Esports Entertainment Group ceases operations of Vie.gg
Sharpr is a weekly newsletter covering the intersection of esports and betting
Hi everyone, Cody here.
I never found myself saying this so often while reporting on the sector early on in my career, but it’s been one hell of a week in the world of esports betting.
Esports Entertainment Group will once again headline the issue as the company revealed it will cease operations of its esports-dedicated sportsbook Vie.gg next week. In the news section there are plenty of more great developments from this week that would have otherwise found airtime in the featured section, such as Verizon’s partnership with World Fantasy Champion and Allied Esports’ CEO stepping down from his role.
It’s a dense issue this week, better take this with you 🗡️ 🧙♂️
In this week’s edition of Sharpr…
Esports Entertainment Group ceases operations of Vie.gg
Nevada esports betting proposal picking up steam
NBA 2K League bans six players, coach for gambling and fantasy offenses
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Esports Entertainment Group ceases operations of Vie.gg
Esports Entertainment Group is closing down its esports-dedicated sportsbook Vie, the company wrote in an email notifying users on October 25.
“We have made the difficult decision to close Vie.gg,” the email read. “The site will remain open until November 1, 2022. Until then, you will be able to log in to close your account.”
Any remaining balances after the site closure will be returned to customers by physical check.
EEG initially received regulatory approval from the New Jersey Division of Gaming Enforcement less than a year ago in January and launched Vie the following week through a commercial relationship with Bally’s Atlantic City Hotel & Casino. That sports betting skin cost EEG “seven figures a year,” CEO Grant Johnson told NJ Gambling Sites in an interview earlier this week, and that the juice ultimately wasn’t worth the squeeze.
“Esports was categorized [the] same as sports. So the skin [costs] seven figures a year, which is waay [sic] too much for esports in its current stage as an evolving vertical,” Johnson said.
“Had the market not turned so radically, we had anticipated raising capital and then adding a sportsbook. But by the time we were approved, clearly, the world had changed.
“We are restructuring to last through to more stable markets. [And] at this time NJ, Spain, and the UK are all jurisdictions that we don’t have the required capital to stay active in. So we are reducing our burn and putting some cash back in the bank.”
Johnson estimated the esports betting platform would take in $1-$2 million in revenue in New Jersey in its first year. That forecast turned out to be grossly overestimated as the company wrestled to break four figures in revenue in any given month. Vie’s last reported financial results in August outlined just $590 in revenue – which was still an improvement from previous months of single and double digit recordings.
“These are stressful times and companies need to make difficult decisions. This falls into the difficult but necessary category,” Johnson said.
Times are indeed tough for EEG, which has seen its stock drop 98% in the last year amid continued quarterly losses. In May, the company said it would begin “aggressively” cutting costs in an effort to reach profitability, including selling off its esports assets: Helix eSports, ggCircuit, and Esports Gaming League. At the time, EEG’s failure to acknowledge Vie as part of that conversation was questionable, though the reasoning there seems to be unfolding now.
🦈 Sharpr Take: While the downfall of Vie was swift and painful, it shouldn’t tarnish what esports betting could be in the United States.
Vie was a misguided project from the start: launching guns blazing stateside where esports betting is sorely underdeveloped and unacknowledged comparatively to other European markets.
From the outside, it felt like Vie was launched in New Jersey without any real overarching strategy on how to market to, acquire, and retain customers, nor did it have any substantial pull among its target consumers besides having “esports” in the company name.
These factors are important in the context of the greater sports betting industry. Emerging operators such as Fanatics are drawing from large pre-existing databases of customers while Betr hinges on the fanbase and reach of internet influencers like Jake Paul. EEG and Vie on the other hand had very little to point to when push came to shove.
Despite lofty betting handles and state revenues, sports betting is still an early development in the US. Esports will play a role in this market (as it has successfully been demonstrated to do so for international operators Pinnacle, Betway, Rivalry, and more), but it may not be right now.
What we do know is that this segment can generate meaningful revenue and engagement with the right ingredients, but it requires an appropriate marketing strategy, understanding of the gaming audience, and a community it can lean into.
Nevada esports betting proposal picking up steam
Nevada’s Esports Technical Advisory Committee has unanimously approved a regulatory esports betting proposal for the Nevada Gaming Control Board and Nevada Gaming Commission.
The eight-member committee comprising executives across the esports and gambling industries recommended amendments to Regulation 22, the regulation governing race books and sports pools.
The amendment would allow sportsbooks to accept wagers on esports matches without the need for special approval from the NGCB, a requirement of the current framework.
Proposed regulations would provide the board chair authority to step in and prohibit operators from accepting wagers on esports events should an issue develop.
One responsibility of the committee will be to develop a whitelist of sanctioned event operators and tournaments in collaboration with the board. This catalog will provide a smoother approval process for esports wagering, as well as likely give regulators some peace of mind.
The board and commission are expected to consider the proposed amendments at future meetings, possibly as early as November.
NBA 2K League bans six players, coach for gambling and fantasy violations
The NBA 2K League has “indefinitely” disqualified several players and one coach for violating the league’s gambling and fantasy rules, the league revealed in an official statement.
Five players were found guilty of wagering or attempted to wager on official 2K League matches following an investigation.
The implicated players involved included Blazer5 Gaming’s Christopher Lafanette, Dorian Earl Miller, and Robert Nastasi, as well as Kimanni Ingram and Zekirri Dennis, of Jazz Gaming and Mavs Gaming respectively.
Blazer5 player Marquis Gill and coach Andrew Maxie are also banned for failing to report the violations to the league or cooperating fully with the investigation.
The league’s investigation also found that all seven individuals involved failed to fully cooperate with the investigation, which may have contributed to the severity of the penalties.
NBA 2K League President Brendan Donohue stated that “we take our obligation to the competition and to our fans incredibly seriously, and we will always act forcefully regarding violations of the rules governing game integrity and the related reporting and cooperation requirements.”
🗞 In the news
World Champion Fantasy has partnered with Verizon for its fantasy esports product.
Oddin has secured an Ontario license to become an official esports betting supplier.
Bayes Esports expands into the United States with New Jersey and Colorado licenses.
Jud Hannigan has stepped down from his role as Allied Esports CEO.
Rivalry partners with Low6 to launch esports Pick’em game.
📈 By the numbers
A Stake livestreamer has claimed to have made $360M in endorsements from the operator in 16 months.
Viewership from the League of Legends World Championship Group Stage dropped nearly 40% from the previous year.
Online casino GGR in the US from September 2021-2022 reached $5 billion, per research from Eilers & Krejcik.