In an exclusive interview with Yogonet, Esports Entertainment Group CEO Grant Johnson provides an update on plans to enter the New Jersey market and discusses what other states present an opportunity for the business. The executive also discusses the intersection between sports and esports betting, and how the company's product aims at bettors interested in both.
As a business with a presence in Latin America, Johnson also explains what role this region plays for its operations and how several recent acquisitions position EEG to deliver a unique product mix. Moreover, the executive reflects on the momentum esports is currently gaining and a prospective deal reached with the Indian Gaming Esports Association to promote video gaming in land-based venues.
Esports Entertainment has applied to enter the New Jersey market. Could you give us an update on how this process is moving along? What makes this an attractive state for the company, and how will EEG secure a presence within it?
The process has been longer than initially anticipated. However, three weeks ago we submitted our application for the Transactional Waiver which will allow us to start taking bets on esports events. Just last week the Governor signed into law that wagering on esports is now allowed under the DGE guidelines.
NJ is unique not only because as a state it is widely recognized as the most stringent state to attain a license, making future jurisdictions an easier process, but it also has a geographic advantage of being so close to NYC in the north and Philadelphia in the south.
When we go live we will be the first and only fully regulated esports betting site in North America, and we believe this will give us a significant advantage over our competitors.
What will the company's offering be like in New Jersey, and what expectations do you have for the VIE.bet sportsbook there? Which other states is EEG looking to expand to?
Vie.bet is our EU and Latin American-focused product. The site we will be launching in NJ will be Vie.GG, which is on our own technical platform. Being the first and only esports book combined with a geographically advantageous location puts us in a great position.
As for additional states, our CFO Dan Marks, and VP of IR and Strategy Jeff Cohen, presented to the Senate in Ohio this past spring. As a result of these efforts, esports has been added to the language of Ohio’s regulatory framework. We will most certainly be pursuing a license in Ohio after NJ; and concurrent to this Ontario, in Canada, is also a likely jurisdiction we will be looking to get a license in 2022.
EEG has cited data showing sports fans' willingness to engage in esports betting. Why would EEG's esports products be attractive to them, how do you plan to drive conversions and crossovers? What is the profile of the EEG customer, and how do their demands and behaviors differ from traditional sports bettors?
We have to keep in mind it's all about people wanting to be entertained: sports and gaming are just different forms of entertainment. There are a few different products in this mix and they are attractive for different reasons.
First off, we learned during the pandemic, when traditional sports were shut down, a significant number of traditional sports fans were interested/willing to bet on virtual sports that were the digital representations of the sports they followed. So in our partnership with the pro teams, there are tournaments by the teams for their fans who game on our EGL platform.
When we roll out LANdual early next calendar year we will be able to provide a skill-based PvP betting product in which sports team fans, as well as all the other 2.5 million gamers on our ggCircuit platform, will be able to play against each other for cash prizes.
EEG has reached several of these agreements with major league sports teams. What opportunities do they offer and what benefits have they reported to the company so far?
Yes, we have been working with professional sports teams to offer gaming tournaments to their fans. We now know that the vast majority of professional athletes are very active gamers, particularly within titles like Call of Duty, FIFA, NBA2K, Madden, etc.
We recently launched our Club Clash format, where the fans of each respective team can build up points to determine which team has the best gamers. This format has been well-received by the teams and we are seeing higher sign-up rates.
Our first event has not taken place yet. It will have by the time this article is published, and we are very encouraged. We believe we will be increasing our customer base by several thousand per week as we get all these events running. Once on our platform, we have at least 3-4 ways to monetize these players.
The company's VIE.bet brand became the official sponsor of Brazilian professional gaming organization SG esports in August. What opportunities does EEG see in the Latam market? Which other markets, worldwide, are a priority for the company?
The Latin American market is a high-growth market for us and we have increased our monthly revenue by several hundreds of thousands there in the past few months.
The three main priority markets for us are:
We plan to roll out our LANdual product throughout jurisdictions where we have a legal opinion that it's legal to do so. Currently, we have obtained 28 such opinions.
Esports Entertainment has completed a series of acquisitions this year, including Helix eSports and ggCircuit, which strengthen different business segments. How have these integrations impacted the company's operations so far? Is EEG seeking other expansion opportunities via acquisitions?
These esports assets now allow us to offer a full turn-key vertically integrated esports solution to casinos, traditional sports venues, big box stores and sports bars.
This is a unique product mix. We can bring in hardware, the software that runs the system, a gambling product, a PvP betting product, a crypto mining product, and the analytics software to make sure we are gathering all the data to ensure we constantly innovate our products to provide the players with new exciting gaming options.
In terms of additional acquisitions, at this time we are focused on integrating all our operations and gaining the efficiencies that come from cross-selling and scale. That doesn’t mean we are not going to keep our options open for unique opportunities should we identify one that augments our product mix.
The company also signed a partnership with the Indian Gaming Esports Association earlier this year to advance esports adoption in casinos. Does EEG see potential in the adoption of esports in land-based venues? It has been said videogamers are not interested in traditional gaming such as slots. Do you agree?
I will start with your last question. First yes: I agree gamers are not interested in traditional slots or any random number generator games. They prefer games of skill where they can compete against the game or each other.
As for IGEA, this is a very valuable relationship. There are over 450 gaming tribes in the USA and the tribal casinos are the best places to start building out this infrastructure. Again, coming back to our turn-key esports solution, it serves two purposes here.
The tribal casinos get to augment their product offering to include gaming and esports which is, on its own, a good business decision to attract that 21-35 year old demographic that they are not currently getting.
And as this infrastructure builds out, the tribes can form teams that can be based out of these casinos and play against other tribes. This will create an entirely new vertical and opportunity for tribal gamers and youth in general.
The company was a pioneer among esports betting businesses in listing on NASDAQ. How would you assess EEG's trading history so far and what benefits has it reported to the company? How do you assess the evolution of esports as a form of entertainment and gambling market?
Yes, we were the first online gambling company to list on a major US exchange when we went effective April 2020. This listing has enabled us to raise over $100M in the public markets and allowed us to grow quickly and acquire the assets we have.
As for the share price, we have experienced a wide swing. I believe this has been a combination of speculation and some frustration over the delays in attaining the NJ license. I am of the belief that as we continue to execute and show Q over Q growth that the share price will soon reflect what we have created.
The growth in the gaming and esports market has been massive and we will continue to see this. More colleges and high schools are adding esports into their intercollegiate and varsity programs, and this will improve the entire ecosystem of gaming. As for gambling on esports, we believe that 10-15 years from now the esports betting market will become as large as gambling on traditional sports.