Gambling industry’s bid for creators heats up as Kick signs Nickmercs
Gambling industry’s bid for creators heats up as Kick signs Nickmercs
Sharpr is a weekly newsletter covering the intersection of esports, betting, and Gen Z
Hey everyone, Cody here.
This week we’re looking at the intersection of gaming creators and gambling on the heels of Kick’s $10M deal with influencer Nickmercs.
Offshore sites have demonstrated the value in livestreaming as an acquisition and engagement channel, and regulated brands are starting to dip their toes in the water. Is this the next area of expansion in online betting?
Let’s dig and find out.
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Gambling industry’s bid for creators heats up as Kick signs Nickmercs
Top gaming influencer Nick “Nickmercs” Kolcheff has signed a deal with Kick, the livestreaming platform backed by cryptocurrency operator Stake.
The 28-year old streamer has nearly 7M followers on Twitch and is among the highest-paid gamers in the world, also named one of Forbes’ top internet creators.
The one-year, non-exclusive deal with Kick is reportedly worth $10M.
Kolcheff confirmed that he’ll stream gambling content as part of his contract, adding that he’ll even travel outside of the US to do so legally.
Kolcheff is the latest A-list gaming influencer to join Kick’s roster of creators, following in the footsteps of Kaitlyn “Amouranth” Siragusa and Félix “xQc” Lengyel, the latter signing a contract worth $100M in June.
Stake co-founder Ed Craven launched Kick in December 2022 after Twitch banned the operator–and several other black market gambling sites–from the platform.
Twitch had taken another bite out of unregulated gambling earlier this year, banning two additional sites (Blaze and Gamdom) as well as the promotion of skin gambling. The result of these efforts has seen gambling viewership on the platform drop by approximately 75% since its policy update last year.
Kick on the other hand recorded nearly 200M hours of watched content on English-speaking channels in Q3, growing its total watch time by 52.6% from the prior quarter.
🔎 Between the lines: The business model here seems fairly straight-forward: leverage Stake’s war chest to fund Kick’s top creators who can then funnel users onto the betting platform.
More importantly, the deal highlights the growing (and complicated) relationship between gambling, creators, and gaming.
The next generation of consumers aren’t reachable in traditional ways, and for the last handful of years, gaming has been the bridge that connects brands with this elusive audience. (See: Walmart in Roblox, Doritos in Fortnite, League of Legends-inspired Louis Vuitton apparel, and infinitely more examples).
Using internet and gaming creators to reach young consumers is a well-worn strategy, but it’s still mostly unexplored territory for the majority of regulated betting operators. That’s starting to shift however as more reputable companies begin activating in the space:
Underdog Fantasy named Kolcheff as an ambassador this past summer.
FanDuel has had a partnership with gaming creator Dr Disrespect since 2021.
PrizePicks inked a sponsorship deal with esports team TSM in September.
While some operators have been gently testing the waters, offshore casino sites have gone all-in to seize the opportunity. Sites like Stake, Duelbits, and Roobet have flooded serious amounts of capital into streaming talent, offering some influencers upwards of $2M a month to broadcast themselves gambling.
The biggest and obvious issue is that these sites often operate illicitly with little-to-no customer verification, while streamers (and their viewers) utilize a VPN to access offshore casinos from regions like the US.
The other morally questionable piece is how gambling content has typically been presented to users on livestreaming platforms.
The tentpole example often entails a high-profile influencer recklessly playing slot-style games with lofty balances, and, in some cases, very casually losing six-figures worth of (presumably) sponsored funds in a matter of minutes. This form of promotion sets a dangerous precedent, especially when the audience is more likely to consist of a “not-insignificant number of minors,” to use journalist Jacob Wolf’s words.
Stake was founded in 2017 and is now the seventh-largest gambling group in the world by revenue. Since exploding onto the livestreaming scene, Stake’s revenue leaped from $105M in 2020 to $2.6B last year.
I’m not condoning these marketing practices, but all signs point toward the impact of this strategy being materially successful, and the companies are interesting case studies as the intersection of gambling and creators continues to take flight.
That output likely changes a lot when a company is regulated, but it’s still clearly an opportunity to reach, acquire, and engage the next generation of bettors that will lead to more curiosity in this space and discovering how brands can find a middle ground of what’s acceptable and what’s not.
Creator partnerships will need to be laced up with responsible gaming messages from head-to-toe — sharing picks, placing single-digit wagers, and appearing in external advertisements from a regulated sportsbook is on-sides in my opinion.
But again, it needs to look a lot different than it has the last few years, and influencers broadcasting themselves winning or losing hundreds of thousands of dollars in a single session won’t be tolerated by the platforms or its viewers.
One positive effect from Twitch’s entanglement with offshore operators has been educating the gaming audience on the difference between black market and regulated operators.
There’s a better understanding within that community to delineate between “good” and “bad” — that’s good for protecting consumers, and in some ways, helps pave the way for licensed sportsbooks to activate through these channels and work closer with Twitch to find a responsible common ground.
🗞 In the news
Nevada sportsbooks can now accept esports wagers without additional approval – I shared more of my thoughts with Steve Ruddock.
BetMGM launched the Borgata Arcade in NJ, featuring casino games based on Street Fighter and Space Invaders.
ESPN Bet is set to make its debut on November 14 in 17 states.
📈 By the numbers
DraftKings revenue jumped 57% to $790M in the third quarter.
Penn Entertainment divestiture from Barstool left the company with a $724.8M net loss in Q3.
Clout Fantasy improved data accuracy by nearly 50% through its partnership with Bayes Esports.
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