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Based on a ministerial complaint filed Monday, the US Department of Justice has reached an agreement with Call of Duty publisher Activision regarding salary caps in a professional esports league. Overwatch and Call of Duty professional teams will be assigned a specific salary cap, as well as the Competitive Balance Tax that will kick in once the team passes a certain threshold. The US District Court in Washington reportedly argued that this tax "effectively works as a salary cap, penalizing teams for paying esports players above a certain threshold and capping compensation for players." players in these leagues. This complaint also indicated that Activision Blizzard Inc abandoned its fiscal plans in October 2021.
"The tax was never collected and the leagues voluntarily removed it from our rules in 2021." Activision said. He further added: "We have always believed, and still believe, that the Competitive Balance Tax was legal and had no negative impact on player salaries."
In particular, approximately 60% of Americans say they enjoy playing video games every week, and more than millions enjoy watching professional league tournaments. Call of Duty publishers have generated hundreds of millions of dollars through sponsorship fees, exclusive streaming and streaming deals, franchise fees, and are under the watchful eye of the government.
Although it required approval by a federal judge, Activision settled the matter and the US Department of Justice asked not to place an effective payout cap on esports player payouts in the future.
