Fifth Street Gaming CEO: ‘The numbers today don’t matter’
Sharpr is a weekly newsletter covering the intersection of esports and betting
Hey everyone, Cody here (with an exciting update)
Starting next month, Sharpr will be a fully independent venture.
There won’t be any immediate or material changes, so you can still expect the same high-quality content delivered to you once a week (or maybe more often in the future). Of course, there may be opportunities to grow the newsletter in other areas, so I’m turning to my readers for your opinion on what you’d like to see more of and how I can continue to make sure every time you open this newsletter you’re getting something of value from it.
I’d really appreciate it if you could take just a few minutes to fill out this brief survey and provide some feedback. As always, I’m thankful to have you as a subscriber and without further ado, let’s jump into this week’s edition.
In this week’s edition of Sharpr…
“The numbers today don’t matter,” says Fifth Street Gaming CEO
Riot Games curbs staking on community Teamfight Tactics tournament
Allied Esports reports revenue of $2.4M in Q1 FY22
If this newsletter was forwarded to you, please consider subscribing.
‘The numbers today don’t matter,’ says Fifth Street Gaming CEO
A panel from iGaming NEXT 2022 in New York City featured a talk from leaders in the esports gambling space, including Fifth Street Gaming CEO Seth Schorr, GRID Esports Founder & CEO Moritz Maurer, and Bayes Esports CEO & Managing Director Martin Dachselt.
The 30-minute session touched on a variety of hot topics in the space, including how to effectively market esports, official data, rights holders’ position in wagering, and key blockers impeding the sector’s growth.
The moderator kicked off the discussion with slide deck metrics outlining that esports commands less than 1% of gross gaming revenue globally – Seth Schorr says “the numbers today don’t matter.”
“I think it’s focusing on those numbers that continues to impede people going all-in, and it’s a self-fulfilling prophecy if we keep talking about [the esports betting] opportunity as a small one.”
He insisted that the opportunity ultimately boils down to the sportsbook operators that are going to create the market, adding that esports has “suffered” by not being a priority. A key observation was that regulators aren’t holding up the progress, either. Instead, Schorr says commercial interest from operators and bettors will drive regulatory agencies to support esports with proper frameworks.
For most sportsbooks in the states, esports isn’t an area that’s attractive enough to allot the necessary energy and resources towards yet. But according to Moritz Maurer, the opportunity in gaming is far bigger than the esports segment.
“This expands to peer-to-peer, player-vs-house, and 24/7 games of virtual esports next to esports betting,” Maurer said. “Ultimately, games as a source of content for wagering is the big play – esports spectators betting is just one fraction of that.”
The argument illustrates that, while the market opportunity in esports betting may not be of considerable value today, there’s still ways the sector can be used to cross-sell existing products and create a powerful top-funnel acquisition strategy.
“You can invest into esports and be very successful if the investment is aligned with bringing in customers or cross-selling users to other established products,” Maurer added. “If the wager volume on your esports offering in isolation isn’t super satisfying, you can still, as an operator of many different product components, succeed in your strategy.”
Maurer said that just throwing an esports offering on your platform won’t do the trick, though. He notes that this is a younger audience accustomed to highly functional interfaces within games, and generally have a higher demand for user experience and functionality for sites in general.
🦈 Sharpr Take: I don’t find myself saying this very often, but this was a very interesting and informative panel from a few folks that deeply understand the intricacies of this space.
One of the points discussed in the session but only briefly mentioned above was the subject of effectively marketing esports betting opportunities to the audience. To many of the points made by the panelists, there’s still a lot of work to be done here, but it will be imperative to have buy-in from the top publishers to help carry this out and bring advertising to tentpole events on Twitch and YouTube Gaming. Schorr says that a number of the key publishers are already bought into the idea already, and those that aren’t are “darn close.”
I highly recommend watching this session or throwing it on in the background of your work day today if you haven’t listened already.
Riot Games curbs staking on community Teamfight Tactics tournament
Riot Games has stepped in to stifle a community-led Teamfight Tactics (TFT) tournament which called on spectators to use real-money to back their favorite players and streamers.
Per the rules outlined by the organizer, eight players could buy-in to the tournament for a $1,250 fee while spectators and fans could help put up the money in exchange for a cut of the $10,000 grand prize.
The event was organized in partnership with StakeKings, a crowd-staking platform “intended to open up staking to the general sports community.”
Riot Games has rejected the idea, noting that the tournament violates the publisher’s terms of service for hosting third-party events, which forbids gambling sponsors and activity.
Michael Sherman, Teamfight Tactics global head of esports, commented last week: “We’re excited to see the passion, but we’ve asked them to remove the ability for the community to stake their buy-in as this is not something we allow at this time.”
🗞 In the news
React Gaming Group (owners of LOOT.BET) has appointed Leigh Hughes as its Interim Chief Executive Officer.
Complexity will host a celebrity gaming tournament today at the HyperX Esports Arena during UFC International Fight Week.
Texas senator Ted Cruz weighs in on the loot box debate.
📈 By the numbers
Allied Esports reported revenue of $2.4M in Q1 FY22, noting increased foot traffic at its HyperX Esports Arena in Las Vegas.
Guild Esports posted a $6.1M loss in its latest financial report.
A petition urging Everton FC to sever its partnership with Stake.com (the controversial crypto betting platform afflicting Twitch) has drawn 20,000 signatures.