US Justice Department agreed for a settlement with Activision on esports salary limits
It is estimated that 60% of the Americans report they enjoy playing video games on a weekly basis and over millions like to watch pro league tournaments.
Relying on a departmental lawsuit filed on Monday, The US Justice Department agreed for a settlement with Call of Duty publisher Activision over salary limits in a professional esports league. Overwatch and Call of Duty professional teams will be given a specific salary cap, along with the Competitive Balance Tax which will commence once a team crosses a certain threshold.
Reportedly, The US District Court in Washington alleged that this tax “effectively operated as a salary cap, penalized teams for paying esports players above a certain threshold and limited player compensation in these leagues.”
This complaint also said that Activision Blizzard Inc had dropped its plans for tax in October 2021.
“The tax was never levied, and the leagues voluntarily dropped it from our rules in 2021.” Activision stated. It added more, “We have always believed, and still believe, that the Competitive Balance Tax was lawful, and it did not have an adverse impact on player salaries.”
Notably, it is estimated that 60% of the Americans report they enjoy playing video games on a weekly basis and over millions like to watch pro league tournaments. The Call of Duty publishers have generated hundreds of millions of dollars from sponsorship fees, exclusive streaming and broadcasting deals, franchise fees and they are under the beady eye of the government.
Though it needed approval from a federal judge, Activision settled the matter and the US Justice Department asked not to set any effective payment cap on esports player’s payment in future.
