Video interview with the CEC/EIC speaker

Anthony Gaud: "We are trying to create a new way to wager on video games and esports"

2022-08-03
Reading time 11:08 min

When it comes to finding potential intersections between two very different worlds like casinos and esports, Anthony Gaud looks poised to become a suitable driving force in those efforts, since he seems to have been on every side of the businesses. Having made several achievements for giant corporations like The Walt Disney, Microsoft Games, Discovery Networks, Hasbro and Nexon, and consulting for gaming companies like Scientific Games, he is also a board member of the Esports Trade Association and the Greater Atlantic City Chamber, Chair of American Heart Association Gaming, and an Emmy Award winner, among several other credentials. He is currently the CEO of The Gaud-Hammer Gaming Group (G3), co-founded by him in 2019.

"I've been a television writer, art director for TV shows. But when I switched to digital, I think it was the most fulfilling part of my life," says Gaud, who will be one of the speakers at the inaugural CEC/EIC Northeast Summit in Atlantic City on October 18-19, created by the Casino Esport Conference (CEC) of Las Vegas and the Esports Innovation Center (EIC) of New Jersey's Stockton University.

In an exclusive video interview with Yogonet, he says he has done a lot of firsts in his career, including the first computer-generated television show and the first free-to-play gaming with Nixon, brought to the US. He also produced the first video on demand (VOD) channel with Comcast, and the first public-private partnership in esports in 2019. In 2020, G3 helped facilitate the first legal esports betting event in New Jersey in conjunction with Allied Esports, which drew 1.7 million unique viewers.

"So in a sense, I like to try to invent things. When we started, it was ideas for television shows, and now it's big technology and business concepts," he recalls, and then refers to his current projects related to esports betting in Atlantic City: "But I don't think anything I've ever worked on before is as big as what this is. And it's important not just to my company and my investors and my staff, my team, my partners, but also to Atlantic City in New Jersey. What we're doing now is trying to create a new way to wager on video games and electronic sports, esports. And it's something that a lot of people have predicted will be the future."

"We have been completely off the radar when it comes to what we're doing, with only a select group of people. But we have significant partners with our project that we will announce next year," he anticipates. "Amazon Web Services, Comtrade, LexisNexis, Continent 8, these are some of the biggest partners in the iGaming space and backbone technologies for iGaming. And all of them have, in one way or another, given us technologies and/or funding for technologies and innovations, and new technologies to launch for what we're going to announce next year. So we're excited, and we've been working very hard to get this done."

When asked about his decision to speak at the new CEC/EIC Northeast Summit, he mentions CEC founders and executive producers, Ari and Ben Fox: "I've known Ari and his brother Ben for years, mostly Ari, and he is a very earnest person. And I say that because there's a lot of people in esports and in the gambling sector and that crossover of esports gambling, and a lot of people are talking about a lot of stuff, and it's easy to claim to be an expert, go on panels and just open your mouth about the future. It's very hard to make it. And when I say Ari is earnest, I mean, he's one of the ones that are actually actively trying to help people create these things and bring them into fruition."

"We need to start understanding that talking about the future doesn't do anything, like how a company is going to get things going for New Jersey and the gambling industry and the esports industry. One of the first things we did, we worked with the New Jersey Economic Development Authority and Bill Penders to help bring Stockton's Esports Innovation Center into reality. So we worked for more than a year to select a partner which was chosen to be Stockton and make that happen, in order to create an industry here. We worked with the New Jersey Assembly to draft not one law, but two, to make esports wagering and videogame wagering a reality here, and then we're working on further laws and amendments that will make it more refined and allow an industry to be born here in Atlantic City. So I like to look at it as a sort of Silicon Valley on top of what the casino industry has already established here," Gaud describes.

His company has just started showing its technology to a few select prospective partners, and Gaud says the reception is "very encouraging." "The industry is going to be a big one. I think it's going to be a lot bigger than people realize. A lot of the iGaming companies don't really understand. Well, it's not their job to understand what is the next level of iGaming. So if you're on a casino floor, if you're a slot machine designer, it's your job to make sure that the current products work, that people are playing those slot machines. It is not your job to figure out what's going to replace the slot machine. So, people that take risks, like myself and other people, we take those risks in order to present what could be the next slot machine. And at these shows, I think, at least in my small effort, I want to be able to weed out the talk from the people who do."

Furthermore, as esports and immersive technologies still could seem uncertain for traditional casino executives, Gaud finds the approach and arguments to open up the conversation around that block. "I don't need to convince you that video games are big. Video games are big. And these are the numbers. I don't need to convince you that wagering on video games will work. It's already happening. And it may not be legal, that may not be licensed. I mean, it has no protections whatsoever. It's what we call grey market, black market products. But the numbers are huge. And one of the most important things I can say is, not only is it happening, but now they're moving into your territory."

"So wagering on Tetris is one thing. Wagering on games that are very similar to poker and blackjack is an entirely other thing. And that's exactly what's going on with the skill-based gaming companies across the United States," he points out. "Now, we just need to make sure that we do the same thing, and make sure that it's licensed, and it works through casino partnerships, and that the New Jersey Division of Gaming Enforcement and every appropriate enforcement agency in gambling in the United States also approves of these things, which is what, if you're going to hit what my project is, that's what it is." 

"But I think the mistake that a lot of us made at the beginning was painting a big picture without realizing that the people we were speaking to have a much more financially-focused vision. So the numbers are out there. The gray market, black market is already a giant space. We aim to make it legal. We aim to make it larger, and we aim to normalize it so that it does replace the current generation of iGaming with the millennial generation when they move into casinos in the next 5 to 10 years," he concludes.

Another key aspect brought up by Gaud is that even without marketing, people are "very interested" in an esports and video game wagering product, and he sees a lot of demand in that field. However, he underlines the need for more promotion of these esports betting-related products and offerings, for leveraging all possible marketing resources to let people know these wagering options and events exist. "That's actually the biggest issue, if you're going to spend all this money to do something, tell people about it. Because then the result, the news that comes out of it, the spin is that it doesn't work. And I think that many, many people believe it does work just if you do it the right way," he explains.

In the same sense, he praises his business partner Allied Esports, which runs the HyperX Arena Las Vegas at the Luxor, for putting a "fantastic product out there giving visibility to something that's been on the fringe. If you're over the age of 45, you don't even know this exists, even though it may be the biggest thing on the planet." "Allied, by putting that big pyramid in the desert with the Allied Esports logo, I think a lot of people are starting to take notice and it's one of many steps for the maturity of video games and esports," he adds.

In the process of seeing the esports betting industry thrive in the U.S., Gaud identifies a flaw so far, which is the attempt of copying South Korean culture, where he saw esports players be treated like celebrities in the streets, and three or more TV channels dedicated just to video game competitions. "But I think us trying to copy South Korea's popularity of esports is incorrect. It's a completely different culture. PC bangs, which are the gaming venues they have there, cannot be replicated here very easily, even though many people have tried. So what we're trying to do and working with other ones, and especially at this kind of events that Ari is hosting, is steering the industry to move away from trying to replicate a different market that doesn't work here." 

When asked about the case of Esports Entertainment Group (EEG), which became the first licensed esports betting operator in New Jersey this year, Gaud analyzes the technologies EEG is moving into the marketplace. "One is Vie.gg, which is an online sportsbook for esports. So when you launch something like that, you have to look at the competition and see, for example, Rivalry is a great competitor, or even DraftKings, because they're all running esports events too, like fantasy sports. How does what we're doing compare with them? So can we steal users from DraftKings or Rivalry, which is an offshore product? And how do we do it, with a better what? A better product, better marketing, better experience?"

And another challenge for companies like EEG —which according to EIC Executive Director Andrew Weilgus has been the guinea pig in a state where there's really no market for it yet— is explaining to people how this technology works, and why it is trustable. "From the user's point of view, how do they know it's trustable? Because you're talking about something that no one's ever done before. So in those situations, you want to show an example of it being done," he suggests. "And the other one is like, what is it that your brand represents? Are you doing esports? Are you going to do mostly online esports or are you going to do esports live, in a live environment? Is it a combination of the offerings? Make it clear what it is you want to do."

Eric Weiss, who has spent 30 years in the New Jersey Division of Gaming Enforcement (DGE), and is one of the CEC/EIC speakers as well, recently told Yogonet that Atlantic City has a great infrastructure for esports to thrive. Gaud delves further into this concept: "New Jersey is the leading state, they're the most aggressive. I would say Nevada is next with some of the stuff that Seth Young and Seth Schorr are doing with their Esports Technical Advisory Committee. So what does infrastructure mean? Infrastructure means a lot of things, but at a helicopter level, it just means how are we going to figure out how to do this? So how do you do a live event? What are the rules for that? What are the equipment requirements? What are the requirements for the streamers? How do you make sure there's no collusion? How do you know that the games aren't fixed and there's bots and stuff on it like that?"

"The other level is infrastructure also means laws. So is it legal to do these things? Do you require licensing or no licensing? And another way that infrastructure gets discussed is what are the business terms? So what do we expect to pay a partner for this or that? Like, are there sponsorships in place that can subsidize this? Can we afford to have events? Because setting up events is expensive with union costs, for labor costs. So infrastructure means all of those things. And then on top of that, infrastructure means creating a process where video game companies like Activision and Blizzard and Riot and Microsoft are going to be comfortable allowing you to use their games in a regulated environment for real money," he adds.

"And it's an enormous amount of stuff. But I can tell you that we've been successful. My company is doing a very large share of that lift, along with people like Eric, along with people like Seth Young and Seth Schorr, Andrew, and along with companies like Odds on Compliance, and our partners, it's obviously their self-interest because we're all looking to make this a successful endeavor, but it doesn't mean that we're not doing it the right way for the players and for the fans. It actually means that we are. That's the endeavor. Anyone could do this gray market, black market. We're trying to do it above board. But having daily conversations with business leaders, politicians, regulators and individual sports companies and CEOs and casters and streamers and players, it's a lot to keep track of. It really is. But I would say right now, New Jersey and Nevada are clearly in the lead. But most states tend to follow the guidance, if not the first mover in this space. And I think once established in both of these states and some other states that I can't talk about just yet, you're going to see it rapidly evolving throughout the United States," he anticipates.

Gaming and youth culture, esports and Gen Z-focused media platform FaZe Clan completed its $725 million business combination with a special purpose acquisition company (SPAC) last month and started trading as a public company on the Nasdaq. Gaud is a business partner with one of the company's board members, and anticipates an imminent announcement with them. "Faze Clan is interesting because they're not an esports company, they're a lifestyle brand that happens to use esports and Gen Z as the brand. And it is very, very interesting to me how many others will follow in their footsteps, because we've been waiting for that sort of moment where things break out and see the next generation take over. And I think Faze Clan is on the cusp of being that spark."

"The whole crypto NFT space is sort of driven by groups like Faze Clan that use that same sort of enthusiasm to drive up interest in cryptocurrencies and whatnot," he continues. "So the culture is moving in that direction. Our announcement is not related to gaming, it's related to media. It is going to be in tandem, following in the footsteps of what Faze Clan just did. And there's a few people that know it already. We actually spoke yesterday (July 21) at the NAC Esports conference of collegiate esports, to talk about it. I think you're going to see that Faze Clan will start to turn the keys over from the millennial generation to the Gen Z generation. And I think the Gen Z generation is going to be much more aggressive about culture than the millennial generation. Actually, it's already happening. So Gen Z is a totally different kind of group of people, and they're much more aggressive, and they're much more business minded. And I think the world will change very, very quickly. So I'm very excited about what Faze Clan is doing."

Watch the full video interview with Anthony Gaud on our YouTube channel.

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