As someone that started putting out feelers for cash prizes I'll chime in with my research on the topic.
- Cash prizes are okay by PA law. I looked into this and cash prizes for this are fine with no worry of running afoul of regulation, until you hit a point where the payout is deemed taxable. At that point it's no worry of FITES in paying any extra taxes, but the winner will have to pay taxes on that cash prize.
It's hard to say exactly what that cut off amount is because game tournaments are considered not similar to something like a poker or gambling tournament. Avoiding the legal debate, let's just say any cash prize may need to be kept small.
- Are cash prizes worth it? Just because there is a cash prize doesn't mean it is worth the time and effort to get it. I've already pointed out that cash prizes may need to be small at first. For some of our attendees that wouldn't even cover travel expenses, let alone lodging and food for the weekend.
- Cash prizes take a lot of work. Essentially the gaming community is asking for our organization to make it rain dolla dolla bills out of the sky that we pull from a giant sack of money. Well it takes a lot of leg work to get those prizes and we need to put on an event that will get sponsors to shell out the cash.
There are work arounds to this, but once again it involves reducing the overall cash prize and trying to get sponsors to work with teams in covering their expenses. But that's less cash in a player's hand at the end.
- FITES is a non-profit. The primary goal of FITES as a non-profit is to benefit our community through charitable donation. That is an attraction to some of our sponsors. It may not sit well with them, and the general public, if we tell people we donate proceeds from our events, but then make these pay outs to players. It would require us to make some changes in how we conduct our business.
And here is some other less structured ranting. I would love to see a cash prize tournament. I feel like it would make for an exciting and different form of event that would showcase some awesome gaming skill, but I don't think it would be the magical trip to a wad of cash that most players think it is.
For the number of players I see complaining about a need for a cash prize you would think there are tens of thousands of gamers that pay their rent by playing Counter Strike. I know that's not true, and so do you. What are all these gamers going to say when there are only about 15 people getting a cash prize? Will we be inundated with complaints that we didn't offer enough cash to everyone?
And to make a cash prize event really worth the effort and time it would need to be handled a little differently than, here comes any old Joe. It wouldn't be fair to the competitors, attendees, and anyone watching on a stream to have a tournament filled with scrubs and only two to three good teams. It would have to start almost as an invite event.
There's a lot to be said on this topic, and it's still something I work towards, but for now it would involve MASSIVE changes to how FITES operates, what the costs are, and how much work would need to be put into it.