing in Esports teams, these top gamers are drawing in big bucks. According to a story in the Washington Post, the Dept of Revenue is looking into ways to make sure they start getting taxed like the pros.

The communications director for the PA State Dept of Revenue stated,  “(the) Department is aware that esports is a new industry and that is growing in popularity. The department has programs to help the emerging industry to understand and improve their tax compliance.”

You may have heard pro athletes gripe about the so called “Jock Tax.” That tax makes sure athletes pay tax in each state in which they compete or train in.

So while Jay Won may not look like your standard “jock,” the Department of Revenue is surely going to consider him one in the very near future.