EBET lays off employees, shifts away from esports
Sharpr is a weekly newsletter covering the intersection of esports and betting
Hey everyone, Cody here.
Today we’ve got some breaking news for our readers: EBET, formerly known as Esports Technologies, has laid off a number of its employees and will shift its focus away from the esports betting business, according to multiple sources familiar with the situation.
A massive shoutout to seasoned industry reporter and Sports Business Journal’s former Esports Editor James Fudge for contributing to this week’s newsletter.
You know the deal, let’s jump right in.
In this week’s edition of Sharpr…
EBET lays off employees, shifts away from esports.
Twitch says it's looking into gambling content.
Overwatch will remove paid loot boxes this month.
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EBET lays off employees, shifts away from esports
Multiple sources familiar with the situation tell Sharpr that the NASDAQ-listed esports wagering products and technology company EBET has laid off a large number of employees related to its esports betting business.
Sharpr has verified with multiple sources that a “large number” of employees have been let go from EBET.
Sources say the company will begin shifting its focus from esports wagering to the casino business.
Sharpr has also learned that, with the exit from its esports wagering business, the company has decided to part ways with two key strategic advisors: XSET co-founder, music producer, and hip-hop artist Clinton Sparks; and Atari and Chuck E. Cheese Founder Nolan Bushnell.
The company will now focus on where it is currently generating revenue: in its casino gambling operations overseas. One source said the company has been generating a majority of its revenue from gambling in countries such as Thailand and Germany, and generating little-to-no revenue from its esports-related endeavors. Sharpr could not independently verify this part of the story, as of this writing.
On a related note, EBET filed an 8K filing with the U.S. Securities and Exchange Commission (SEC) on August 2, announcing that EBET Chief Operating Officer Bart Barden would exit the company next year.
“On August 2, 2022, EBET, Inc. (the “Company”) notified Bart Barden, the Company’s chief operating officer, that Company was terminating his employment with an effective final date of employment services being February 2, 2023.”
Back in October 2021, EBET sought to diversify its business through the acquisition of Aspire Global’s B2C business for $75.9M. Through the deal, EBET incorporated online casino and sportsbook brands including Karamba, Hopa, Dansk777, BetTarget, Griffon Casino, and GenerationVIP. At time of acquisition, EBET gained a customer base of 1.25M players and the chance for “cross selling esports betting opportunities.”
Perhaps changing its name from “Esports Technologies” to EBET in May was foreshadowing its inevitable exit from esports.
Sharpr has reached out to EBET for comment but the company has not responded at the time of writing.
(James Fudge contributed to this article.)
🦈 Sharpr Take: News of company layoffs is not hard to come by at the moment. The economic downturn is putting pressure on every corner of life, and for a number of individuals, that has unfortunately meant the loss of jobs.
No company is exempt from these economic implications, but in the case of EBET, it’s perhaps more noteworthy that the company, which has long hung its hat on esports wagering technology, will be stepping away from this segment in what seems to be decisive fashion.
The term “esports betting” is thrown around very generously in the industry. Most of the time from companies and brands that don’t exactly have a pot to piss in when it comes to talking about it, but are quick to attach themselves to the novelty and interest in this emerging vertical.
This esports betting sector is a challenging field to prosper in. The limited size of the market today (especially in regions like the U.S.) and inaccessibility has seen only few operate in a way that is truly scalable.
Only a few months ago in May, Esports Entertainment Group revealed the company would sell its esports assets, citing considerable monetization difficulties. Meanwhile, its esports betting brand VIE has struggled to gain any sort of meaningful momentum, generating less than a few hundred dollars in gross revenue since receiving state regulatory approval in New Jersey in January. VIE earned a mere $8 in gross revenue in June.
As has EBET, Esports Entertainment Group shifted its attention toward its traditional B2C casino and sportsbook subsidiaries Argyll Entertainment, Lucky Dino, and Bethard. This common thread tells us that it may be too early for esports betting in the U.S. to underpin an entire business model on its own. The companies who bet on this sector, are (more often than not) quickly diversifying portfolios to weather the storm.
Twitch says it's looking into gambling content
Gambling may not be a feature on Twitch for much longer, Bloomberg’s Cecilia D'Anastasio reports.
A Twitch spokesperson says the company is “currently in the midst of a deep-dive look into gambling behavior on Twitch.”
At time of writing, “Slots” is the ninth most popular category on the streaming platform.
The story details the latest in the ongoing Twitch gambling saga, where cryptocurrency casino platforms such as Stake and DuelBits lure young viewers in with top streamers and celebrity endorsements.
One of which is the harrowing account of a 26-year-old who declared bankruptcy after gambling away $60,000 on Stake. He was introduced to the gambling platform by former Overwatch professional Felix “xQc” Lengyel, a popular streamer who frequently broadcasts reckless casino gambling to tens of thousands of viewers. Lengyel was recently seen losing $164,000 in cryptocurrency in roughly two-and-a-half minutes.
In May, recording artist Drake entered into an official partnership with Stake, where he would livestream his gambling under the username StakeDrake.
Viewers watched Drake lose $20M in his first-ever partnered livestream.
The rapper’s second appearance in July attracted more than 200,000 viewers.
Financial terms regarding Drake’s partnership with Stake are unknown, and spokespeople for the rapper declined to comment on Bloomberg’s request.
The Twitch gambling debate is long-winded and perhaps never ending. While a spokesperson for the company was on-record saying they’d “look into” what has been happening for a number of years now, it seems unlikely the livestreaming giants will take any action.
In June, Chipotle confirmed it would remove ads from the “slots” and “poker” categories in response to an online petition, though no other meaningful change has unfolded in this ongoing chapter.
🗞 In the news
Overwatch 2 will remove paid loot boxes this month.
ESIC asks that Valve reconsider its recent Counter-Strike: Global Offensive sanctions.
James McMath has joined Midnite as its head of communications, leaving Luckbox after five years.
📈 By the numbers
Mobile Legends: Bang Bang tops the most viewed esports events of this year with peak viewership of 2.84M.
Washington D.C.’s sports betting handle declined 29.3% year-on-year in June.
Endeavor has agreed to sell 10 minor league baseball teams to Silver Lake for $280M.
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