uckbox has reported a 500% increase in year-over-year growth in 2020, and became a publicly listed company on the TSX Venture Exchange in December 2020. The company's CEO, Quentin Martin, tells Yogonet in a video interview that all the available indications, whether Twitch viewing figures or the industry metrics, all show the same thing: "The pandemic has accelerated esports maybe two or three years into the future, and that growth has been sustained as traditional sports have come back, as some countries have been lucky enough to come out of lockdown."
In terms of most popular games for wagers, he says the "Big Three" (Counter-Strike, League of Legends, Dota 2), for both Luckbox and nearly all its competitors, make up for 90+ percent of the gambling volume in the esports space, and that shifts depending on geography and which particular majors go on at any given time. "So I think the surprising trend is just how much those big three dominate and will continue to dominate."
Luckbox became only the third publicly traded esports betting company globally. "It's been an absolute roller coaster since we decided to go public," Martin says. The firm hopes to do some M&As later in the year. Luckbox almost tripled the price in the short period of time since it started trading. "We also launched a funding round last week looking to raise 5 million, and because of overwhelmingly positive interest, we've had to upsize that to 15 million as well. So books will close next week, and that looks like it's given us a lot of fuel to really take Luckbox strongly into the future, more than enough to keep us running in the short term, and for our growth strategy and to fuel the M&A roadmap that I'm hoping one day to be able to tease a little bit more publicly."
Martin says a key milestone for the company is scaling. Luckbox is investing in its team, which was made up of 30 people a few weeks ago, the number climbed to over 40 now, and "hopefully it will be about 60 by the end of the year, but not really much beyond that." The CEO specifically highlighted the recent hires of Ryan Kaspi as Chief Financial Officer, Thomas Rosander as Chief Customer Officer, and Nevzat Ucar as Head of Content Marketing.
The company is also investing in user acquisitions, with at least a couple of million spent on acquiring traffic for the rest of the year. As Luckbox further expands, it seeks to replicate a model where its primary acquisition channel is its brand, esports acquiring the under-40 Gen X millennials, GEN Z who want to gamble, and then to cross-sell them. With that aim, it has launched traditional sports betting. "So in 80 countries around the world, you can now bet on basically every sport you can think of at Luckbox, and we hope that a huge milestone later in the year will be the addition of casino games as well."
Ahead of the Super Bowl, Luckbox added a range of live, traditional sports through a partnership with EveryMatrix. "It's a great partnership, and we're really fundamentally looking to increase the average lifetime value of our player. I think about half of Counter-Strike players also enjoy betting on football. So although our brand is still all about esports and acquiring people who really are fans in that space, we recognize that they're also going to like traditional sports," Martin says.
When asked about the potential Canadian sports betting market, in case single-event sports wagering is legalized this year, Martin says the legislation is welcome. "As of today, it's estimated that about 14 billion Canadians bet every single year on offshore accounts. And so legalizing this will bring better access for the operators or provide better quality and user experience for the users in a safer betting environment. And as we're now headquartered in Alberta, we thoroughly welcome this opportunity and we follow the legislation and hopefully upcoming licenses with eager anticipation."
Luckbox CEO compares this with Android's recent announcement that they were now expanding the number of countries that accept gambling apps, and PASPA's repeal in the US. "It's just another sign of the acceptance of sports betting globally. And really, I hope this trend continues."
Looking ahead, Martin mentions Goldman Sachs 2020 pre-pandemic forecasts that the esports betting would have 44 percent year on year growth, adding that we're going to see that exceeded in 2021. "I think that the Big Three games are going to continue to dominate and we're going to see increased demand for betting products, we're going to see the option to bet on streamers, play specific markets, hopefully, additional real-time betting. At Luckbox you can bet on 95% or almost every match in the world, more so than any of our competitors. But also you can watch the stream on 95+% on both mobile and desktop. And I think you're going to start to see more of the big operators either trying hard to get in organically or starting to make acquisitions in the esports betting landscape to kind of shortcut and bring that experience in-house," Martin tells Yogonet.
"And at Luckbox hopefully you're going to see this steady growth going forward, increased revenue. And we've got some cool tricks up our sleeves that we hope to bring to market as and when we can get them out."
Quentin Martin believes all the trends in traditional sports will over time translate into esports as well. "So everywhere you look, you see this increased adoption. Among the average esports enthusiast, three-quarters of them are older than 18, meaning gambling is eligible for that. And perspectively our average bettor is 32. So we're going to see so much growth built into the audience every year that goes past. We see 5 percent, 10 percent increase just in the number of bettors and enthusiasts out there, not to mention that they're getting older and earning more wealth and whatnot. So for me, there's just so much organic interest and such a large gap to catch up until we've got the same kind of sports betting natural further that you get in mature markets like the UK on our traditional sport. So for me, it's just another indicator of the growth potential in the industry."