Luckbox prioritizes user acquisition following minimal FY 2021 revenue results
Sharpr is a weekly newsletter covering the intersection of esports and betting
Hi everyone and happy Cinco de Mayo 🍻
This week we take another dive into financial performance reports from the sector – this time with results from TSXV-listed esports betting operator Luckbox.
Let’s jump right into this week’s key stories and try to stay hydrated.
In this week’s edition of Sharpr…
Luckbox prioritizes user acquisition following minimal FY 2021 revenue results.
Former Caesars executive joins Esports Entertainment Group board.
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Luckbox prioritizes user acquisition following minimal FY 2021 revenue results
Real Luck Group, the parent company of esports betting platform Luckbox, has shared its FY 2021 financial results and strategic priorities for the year at hand.
The company reported a net loss of $6.76M for the fiscal year.
Revenue was minimal, equating to $19,787 – down 66.6% from the previous year.
Operating expenses increased by 62.1% to $6.6M, including $1.5M in share-based compensation.
As of Dec. 31, 2021, Luckbox’s cash balance was $11.3 million.
Luckbox CEO Thomas Rosander explained that the company had placed considerable energy behind enhancing its sportsbook product and overall infrastructure. He added that Luckbox’s work in FY 2021 was aimed at “optimizing marketing spend and player value,” and that the company’s balance sheet puts them in a “strong position” to carry out its player acquisition efforts in 2022.
Apart from improvements to its sportsbook–which included the addition of traditional sports wagering to complement its core esports offering–Luckbox entered into new affiliate partnerships, verticals, and added senior members to its team to brighten the company’s outlook this year.
Luckbox signed agreements with several key affiliate marketing networks to increase player traffic, as well as a partnership with marketing firm Raketech Group.
The company partnered with Microgaming to add more than 100 games to its casino offering.
Lottoland Group executive Benn Timbury was named COO, and Bo Wänghammar– formerly of PokerStars and Mr Green–joined Real Luck Group’s board of directors.
Luckbox submitted an application to the Alcohol and Gaming Commission of Ontario to become a licensed operator (the status of which is still pending), and expects to enter additional regulated markets in 2022.
🦈 Sharpr Take: Luckbox’s financial results leave mixed feelings. The company increased its operating costs significantly in FY 2021 but doesn’t seem to have much to show for it, as far as we can tell.
With $741K in advertising and marketing costs and just 19K in revenue, Luckbox will need to prioritize its player acquisition strategy and be precise in its approach. Based on the affiliate marketing activity the over last several months and Rosander’s commentary in the release, user acquisition is already top of mind for the company.
On a positive note, Luckbox’s affiliate and casino tailwinds are still fairly new developments in the company, leaving a reliable amount of room for growth in these areas. The esports operator also has a strong balance sheet to work with, which Rosander says is managed “prudently.”
Luckbox’s next financial report will be telling of the success of its efforts to drive new players and increase betting volume.
(Note: figures converted from CAD to USD based on the conversation rate as of May 5)
Former Caesars executive joins Esports Entertainment Group board
Esports Entertainment Group has appointed Jan Jones Blackhurst to the company’s board of directors.
Jones Blackhurst brings more than two decades of gambling industry experience to EEG, having previously served as executive vice president for government relations & corporate responsibility at Caesars Entertainment from 1999 to 2019. She has also sat on Caesars’ board of directors since transitioning from her EVP role at the company.
The newest board member arrives at a crucial time for EEG, which received a deficiency notification letter from the Nasdaq on April 13 after a February earnings call sent its share price into a free fall.
GMBL shares reached an all-time high of $17.40 in March 2021, but have since slid 97% to below $0.60.
The company recorded a net loss of $34.5M in Q2 2022, compared to a net loss of $7.3M year-over-year.
EEG now has until Oct. 8 to raise its share price to $1.00 or above for a minimum of 10 consecutive business days, or risk being delisted from the exchange.
As of January, the company is licensed to operate in New Jersey, allowing state residents to wager on esports events through its online sportsbook VIE.gg. EEG recently completed its “soft play” phase as mandated by the Division of Gaming Enforcement, allowing the operator to deploy its betting platform fully in the Garden State.
🗞 In the news
GRID has named Dominika Maria Szot as its head of communications.
Ari Fox, co-founder and executive producer of Casino Esports Conference, tells Yogonet casinos' user acquisition strategy needs to connect to a community.
California voters will decide on the future of sports betting in November.
📈 By the numbers
Eilers & Krejcik Gaming forecasts that U.S. online gambling GGR will reach $24.1B by 2026.
Flutter Entertainment generated $1.6B in revenue in Q1 2022.
Caesars Digital recorded revenue losses of $53M and EBITDA losses of $554M.