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The tech behind NJ’s skill-based esports wagering event
Sharpr is a weekly newsletter covering the intersection of esports and betting
Hi everyone, Cody here.
Today’s issue features commentary from the virtual architects of LANDuel, the technology that powered Esports Entertainment Group’s peer-to-peer esports betting event at the Hard Rock AC last weekend and what the software might be able to do for land-based operators.
Also, this year’s March Madness is expected to see more than $3 billion wagered. Of that is the $10 I lost betting on Kentucky. Sigh
On the flip side, the esports betting sector has been keeping up its hot streak—let’s dive right in 🔥
In this week’s edition of Sharpr…
The tech behind NJ’s first skill-based esports wagering event
Riot Games signs two-year exclusive VALORANT data rights deal
ICE365, Abios publishes esports trends report
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LANDuel: The tech behind NJ’s first skill-based esports wagering event
New Jersey gamers converged on the Hard Rock Hotel & Casino in Atlantic City this past weekend for Esports Entertainment Group’s skill-based esports wagering event, a first of its kind activation in the U.S.
The two-day tournament allowed players to legally place bets on themselves to win 1-vs-1 matches of Madden NFL 21 against their opponents. Each player was given a complimentary $25 credit to stake on themselves while competing in a larger bracketed tournament headlined by a $9,000 prize pool.
Powering the weekend’s activities was LANDuel: a proprietary wagering technology that facilitates peer-to-peer betting on video games.
The company says LANDuel combines matchmaking, integrity tools, referees, and its own cashier ecosystem into one program to enable a safe, peer-to-peer betting experience for consumers.
Players can set an amount they’d like to wager and are automatically pitted against similarly skilled players.
The software utilizes a rake-based model (priced at 10%) to generate revenue.
LANDuel is a NJ Division of Gaming Enforcement-approved platform and is said to have “sophisticated” integrity measures in place, such as game recordings and hardware checks.
EEG VP of Data Science & Analytics William Collis tells Sharpr that LANDuel is “very simple from a consumer perspective” and that is a large piece of the program’s overall appeal. According to event data from EEG, 53% of matches played during the event were wagered on.
Collis likened the currency model in LANDuel to poker chips, adding that a user deposits money on the platform and is then “basically cashing in and cashing out in cages” as you normally would in a casino environment. For this pilot event at the Hard Rock, the NJDGE imposed a $25 bet limit on wagers, but noted LANDuel would offer higher limits in the future.
New Jersey regulators have authorized EEG to operate LANDuel in casinos throughout the Atlantic City-area, according to company representatives, but may find complications expanding beyond independent environments where all players are competing from the same space. As Paul Gavin, head of data science & analytics at EEG explains, it’s less of a technical limitation and more of a regulatory and integrity measure.
“Genuinely, we do want good integrity procedures,” Gavin said. “Part of that is that people are playing on the exact same gaming PCs, they have the same internet connection, network stability. None of those things are guaranteed when you play online.”
Latency (game delay) is a common barrier in the esports industry, and a concern worth acknowledging here–especially in this live wagering environment. Gavin says that LANDuel will accommodate cross-site and cross-state play in the future, but it’s not something the company is ready to deploy yet.
In a video interview with Atlantic City press, Hard Rock AC President Joe Lupo said of the event: “This is a really good test mode for us to see how [esports] performs, how many people come in, how they play in casinos, what [demographic] it drives.”
The Hard Rock AC declined to comment on the event.
The company says LANDuel will expand beyond Madden NFL 21 to host skill-based wagering events for other single player sports games such as NHL 21, NBA 2K21, FIFA 21, and fighting games. Collis suggested that there is another LANDuel event happening in the near future but did not share further details on where it would be hosted.
🦈 Sharpr Take: Esports and gaming are becoming increasingly important to stakeholders from a variety of industries wanting to engage the next generation of consumers, and casinos are high on that list.
All things considered, LANDuel seems like an interesting installation for courting younger demographics onto casino floors. EEG estimates that 71% of event attendees wagered at Hard Rock’s casino. While Collis declined to share specifics on Hard Rock’s cut of the LANDuel activation or how its partnership is structured, he tells Sharpr that “there’s an economic opportunity for our partners as well as customer-based opportunities.”
EEG did not disclose specific financial information on the event’s performance. A source says the total amount wagered over the two-day event was less than $2,000. A nominal figure for daily profits from any casino, but still very much successful in bringing in a younger audience and activating them within casino walls.
Generally, it’s becoming more evident that esports betting, at this stage, is more of a powerful customer acquisition tool than a revenue driver. For industry backers, that might be enough to keep wind in the sails as traditional stakeholders and operators look to incorporate esports offerings until the point in which the handle can sustain itself with revenue.
One other piece worth noting as LANDuel plans to expand throughout the country and host more events is video game makers’ temperature to skill-based betting. Outside of Counter-Strike: Global Offensive and Dota 2 developer Valve, most game publishers want little to do with betting on its titles and are not often, if ever, seen commenting on happenings in this sector.
Game publisher approval is not explicitly required to host events such as EEG’s in Atlantic City, but it’s worthwhile to have as publishers can strip the rights away from operators using its IP without permission. Collis did not confirm whether or not EA gave explicit approval to carry out the event, and instead said “we were very careful to execute this event in the most safe and secure way we could. We were very confident when we executed it that we did it the right way.”
Riot Games signs two-year VALORANT data rights partnership with GRID
Riot Games has signed an exclusive, two-year partnership to bring data from its first-person shooter title VALORANT onto GRID Esports’ data platform.
The partnership intends to leverage official data from VALORANT to “create innovative experiences, drive fan engagement, and empower interactive broadcast solutions,” according to GRID.
GRID will command distribution of all official VALORANT esports data across global and regional tournaments.
Specific data sets include in-game statistics for players, teams, and matchups that will be available in the coming months on GRID’s platform.
VALORANT boasts an active player base of more than 15 million monthly players.
GRID was founded in 2018 as a Berlin-based startup and has made a name for itself leveraging official data obtained from game publisher and event organizer partnerships. The data platform also holds partnerships with the likes of WePlay Esports, PUBG Studios, BLAST Premier, PGL, Allied Esports, and more.
Riot’s partnership with GRID isn’t its first data-driven agreement; in 2019, the publisher signed away the exclusive data distribution rights of League of Legends esports to Bayes Esports. In November, Riot renewed its contract with Bayes through 2024.
ICE365, Abios publishes report on esports trends in 2022
ICE365, in partnership with Abios, has published its second esports report, titled ‘Esports trends in 2022 and beyond.’ The 20-page report lays out the key opportunities and threats for the esports betting sector throughout the coming years.
Key topics from the report include:
The importance of cybersecurity
Gaming addiction and responsible gambling
The rise of mobile esports betting
Unsurprisingly, an entire column is dedicated to the need for education in the space, both for operators and game publishers alike. Author Felix Ng explains that those unfamiliar with the space often view esports as a singular, homogeneous thing, while in reality, the differences between Counter-Strike and League of Legends are akin to that of hockey and football.
Additionally, the report suggests that the nuance of esports is proving difficult for traditional operators that are not acutely educated on competitive gaming to manage.
“Traditional sportsbooks trying to enter the space will find that between new esports titles being introduced, tournament and match rules that can differ according to the organizer, and sporadic game-balancing changes by developers, it is extremely difficult to keep up to speed, unless they live and breathe esports,” the report reads.
“At the same time, game developers and tournament organizers are still largely unaware of the needs of the sports betting world...all of which can make it challenging for traders and esports punters to be involved in esports betting.”
🗞 In the news
Rivalry has announced a comprehensive mobile esports betting offering for its sportsbook, including titles such as League of Legends Wild Rift, Call of Duty Mobile, PUBG Mobile, and more.
The NBA 2K League has announced a 65% increase in prize money to $2.5 million for its fifth season—the largest amount in its history.
Esports data and odds provider PandaScore has secured a partnership agreement with sports data supplier Sporting Solutions.
📈 By the numbers
A third (32%) of consumers between the ages of 13-39 would rather watch an esports competition than a traditional sports match.
Collegiate betting restrictions are declining with 43% of states proposing legalization in 2022, according to research from Eilers & Krejcik Gaming.
Approximately 45 million Americans plan to wager $3.1 billion on this year’s March Madness tournament, according to a report by the American Gaming Association.