Imagine the aspiring gamer, hard at work grinding the ladder for months and finally reaching challenger, rank 1, grandmaster, legend. Perhaps they’ve joined an amateur squad and stuck with it through roster changes and agonizing losses. They’re upsetting teams salaried by big gaming organizations in open brackets and leagues. Maybe they’ve qualified for an upcoming LAN – their streaming has really taken off. Things are looking great, right?



Not so fast. While pro players seem like they have it made, becoming a well-paid esports athlete is immensely challenging. And dubious gaming organizations are a big reason why.

(Image: Blizzard Entertainment)



The dark side of sponsorships

After achieving a certain level of success, most competitors feel that they warrant sponsorship. But a sponsorship isn’t all it’s cracked up to be. The public only gets to see a very PR-approved version of how many gaming organizations really function.

Often times, the first organizations that talented new players talk to make downright insulting offers. Ever tried to live on $400 a month? In esports, teams outside the top twelve in a region can expect a triple-digit monthly paycheck. It’s very hard for players to assess their own value.

Nevertheless, most players will take the first offer because, well, there isn’t much else. If they’re keen, they will refuse these early offers and wait for the big fish out there lingering with a livable contract.

If you sign a contract that guarantees you a certain sum per month, what happens when your gaming org inexplicably stops sending that cash halfway through the term? The majority of twenty-somethings do not have the resources or conviction to take legal action over something like $3,000 in outstanding remuneration.

(Image: Getty Images)

Law and disorder

The fact is, there is an ocean of legal inconsistencies in the “contracts” holding together the professional gaming community. Most of them are shaky enough that either party could withdraw at any time. Some have illegitimate competitor buyout and non-compete clauses. Most players don’t have the legal education to spot a bad contract; more likely, they’re so thrilled to be offered money to play video games in the first place that they’ll sign anything put in front of them based on the merit of the character and the reputation of the brand proposing the deal.

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W4 and I9 forms? Ha. The vast majority of organizations offer an agreement to hire players as independent contractors in an effort to minimize accountability. This is where we get into an unsatisfying gray area. Contractors are not held to employment law, while employers have a mountain of obligations to their employees.

Some believe if a gaming organization that imposed strict requirements on their contractors were to be audited by the IRS, they would be required to change to an employee-employer relationship, which could mean a number of things. Besides having to repay back taxes that should have been withheld on every check that went out for every player, the organization could also be obligated to match up to 7% for Medicare. In West Berlin, where Riot EU is chiefly located, organizations would have to match 21% for Social Security.

Gaming organizations have been able to get away with this limited liability model for so long because there is simply no regulation in esports.

(Image: Astralis.gg)



Few options

So what do players do if they feel they’ve been improperly misclassified as an independent contractor? One option is to file a Social Security tax Form 8919 to tally up the correct share of Social Security and Medicare taxes. There are also relief provisions on the IRS website if you are a part of a gaming organization looking to reclassify your contractors as employees.

There’s marginally good news on the horizon. Alternatives to sponsorships are growing; well-known players are breaking out and starting their own businesses. One of the best examples is the Danish CS:GO team formerly known as Team SoloMid. After leaving TSM, the players started their own brand, Astralis. They now have full control over how they market themselves, what peripherals they use, what clothing they wear, what events they participate in, and how their prize money is distributed.

This is a difficult route for new players to take, of course. It’s hard enough to just stay competitive; creating your own brand and securing sponsorships and investors is time-consuming and challenging. Juggling managing and marketing with practicing seven hours a day is nearly impossible.

Ultimately, the onus is on organizations to step up, do the right thing, and take care of their players. Not every gaming organization preys on talent, but enough do that it’s becoming a serious problem. With esports rising in popularity, it’s essential that orgs clean up their act and players learn how to advocate for themselves.



Dylan Walker is on Twitter at @Dyluuxx

