The tax obligations of the professional gamer
Surely you may be tired of watching one of your children playing the FIFA video game, feeling like Messi from your home console or computer. How many hours lost in front of a screen, you might think.
You’ve probably even considered taking him to a psychologist… Well, let me tell you that your son doesn’t waste any time. Without knowing it, he may be in front of a professional gamer. And what is this?
The online age has created a new profile of professional sportsman and an incipient business. The so-called electronic sports, esports, already generate important sums of money in the world. And the most incredible thing is that the vast majority of them are practiced from a home computer.
This may seem nonsensical generated almost 600 million euros in 2017 and it is estimated that in less than two years (2020) double this amount.
Make money playing. It’s that simple. And it doesn’t matter how old you are. There are many interested parties in this business. There are video game companies, bookmakers, brands, advertising and the big players: gamers. Their activity and their hours in front of a screen have gone from being a leisure or entertainment activity, to many of them starting to earn a living with it.
The world of video games is booming. Every year the number of companies designing computer programs that can simulate an official football match with great realism has increased. The Messi we all see on television or in football stadiums has a clone in online sports, with an astonishing physical resemblance.
Now football matches or any other professional sport can be watched not only on television screens, but from any other electronic device (mobile, tablet, laptop …). The difference is that the user goes into action and wants to be the protagonist within the game. You bet money and win by playing.
In addition, the ‘electronic player’ not only plays individually, but participates in tournaments and championships, which is an added stimulus to win money and beat other gamers.
So far the most fun part of this new sport. However, where there is money, there are usually economic interests. In this sense, gamers encounter a conflict. And if they are or want to be considered as elite athletes also have obligations. If you make money from the activity, you must declare those profits. The feared taxes.
What is a gamer’s income like and how is it taxed? There is a big legal vacuum here as it is a novel business. Most sports players earn income within teams, associations or sports federations. They have sponsorships, image rights, income from advertising… All the same as a professional sportsman, but in electronic version and comfortably seated in front of a screen.
The law is treating gamers in the same way as their analogue counterparts when it comes to paying their taxes.
However, there are many doubts or unresolved issues. The way in which an electronic player carries out his activity is very different from that of a traditional professional sportsman.
For example, David is a 19-year-old Erasmus gamer in Berlin, Germany. From there he plays and wins in sports. He trains in a gaming house two days a week, four hours a day. His parents live in Spain. He has won 30,000 euros by participating as a gamer in a tournament held in Tokyo. Where should David pay these gains?
The answer is not simple. Especially because today gamers are not considered professional athletes at the legal level. It is, for the moment, an aspiration.
Therefore, the parties involved in the sports work conscientiously to achieve a regulation according to this incipient economic activity. And the actors in this business are growing.
Brands, advertising agencies, sponsors, professionals from various sectors and gamers seek to simplify their tax activity and, above all, legal certainty.
Currently, the sports sector is vulnerable as there is no specific framework for them, however, the fact that it has become an economic activity that can see its turnover doubled in less than two years, makes them pressure more and more.
We live in an era of change. The new technologies, the Internet, the digital are generating new ways of generating money in the market. The case of electronic sports is the best example. However, as we have already seen, as it is a novelty, there are many doubts to be resolved.
And in this sense, we always recommend putting ourselves in the hands of professional experts who can advise us from a legal, financial and in this case, fiscal point of view. They are the ones who know the laws of each country and how they are adjusted according to the activity.
What is unquestionable is that a profile has been born, that of the gamer, a sector and a business, that of esports, which need an urgent regulatory framework. And thus prevent gamers from evading other countries that are looking for a more advantageous taxation. Something that we see happening frequently in the world of professional and elite athletes.