Where there’s competition to be had, there’s money to be made. With sports betting one of the most lucrative markets in the world, it’s no surprise that the esports betting market is quickly gaining steam.
The reality of the growing esports market has long been established, but one thing that eludes companies and investors is getting a slice of the professional team circuit. Esports leagues draw in thousands upon millions of viewers on a consistent basis, which has led to multi-million-dollar tournament winnings being doled out
on a regular basis.
One of the difficulties of the esports market was capitalizing on that viewership. Game companies drove up interest in their games as esports and drove further consumer engagement and purchases, and event sponsors got some exposure to a juicy market that actively spends its disposable income, but much of the industry remained outside of the equation.
Naturally, some of the market revenue goes to professional teams that either win tournaments or build profitable brands. Companies that own pro esports franchises, like the publicly-traded
Enthusiast Gaming Holdings Inc. (
TSX:EGLX) and the pre-RTO financing
ESE Entertainment Inc., are able to capitalize here.
But some companies have quickly figured out that regular matches with passionate fans means a betting market waiting to be tapped. Though esports betting isn’t
new, earlier websites were less trustworthy and uncontested and the
field is quickly growing, especially in China and the UK. By the estimates of gaming research firm Eilers & Krejcik Gaming, the global esports gambling market
will reach US $13 billion this year. Unsurprisingly, sports betting companies have quickly started moving to enter the esports wagering field with their established systems and professionalism. That includes the two largest companies by market share,
FanDuel Group of
Flutter Entertainment (
OTC:PDYPY) and rival private company
DraftKings, as well as “smaller” companies like
The Betway Group.
And investors are putting their money behind esports gambling as well. The UK-based esports betting startup
Midnite just raised USD $2.5 million in a
recent round of funding, and
Esports Entertainment Group Inc. (
OTC:GMBL) has been bringing in
esports organizations and
former game company execs into the fold.
The key to this massive market, however, lies in the amount of room it has to grow. The earlier estimate accounts for the fact that the US market is still in its infancy, since there’s no oversight governing body for esports betting and
many states don’t allow esports wagering. One
exception is New Jersey, just as it does for
sports betting apps like
Score Media & Gaming Inc. (
TSX-V:SCR).
But the rise of the US sports betting market since the Supreme Court
struck down a prohibition on the practice is starting to trickle into esports, and experts in the field expect the new norm will hold up for the new field. Companies are watching and entering the esports gambling field with great interest, so naturally, investors should do the same.
