Hi everyone, Cody here.

It’s still early in the new year but we’re already seeing some significant developments occurring in the esports betting space. Namely, Nevada is closing in on regulatory amendments to permit esports betting that are one vote away from kicking off in the state next week. Now that’s spicy.

If you fancy some drama, we’ve got that too. The former CEO of an embattled betting company is suing for wrongful termination in a legal challenge seeking over $3M in compensation.

Let’s dig in.

In this week’s edition of Sharpr…

Nevada esports betting could kickoff on January 26.
Former Esports Entertainment Group CEO files wrongful termination lawsuit against company.
Bayes Esports inks data partnership with BLAST Premier.

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Nevada esports betting could kickoff on January 26

The Nevada Gaming Control Board recommended the approval of a regulatory framework which could support esports betting as early as next week.

The NGCB approved a set of amendments to Regulation 22, the state’s guidelines for sports betting, in a 2-0 vote.
The regulation would take effect immediately if approved by the Nevada Gaming Commission during its next meeting on Jan. 26.

The regulatory framework is the first industry-moving development from the Esports Technical Advisory Committee since it was formed by the NGCB in 2021. While other states have incorporated esports into its legal sports betting legislation, Nevada’s amendments are the most approachable by a stretch.

This includes a whitelist of pre-approved esports events that operators can offer without the need for special approval from the NGCB (a requirement of the current framework).
Sportsbooks will be required to monitor for potential betting irregularities when offering esports matches and notify regulators.
The NGCB will also have the ability to bar operators from accepting wagers on esports matches should it deem an event unsafe.

NGCB board member Phil Katsaros noted that the organization’s esports committee was a catalyst in seeing the regulations transpire, and painted this move as a very forward-looking development for Nevada.

“It’s something that’s somewhat unique for us putting together a committee and formulating regulations,” said Katsaros. “I think it’s a good approach and something we can draw upon from our experience in the future.

“What we’re doing here is enacting what I think are responsible and sensible regulations,” he said. “Imagine what Nevada would have looked like if we never availed ourselves to sports betting years ago and only availed ourselves of it in 2018. We would have been flat-footed, a state of 40-plus million visitors a year which would have drawn a lot of focus from other participants in the space. We would have lost all those potential years of experience as well. So I like that we’re not being flat-footed here.”

Senior Deputy Attorney General John Michela added that regulators would monitor the amount of wagering generated by esports and assess whether there would be a need to evolve the guidelines in the spirit of either making it more accessible, or in the name of competitive integrity. This includes formulating rules around the age of competitors (in esports they skew younger, in many cases under 21-years old) and potential performance-enhancing drugs.

🦈 Sharpr Take: It’s early in 2023 and we’re closing in on what could be one of the biggest esports betting developments in the United States.

Unlike other U.S. sports betting regulations that permit esports, Nevada is taking a very open and unrestrictive approach that will afford operators the chance to size up the market opportunity. And even better that this groundbreaking trial is happening in the nation’s gambling capital.

In other states like New Jersey, regulations allowed esports betting to take place, but it was severely limited. Additional restrictions placed on esports ultimately handicapped how much the category could take in, making it a far less savory endeavor for both operators and consumers.

With the current proposed framework set to take shape in Nevada, both operators and regulators will finally get their first taste of what esports can do over an indefinite period. Again, past opportunities across the country have seen betting on random, one-off esports events or tight limitations such as a $100 bet limit.

I wouldn’t expect esports to explode onto the Nevada sports betting scene immediately, but it will be interesting to see how this offering evolves over time, both in the sense of which operators decide to dig into the market and how it performs in Sin City.

Given the comments above that say regulators will monitor betting handles generated from esports, we should be able to get a better sense of the picture, too.

But again, all of this is contingent upon earning the Nevada Gaming Commission’s vote next week. We’ll be sure to update you as this story develops.

Former Esports Entertainment Group CEO files wrongful termination lawsuit against company

Former Esports Entertainment Group CEO Grant Johnson has filed a wrongful termination lawsuit against the company.

Johnson claims his December 3 dismissal was a breach of his employment agreement, using “contrived reasons” to generate cause.
Filed in the New York District Court, the lawsuit seeks over $3M in damages, including both cash-based compensation and company shares.

The company’s “for cause” conditions consist of fraud, wilful misconduct, and/or gross negligence. Johnson vehemently denied the allegations made against him, and says that even if true, would not meet the cause requirements as they don’t show “demonstrable and serious injury to the company.”

While investors may beg to differ, EEG’s board of directors unanimously agreed on April 18, 2022 that an investigation into Johnson based on the same allegations was not necessary. Johnson’s employment agreement could only be terminated for cause at the end of the term on Jan. 31, 2025–his lawsuit is seeking damages that would represent compensation seen throughout the full term.

It’s been a turbulent year in many respects for EEG, shuffling its business strategy more times than once (including the sudden fire sale of its esports assets), shuttering esports betting platform Vie after a short-lived stint operating in New Jersey, and watching is stock price crumble from an all-time high in March 2021 of $17.40 to its current share price of $0.07.

EEG has since hired Alex Igelman to permanently take over the chief executive role at the company.

Bayes Esports inks data partnership with BLAST

Esports event organizer BLAST has inked a data partnership with Bayes Esports set to run through 2024.

The two-year deal will supply live data from BLAST Premier’s slate of Counter-Strike: Global Offensive events across Bayes Esports partnership network.
BLAST is the latest company to engage in an exclusive data deal with Bayes, joining the likes of Riot Games’ League of Legends and event organizer ESL.
Bayes operator partners include bet365 and GGBet, as well as suppliers BETER and Sportsflare.

The pair is also planning to create a data-driven tool that supports automated content creation called “Project V.”

Alexander Lewin, VP of distribution and programming at BLAST, commented on the agreement in a release, saying: “The data analysis, statistics and insight which Bayes is bringing to their global client base will be a tremendous value-add for fans of BLAST and esports worldwide.”

Counter-Strike was the second-most bet-on esport globally in 2022, according to internal data from Rivalry. Inking an exclusive data deal with BLAST—one of the more prominent CS:GO organizers—is a solid win from Bayes to capture a key piece of the esports market.

🗞 In the news

Rivalry has released a 2023 business update, outlining its strategy and path to profitability.
LVP SuperLiga, the top Spanish League of Legends esports league, has named Esports Data as its official data partner.
Bayes Esports has appointed York Scheunemann as its chief operating officer.
Oddin has unveiled a partnership with SportPesa.

📈 By the numbers

Mobile Legends: Bang Bang 4 World Championship saw 4.2M peak concurrent viewers, according to Esports Charts.
YouTube topped the list of most popular streaming platforms with over 8.1B hours of watched content in Q4 2022, while Twitch’s viewership decreased 6.32%.
Rainbow Six: Siege is the fifth most bet-on esport in Australia, according to data from PandaScore.

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Nevada esports betting could kickoff on Jan…