Professional Overwatch player Felix “xQc” Lengyel has been suspended and fined for using a homophobic slur on a personal live stream.
Mr Lengyel was suspended by the Overwatch League for four matches and fined $2,000 (£1,433).
Overwatch League is the first major professional e-sports league featuring competitions in 12 cities worldwide.
E-sports team Dallas Fuel has also suspended him for the rest of the first stage of the competition.
Stage one runs from 11 January to 10 February.
During his suspension, Mr Lengyel will receive “focus training, physical training and support” from the team.
The incident occurred on 18 January during a live stream.
According to technology blog Engadget, Mr Lengyel directed a homophobic insult at rival team Houston Outlaws player Austin “Muma” Wilmot, in response to being taunted over a victory.
The Overwatch League said that his comment violated the League’s code of conduct.
“The Overwatch League takes standards of player behaviour seriously, whether during league play or otherwise, and is committed to responding swiftly when violations occur,” the League said in a statement.
Dallas Fuel also issued a statement, saying that it hoped that Mr Lengyel would be able to “improve as a professional player who is reflective of the principles of the Dallas Fuel organisation, his team-mates, and of the Overwatch League”.
The e-sports team added: “No one wants to see Felix succeed more than we do.”
The Overwatch League launched on 10 January, and according to Robert Purchese, a senior staff writer at video game website Eurogamer, is a big push by league developers Blizzard to “cement” Overwatch as a professional e-sport.
“Increasingly over the last year or so, Overwatch has been linked with and talked about having more and more of a toxic environment in its online community – not just insults only from rival teams, but also from teams insulting their own members,” he told the BBC.
“Because Blizzard wants the league to launch perfectly, they’ve come down hard on players, but also trying to show people looking in from the outside that this isn’t a toxic game.”
Trading insults is a problem affecting almost all online gaming communities, but Mr Purchese said younger people and women have experienced “the brunt” of toxic comments while playing Overwatch.
“Blizzard is desperate to get this stuff away from its game. It’s an impossible battle, but it should do what it can,” he said.
Although it wasn’t related to gaming, the incident of YouTube star Logan Paul posting a video showing the body of an apparent suicide victim is likely to be in the minds of operators of online content streaming services, and making Blizzard and Dallas Fuel wary, he added.
However, since e-sports teams are “big-money ventures”, professional players should be cautioned about what they can say publicly, the same way football players are, said Mr Purchese.
“Football players tend to toe the line a little – they don’t speak out the way they do on the pitch,” he said.
“The fine doesn’t mean anything, but the four-match ban might hamper a team’s chances, so it might send the right message.”