Investments by both online bookmakers and land-based casinos in esports-based products are increasingly evident as both attempt to grab a greater share of wallet from a younger demographics.
The Macquarie team cites the development of esports offerings by major European-based operators such as William Hill and Paddy Power as one of eight emerging themes in esports. The report notes that William Hill in Nevada recently introduced esports betting as part of its offering.
However, the report makes Las Vegas giants MGM Resorts International and Caesars Entertainment the top picks, suggesting casino operators are moving into esports to “better engage with the younger crowd, expand their entertainment venue and hedge against the decline in the baby boomers.”
Stepping up a level at MGM
Just before the Christmas break, esports-only betting operator Unikrn announced it had agreed a partnership with MGM to co-host competitive esports tournaments at the LEVEL UP lounge at the MGM Grand on the Las Vegas Strip. Bi-weekly competitions will begin early in the new year.
The Macquarie analysts suggest parallels should be drawn with the way betting has helped traditional sports connect with their audiences.
“Esports betting is an overlooked but nonetheless an important area in the broader esports industry because we believe that esports betting is a critical tool for esports engagement just as much as sports-betting is to sports,” they write.
The report goes on the cite the success of Pinnacle in the past 12 months in both promoting and profiting from increased interest in esports betting.
“Pinnacle Sports is one of the earlier movers in this space, having generated 8 million betting counts since 2010 with more than 3 million generated in 2017 alone.”
A SCOTUS opportunity
Macquarie also considers that the current US Supreme Court case with regards to New Jersey sports betting might have some benefit.
“With the US potentially overturning the ban on sports-betting, we could see esports betting accelerate and drive more mainstream engagement in esports that will ultimately benefit the bookmakers and the land-based operators that offer some of the widely wagered titles such as Dota2, Counter Strike, League of Legends and Overwatch.”
It should be noted that the Macquarie analysts claimed much the same forward momentum in a note in January 2017 when they again cited Pinnacle’s esports claims and suggested that Tabcorp would be among those that might expand their offerings in this area.
One year on, Tabcorp’s position with regard to esports is more complicated following the shuttering of the Luxbet arm. It was through Luxbet that Tabcorp extended its relationship with Unikrn, in which the company is a shareholder.
The closure of the Luxbet business has brought to an end Unikrn’s licensed Australian business, although Unikrn said in a blog published before Christmas it will continue to operate under its joint Isle of Man license.
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Split imperatives in sports
Others involved in esports betting might also question from where the acceleration in esports is going to come.
Back in October, Esports Betting Report reported that the amounts being bet on esports mainstream bookmaking sites remained very small in comparison with betting on traditional sports. William Hill it saw turnover of about £1.3 million a year on esports, the equivalent to the amount taken on a non-Wimbledon tennis major.
There might be other complications for the esports betting sector from some of the other predictions put forward by Macquarie. The potential for esports to become more important to the publishers would likely see more focus placed on the issues raised by unofficial skin betting.
The Macquarie team points to Tencent’s recent decision to fully acquire Riot Games, the publisher of popular esports title League of Legends.
“We think leveraging esports could become prevalent among all major game publishers as they look to drive engagement and awareness,” they wrote. “Notably, Tencent has been aggressively ramping up on its League of Legends eSports league via franchising in China and North America.”
Another potential point of conflict could arise should esports gain acceptance as an Olympic sport. The Macquarie team suggests this could happen within the next decade.
However, the Olympic movement has a problematic position with regard to betting activity on its events. A booming esports betting sector might cause issues when it comes to Olympic recognition, even more so should more instances of match-fixing come to light in the months and years ahead.
Similarly challenging would be deeper links with mainstream media. Says Macquarie:
“Esports media rights currently have little value relative to the billions of dollars in media rights held by conventional sports leagues and teams. We think this will eventually change as esports leagues undergo consolidation and as they increase their negotiating power with broadcasters.”
Again, any issues around match-fixing, integrity and gambling would harm the case for mainstream media involvement.