eResearch | The eSports betting industry is experiencing heightened activity as companies vie for market share, innovate with new software & platforms, and announce IPOs, financings, and M&A activities.
Cancelled or postponed live sports events have provided a catalyst for growth in the eSports industry as many pro sports teams experiment with online and virtual reality events.
Additional information can be found in eResearch’s previous article “Real-Life Sports Go Virtual Through Video Games with Sports Betting Platforms Offering Ways to Wager.”
eSports Betting Market
The betting industry experienced a drastic change with the introduction of eSports. Traditional online sportsbooks expanded their platform offerings to include eSports, while new platforms launched sportsbooks catering specifically to gamers and eSports fans.
According to Goldman Sachs Investment Research, the global eSports betting market is expected to reach US$17.2 billion this year, growing at a 44% CAGR, attributed to an influx of Generation Z viewers.
The eSports industry is forecasted to reach 276 million viewers globally by 2022, an audience larger than traditional sports leagues such as the National Football League. 18-27 year olds now watch more computer games than traditional sports.
Capital Markets Activity
At the beginning of this year, the online betting industry garnered significant investor attention as the largest company in the daily fantasy sports betting industry, DraftKings, listed on the NASDAQ exchange through a US$3.3 billion merger with SBTech and Diamond Eagle Acquisition Corp.
Further information on DraftKings’ acquisition can be found on eResearch’s recent article called “Sports Betting Giant DraftKings to go Public in $3B Deal”.
This week, FansUnite Entertainment Inc. (CSE: FANS) announced the acquisition of Askott Entertainment Inc., a software developer focused on betting technologies, to create one of the largest Canadian gaming companies focused on sports betting, eSports wagering, and casino games.
FansUnite is a Canada-based online betting technology company with its own sportsbook, focused on growing its business through M&A with recent transactions including McBookie, a provider of betting services in the U.K.
Last month, Luckbox, an eSports betting subsidiary owned by Real Times Games Holdings Limited which is incorporated in the Isle of Man, announced plans to list on the TSX Venture exchange this summer in partnership with capital pool company Elephant Hill Capital (TSXV: EH).
This month, Luckbox raised C$4.5 million in a private placement for pre-IPO funding, which was upsized from an initial range of C$2 million to C$3 million due to a heavily oversubscribed initial offering.
Earlier this year, Europe-based Esports Entertainment Group, Inc. (NASDAQ: GMBL) became the first eSports betting company to launch an IPO as it listed on the NASDAQ exchange, raising total proceeds of US$6.2 million, which included US$4.4 million from warrants exercised this month.
Esports Entertainment is a decade old company with a focus on eSports wagering and 18+ gaming, with licenses for online gambling in Malta, Curacao, and the Netherlands, and capabilities to accept wagers from over 149 jurisdictions including Canada, Japan, Germany, and South Africa.
New Wave Holdings Corp. (CSE: SPOR) recently announced the closing of the first tranche of its private placement of secured convertible debentures. Total gross proceeds of C$500,000 will be used towards working capital and general corporate purposes.
New Wave Holdings is an investment company who provides capital and advisory services to eSports teams, event organizers, and technologies, with recent transactions including Tiidal Gaming, Even Matchup Gaming, and Activate Entertainment.
Innovative Technologies
Newgioco Group Inc. (NASDAQ: NWGI), recently announced offerings for eSports wagering through its online betting channels in Italy. The Canada-based technology company has a proprietary wagering platform which supports bet processing.
Earlier this year, Newgioco listed on the NASDAQ stock exchange and signed two new U.S. clients to offer its online- and land-based sports betting platform.
In March, eResearch published an update Equity Research Report on Newgioco, which can be viewed through the article called “Newgioco Update Report – Virus Causes Revenue Flu”.
Last week, Aquarius AI Inc. (TSXV: AQUA), announced intentions to reposition its patent pending customer acquisition technology to focus on increasing users within its new eSports gambling business.
To facilitate this transition in business strategy, Aquarius AI hired a new president, Graham Martin, a renowned gambling entrepreneur who most recently held the position of President of International Development at Newgioco.
Early this month, Media Central Corporation Inc. (CSE: FLYY) announced the launch of its ECentralSports.com website, an aggregator of news, events, and analyses for gaming, which already reached several advertisement partnership deals with major eSports gambling sites including LOOT.BET, ArchangeBet, and BeWinner.
Media Central is expected to drive advertisement revenue by connecting its 6.5 million eSports fans, who are interested in betting on their favourite professional eSports teams and players, with premium online gambling platforms.
This year, FANDOM SPORTS Media Corp. (CSE: FDM) launched its proprietary payment technology platform to support the eSports industry in monetizing global eSports debates, and improving payment processes for eSports betting and other microtransaction-based revenue opportunities.
FANDOM SPORTS’ payment platform is powered by Blaze blockchain, which uses distributed cryptography to secure player identities, enable 50,000 micropayment transactions per second, and increase the speed on API calls for data.
To develop the platform, between 2018 and 2019, FANDOM SPORTS raised over C$4 million to invest into intellectual property and technology development.
eSports Betting in 2020
When the COVID-19 health crisis shut down live sporting events, bookmakers scrambled to fill the void and sportsbooks began offering lines on eSport events.
Even when live sports return, eSports betting is expected to continue, with eSports gambling revenue anticipated to more than double in 2020 from US$7 billion in 2019.
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