OpTic Gaming signs LOI to partner on sports betting venture
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Hi everyone, and welcome to Sharpr.
Today we’re reporting on breaking news in the sector: OpTic Gaming, one of the most prominent North American esports organizations, is backing a new betting venture seeking to raise money as a founding partner. A successful fundraise would see OpTic create ongoing betting content and participate in the affiliate business.
Let’s jump right in.
OpTic Gaming signs LOI to partner on sports betting venture
Texas-based esports organization OpTic Gaming is part of a group searching for investors to fund a sportsbook and suite of betting products, Sharpr has learned.
OpTic has teamed up with RedZone Digital and former EBET executives Bart Barden and Jason Finch to execute the plan.
They are pitching a new company called “NextGen Wagering,” and looking to raise $7.5M USD through a seed convertible preferred stock A offering, with a closing date of April 30.
The proposed enterprise is being shopped around to potential investors and appears to have the backing of long-time OpTic and Envy Gaming backer Hersh Family Investments.
According to an investor presentation obtained by Sharpr, the business idea was formed from a meeting in October between Barden and OpTic CEO Hector Rodriguez. OpTic then signed a letter of intent to pursue the partnership with NextGen Wagering two months later in December.
The NextGen Wagering platform is positioned as a “one-stop-shop for fans to wager on the events that matter to them,” including a mixture of esports, traditional sports, influencer events, and more.
“NextGen Wagering will be partnering with OpTic Gaming to tap into younger audiences via social content,” reads the presentation. This includes producing both betting-focused content and “custom events” that can be wagered on.
The company’s product suite will consist of several different pillars, including:
A content wing led by OpTic and its creators that will serve as an acquisition and affiliate vehicle.
Prediction, skill-based, and daily fantasy products with free-to-play and real-money options.
A first-party sportsbook with its own tech stack, trading team, data, and odds feeds.
A whitelabel solution it plans to offer to other tier-one esports teams, streamers, and influencers, naming the likes of FaZe Clan, 100Thieves, and Dr Disrespect as potential partners.
According to the presentation, NextGen Wagering will use money from the raise to purchase the tech and assets from EBET’s now defunct esports vertical, which will be used to form the company’s owned esports betting products. The venture aims to launch its full product suite within 24 months of a successful fundraise.
The company projects through a combination of revenue streams from wagering, prediction, and affiliate marketing that it will generate a total of $71.3M over a five year period.
Over that five year period, the total cost of the operation is projected to be approximately $60.9M, which includes OpTic's marketing revenue share, personnel, platform development and technology, SG&A (selling, general, and administrative expenses), licensing, and gaming tax fees.
Across this five year period, the total projected EBITDA is 15%, or $10.4M (anything above 10% is considered good core corporate profitability). To achieve its financial goals, NextGen Wagering would need to reach approximately 200K monthly active users by 2027.
The company is relying on OpTic to execute and prove its strategy as the initial partner, likening its approach to Barstool Sports and Penn National Gaming, which leverages content to cost-effectively target, reach, and acquire younger sports bettors. The presentation claims OpTic Gaming’s 75M followers represent 12.5% of the total addressable market of esports viewers and fans.
NextGen Wagering will “focus on U.S. markets” during the launch of its skill-based product and later shift its attention toward international audiences after introducing its first-party betting platform. But as far as actual material licenses are concerned, it’s still a bit of an open-ended question.
It’s not entirely clear which jurisdiction they’ll opt to target, but it’s stated that a total of $1.625M of the $7.5M raise will be allocated toward licensing, among other asset purchases and software expenditures.
There are several points suggesting there is a desire to have a presence stateside, although it’s unclear if the enterprise will consider acquiring U.S. licenses for its sportsbook (its skill-based and prediction offerings will be able to operate in the majority of states without licensure).
With that being said, conditions in the U.S. are not ripe for an esports-focused betting platform (Esports Entertainment Group folded Vie.gg after just six months in New Jersey), and state-by-state licensing would make a domestic entry complicated and costly.
Curaçao-licensed operators have been quite pervasive in esports over the last several years and would represent a cheap and quick means to access a global audience of potential customers. EBET holds a Curaçao gaming license, if that’s any indication to go off of.
Sharpr reached out to Barden, Rodriguez, OpTic Gaming, and a representative from Hersh Family Investments on Monday afternoon but they did not respond to requests for comment.
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