SNES
Winterfest
GAMME
All first time events run by someone/orchestrated by someone outside our community.
For-profit events ARE the events you have to worry about. The general business model for events is this
-Use entry fees to pay for prizes and for your profit, and try to get a lot of attendance by "guaranteeing" prizes.
The problem? The guaranteed prizes are almost the entirety of the time not actually guaranteed. It isn't money sitting in a bank account ready to be paid, instead its money that is gonna come into their hands when enough people register. If not enough people register then more often then not a for profit tournament will pay themselves and the venue before they pay their "guaranteed" money to the winners.
MLG is way different cause it doesn't aim to make money off of entry fees. They make some money but ultimately no where near enough to cover the ~1-1.5 million it costs to put on an event (entry fees across Tekken 6, Brawl, and Halo would only net them about...$90,000 and that is actually a HIGH estimate assuming all games cap and Tekken had 256 people instead of 128, which is its normal cap). MLG instead has sponsors: Dr. Pepper, BIC, Stride, Ball Park, Hot Pockets, Doritos, Jack Links, Best Buy, Gamestop Timer Warner Cable, Old Spice, Geico, Gunner, and a few others I'm probably forgetting off of the top of my head. And these aren't your sponsors like Monster or Red Bull that show up to an event with 2-3 people, hand out free drinks for a few hours and then leave. These are real sponsors who actually contribute money and have booths and have a real presence at events.
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When I saw Winterfest and GAMME (you can see I posted about GAMME being a possible sham over a week before problems started to arise) I knew before it happened that it was a scam or would at least not give out what it promised. It is very easy: if you see a tournament announce a guaranteed prize payout ask yourself this simple question: where are they getting the money to cover these payouts, the venue, and equiptment, and to pay their staff? If the only answer is: from entry fees, then you need to raise a red flag if its a for-profit person.
Guaranteeing a $1,000 or $2,000 isn't to much of an issue, it can be done for an event that is using venue fee money only. But tournaments like Winterfest, Gameunicon, and GAMME were clearly promising upwards of $20,000 across multiple titles, and that is almost never something that can be covered by venue fee only (and the first expense for these guys to forget about isn't paying themselves, its paying the prizes).