Report: Riot Games exploring betting partnerships for Valorant
Sharpr is a weekly newsletter covering the intersection of esports and betting
Hi everyone, Cody here.
A big rumor began swirling yesterday that Riot Games, one of the world’s biggest esports publishers, would reportedly permit betting partnerships in one of its flagship esports leagues–a first for the company.
These stories are the reason I decided to start this newsletter, so I was excited to jump on the topic this morning with some analysis. A lot went down in the 12 hours between the report and Riot’s official statement, but there was a lot left unsaid about what this change could mean for an esports industry struggling to make ends meet.
Let’s dig in.
In this week’s edition of Sharpr…
Report: Riot Games exploring betting partnerships for Valorant.
Entain to expand esports portfolio with $13M Sportsflare acquisition.
Counter-Strike publisher Valve has banned more than 40 Dota 2 players for cheating and match-fixing.
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Report: Riot Games exploring betting partnerships for Valorant
Riot Games is reportedly exploring allowing betting brands to join its list of approved partners for teams in its Valorant esports ecosystem, according to claims from Turkish news outlet Esporkolik.
“According to information received from Esporkolik, Riot Games will allow teams to cooperate with betting brands in the near future, especially VALORANT,” the translated tweet reads.
Gambling sponsors (along with alcoholic products and cryptocurrency platforms) are currently prohibited in Valorant according to its official competitive rulebook.
The report arrives several weeks after Riot Games announced the 30 teams set to take part in its franchised league, the Valorant Champions Tour.
Riot Games provided an official statement to press Wednesday evening, dismissing rumors of a policy change.
“Riot remains committed to investing in opportunities that ensure the integrity of all our esports, enable great experiences for fans, and unlock revenue streams for our teams. While there has been no change in the current policy regarding approved team sponsor categories, we will continue to evaluate all opportunities that deliver safe, secure, and meaningful experiences that best support the growth of our esports ecosystem globally.”
Reporters from The Esports Advocate and Dot Esports spoke to several team owners regarding the matter. Some say they were unaware of a potential amendment to its existing sponsorship guidelines, while others claim they “were aware Riot is open to the policy change.”
Between the acknowledgement from teams and Riot’s official statement, I wouldn’t completely rule out a change like this in the future.
🦈 Sharpr Take: The timing of this news is serendipitous in some ways.
The esports industry is undergoing a significant course correction. Layoffs, restructurings, and profitability pressures are all on the menu.
Venture capital funding is all but dried up, and the so-called esports middle class is feeling the heat. Esports teams are of the most unprofitable arms in the industry, and organizations are quickly folding in the current macroeconomic environment.
Sports betting represents a clear untapped opportunity to unlock an additional and much-needed revenue stream for teams. Although, as is the case with Riot Games, rights holders oftentimes won’t allow it.
I spoke more to the impact responsible and regulated betting could have on esports in a story last month, but the TLDR here is:
It’s in the publishers best interest to help keep partnered teams afloat and thus competition and entertainment circulating around its IP.
Under the games-as-a-service model, long-term player engagement and satisfaction is the new benchmark for success in monetizing games through microtransactions – esports included.
Look no further than traditional sports in the U.S. to see how the advent of legalized sports betting has driven value for stakeholders across the ecosystem. Betting sponsorship revenue aside, it’s clear sports wagering drives substantial increases in viewership and engagement. And as previously mentioned above, that’s a significant piece of the video game value chain.
Whether Riot Games would acknowledge it or not, Valorant esports is already benefiting from the betting activity on its matches. The first-person shooter is one of the most popular games globally, and it's quickly becoming a leading betting segment too.
Online bookmaker Rivalry stated Valorant was the fourth most bet-on esport on its platform in 2022.* Esports data company Abios also reported similar findings recently.
Riot Games holds a commanding share of the esports market as the publisher of renowned IP including League of Legends, Wild Rift, Teamfight Tactics, and of course, Valorant. These games are global in popularity, with League of Legends alone drawing over 150M active monthly players in January.
Unlike other game publishers such as Valve and Activision Blizzard, whom both welcome betting partners for its sanctioned esports leagues across Counter-Strike: Global Offensive, Overwatch, and Call of Duty, Riot Games has never permitted gambling sponsorship.
The implications of an esports juggernaut like Riot Games making the change to do so would be massive. This could potentially open up the floodgates for other esports publishers to do so, either for the first time, or by integrating existing betting sponsorships, campaigns, and activations more deeply into leagues and broadcasts.
We’re quite deep into the hyperboles at this point, but if Riot were to activate this channel, the guidelines around it would need to be seriously buttoned up. It would be a cold day in hell before the developer of ESRB-rated Teen and 12+ games would allow black market operators like Stake, Roobet, and DuelBits to be a part of its esteemed esports leagues.
Entain to expand esports portfolio with $13M Sportsflare acquisition
Entain has agreed to purchase esports betting software developer Sportsflare from Tiidal Gaming, the company announced on Monday.
Contingent on Tiidal shareholder approval, Entain will purchase Sportsflare for a total of $13.25M.
Tiidal will hold a shareholder meeting on April 26, where directors, officers, and shareholders will vote on the transaction.
In connection with the deal, Tiidal has reached a loan agreement with Entain affiliate brand Ladbrokes Group Finance plc.
Sportsflare’s products include pre-match, in-play odds, and player proposition markets, as well as a recently launched flash bet offering. The company also holds a partnership with data provider Bayes Esports.
While it’s unclear exactly how Sportsflare will be leveraged within the Entain organization, the acquisition would deepen the company’s esports betting portfolio. Namely, this includes Unikrn, the sports betting platform Entain acquired for $60M in 2021 and relaunched more than a year later.
🗞 In the news
Parimatch has suspended its operations in Ukraine following nationwide sanctions, leaving several esports teams and creators behind.
The American Gaming Association released a tracker of commercial gaming revenue.
DraftKings CEO Jason Robins took part of his shareholder letter to LinkedIn this week
📈 By the numbers
Counter-Strike publisher Valve has banned more than 40 Dota 2 players for cheating and match-fixing.
Over 90% of Gen Z consumers engage with game content, according to Newzoo.
Approximately 68M Americans will bet on this year’s March Madness.
Contact us
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Reach me directly at luongomanagement@gmail.com 📩 or on Twitter 🐦
*Disclaimer: I am a full-time employee of Rivalry.
Great read
Great work Cody!