Choosing the Right Business Entity as a Pro Esports Player: LLC, S-Corp, or Sole Proprietorship

When I first started working with esports players and content creators, I noticed something important: almost nobody had been taught how to run the business side of their careers. You’ve spent years leveling up your skills, building a following, and making a name for yourself in the scene. But when it comes to taxes and business structures? Most of you are either winging it or following advice that doesn’t fit the unique way you earn.

I’ve seen how much money that mistake can cost. And I don’t mean a few bucks here or there, I’m talking about thousands of dollars in unnecessary taxes and missed opportunities to protect your income.

Why This Matters More Than You Think

In esports and content creation, income can be unpredictable. One month it’s tournament winnings, the next it’s sponsorship deals, merch, or ad revenue. That variability is exciting, but it also creates risk if you don’t have the right structure in place. Choosing the right business entity isn’t just paperwork. It can mean the difference between scrambling to cover a tax bill and actually having cash set aside for your next big move.

Take one of my clients: a pro gamer who started out as a sole proprietor. They were paying self-employment tax on every dollar they made. Once we shifted them into an S-Corp, they were able to split their income between salary and distributions. That one decision saved them about $7,000 in taxes that year. Imagine what you could do with that money — reinvest in better equipment, travel to more tournaments, or even just enjoy some financial breathing room.

The Path Forward

If you’re just starting out, an LLC is often the right first step. It creates a barrier between your personal assets and your business activities, which matters more than most players realize. From there, we can look at whether it makes sense to elect S-Corp status. The timing of that move is critical. Do it too early and you add unnecessary complexity. Wait too long and you leave money on the table.

That’s why having a CPA who understands your industry is so valuable. Generic advice might work for a local coffee shop, but your income streams are different. They don’t fit neatly into a traditional mold. You need strategies that reflect the realities of prize pools, content platforms, and brand deals.

Avoiding Common Mistakes

The biggest mistake I see is people assuming they’ll “figure it out later.” By the time tax season rolls around, it’s usually too late to make the moves that really matter. Another common trap is thinking that forming an S-Corp automatically solves everything. It doesn’t. The right choice depends on where you are in your career and what your long-term goals look like.

A Closing Thought

I get it, nobody got into esports to learn tax law. You want to compete, create, and grow your audience. My role is to make sure the business side doesn’t hold you back. At Dark Horse CPAs, I work with players and creators every day, helping protect what they’ve earned and set themselves up for the future.

If you’ve been wondering whether you’re structured the right way, let’s talk. A 30-minute strategy session could show you exactly where you’re leaving money behind and how to fix it.

About Dark Horse CPAs

Dark Horse CPAs provides an integrated suite of services including tax, accounting, fractional CFO, and wealth management to small businesses and individuals across the U.S. The firm was established to transform the client experience by offering personalized, high-quality services that small businesses and individuals deserve. As Dark Horses in their industries, these businesses benefit from advanced tax strategies and accounting insights typically reserved for larger companies. With a nationwide presence and a team of dedicated professionals, Dark Horse CPAs is committed to your success. Get a quote today.