E-sports becomes a sport: Opportunities, requirements, and tax advantages when founding an e-sports club from 2026 onwards

1. Introduction: E-sports between social recognition and tax reform

E-sports have developed rapidly in recent years and are no longer a marginal phenomenon. Millions of viewers follow national and international leagues, professional teams work with structures similar to those of traditional sports clubs, and the promotion of young talent is becoming increasingly important. Sales in this sector have also developed very positively in recent years. This shows that both the economic substance and social interest are growing.

With the Tax Amendment Act 2025, which will come into force on January 1, 2026, e-sports will be explicitly recognized as a sport under non-profit law. This will create a reliable tax framework for the first time, opening up new opportunities for clubs, coaches, volunteers, and the entire industry.  

This article explains the conditions under which an e-sports club can be founded, the tax advantages that arise, and why now is the right time to establish sustainable structures.

2. What does the recognition of e-sports as a sport mean?

The new legal regulation clarifies that e-sports are considered a sport within the meaning of non-profit law. This recognition not only creates equal treatment with traditional sports, but also ensures that e-sports clubs have access to the same tax breaks and funding opportunities.  

However, it is crucial that non-profit status only benefits those forms of e-sports that meet certain quality and youth protection standards. The competition must take place between people and require motor and tactical skills.  

The following are not eligible for benefits:

• Games without USK age ratings,
• Games with content that glorifies violence or otherwise violates human dignity,
• Content that violates youth protection regulations

In this way, the legislator ensures that e-sports clubs not only promote athletic performance, but also assume social responsibility.

Consequence: An e-sports club that wants to secure its non-profit status in the long term needs clear gaming and youth protection concepts (positive lists, age checks, prevention concepts, etc.).

3. Founding an e-sports club: requirements and procedure

The founding of an e-sports club follows the well-known association law of the German Civil Code (BGB). Anyone who wants to found a registered association (e. V.) needs at least seven founding members of legal age. Together, they decide on the statutes, elect a board of directors, and document the founding in minutes. Only after entry in the register of associations does the association become legally capable.

The statutes are the heart of the association. They define the purpose, structure, decision-making processes, and all rights and obligations of the members. For non-profit e-sports associations, the statutes must clearly state that the association pursues the “promotion of sport – in particular e-sports.” The classic model statutes components such as selflessness, exclusion of profit distribution, asset commitment, and regulations on membership and the association's organs are also required.

In practice, it is advisable to draw up e-sports regulations in addition to the articles of association. These can regulate game lists, tournament rules, data protection provisions, streaming requirements, educational guidelines, and youth protection measures. In the field of e-sports in particular, such regulations are an important tool for demonstrating professionalism to the tax office as well as to parents, schools, and sponsors. 

After the founding meeting, the association is registered for tax purposes with the tax office. The tax office reviews the articles of association and decides whether the requirements for non-profit status are met. If the application is approved, the association receives a provisional exemption notice.

4. Non-profit status and its advantages – why it is worthwhile for e-sports associations

The new legal regulations coming into force in 2026 will bring considerable advantages for e-sports clubs. Non-profit clubs are generally exempt from corporation and trade tax as long as they use their funds in accordance with their statutes. At the same time, they benefit from an increased exemption limit of €50,000 per year for economic business operations.

In addition, the limit for the so-called timely use of funds will be raised to €100,000. This makes it easier for young e-sports clubs to build up reserves without having to force immediate reinvestment in association structures.

A particularly strong argument is the possibility of issuing donation receipts. This makes e-sports clubs significantly more attractive to sponsors, funding agencies, foundations, and private supporters. Membership fees can also be tax-deductible. In addition, there is easier access to public funding, particularly from areas such as youth welfare, media education, and sports promotion.

The social impact should not be underestimated either: a non-profit e-sports club enjoys a different status than a loose community or an informal team. Recognition as a sports club strengthens credibility and trustworthiness, especially in cooperation with schools, local authorities, and youth facilities.

5. The role of trainers and coaches: new flat rates and relief

The new regulations bring additional benefits for trainers, coaches, and coaches in e-sports. From 2026, the trainer allowance will increase to €3,300, while the volunteer allowance will increase to €960. These amounts can be paid tax-free, provided that the activity is carried out on a part-time basis and within a non-profit framework.

E-sports trainers, youth coaches, and supervisors will therefore benefit directly, as many of their activities, such as training, educational support, tournament preparation, and media literacy training, clearly fall within the scope of eligible activities. The extended liability privileges for volunteers also make their work considerably easier and provide greater legal certainty in everyday club life.

6. Who really benefits from an e-sports club—and what are the limitations?

Non-profit status is not a panacea, but a tool that must be used correctly. It is particularly worthwhile for clubs that promote e-sports as a popular sport, work with young talent, teach media skills, or offer integrative projects. The new regulations are also ideal for traditional sports clubs that want to set up an e-sports department.

However, non-profit status is less suitable for structures that operate primarily on a commercial basis, such as professional teams that generate high sponsorship and media revenues or pursue investor models. For such constellations, a combination of a registered association (for youth and public welfare structures) and a corporation (for commercial activities) is often a good option.

7. Conclusion: A new chapter for German e-sports

With the recognition of e-sports as a sport under non-profit law, Germany is taking a long-overdue step that will change the scene forever.  

E-sports clubs will finally have the opportunity to operate in a legally secure manner, with funding and tax breaks. Anyone who wants to found a club or professionalize existing structures will find the perfect conditions for doing so from 2026 onwards.

The combination of tax advantages, social recognition, better access to funding, and clear legal classification makes now the ideal time to take action and establish or expand e-sports structures.

If you have any questions about founding a club or would like advice, please contact us.