Tax Information

For transactions occurring from January 1, 2026 to December 31, 2026, it is our understanding that tournament entry fees can be deducted from the total withdrawals made to obtain the net income that a player would pay taxes on, regardless of whether this is classified as “hobby income” or “business income.”

For more information on the difference between hobby income and business income, see the IRS guidance: Know the Difference Between a Hobby and a Business.

Players operating as a business may have additional deductions such as for phones, internet service, gaming peripherals, and other business-related expenses. A good overview of deductions for esports players and streamers can be found at DarkHorse CPA: Tax Deductions for eSports Players and Streamers.

All income from skill-based tournaments may need to be reported on your tax return. Your full transaction history — including all tournament entries, prizes, deposits, and withdrawals — is available in your account at all times to assist with your tax preparation.

We strongly recommend consulting a qualified tax professional to understand your specific tax obligations.

If required by applicable tax law, Eternel Games will issue tax forms (such as IRS Form 1099) to players who meet the applicable reporting thresholds. Players are responsible for reporting all income regardless of whether a tax form is issued.