The Barca Games initiative aims to extend the club’s influence in the eSports domain. Adding a Valorant team highlights Barcelona’s commitment to diversifying its presence in the digital sports landscape.

The Rising Series, recognized as the foremost Valorant competition in Spain, will serve as a key battleground for the Bar?a Valorant team to showcase its prowess.

X (formerly Twitter) user and professional gaming streamer Lembo posted about Barcelona’s new eSports endeavor, calling it a “leak.” The club hasn’t yet released an official statement about the launch.

The recent announcement aligns with a growing trend of soccer clubs expanding into eSports, showcasing the increasing synergy between traditional sports and the booming gaming industry. The move also comes on the heels of soccer legend Lionel Messi’s entry into the eSports scene. Along with former Argentine soccer player Sergio Agüero, he became part owner of KRü Esports, competing in the VCT Americas.

Barca Games Takes FC Barcelona to New Level

Barca Games represents the club’s ambitious leap into the expanding world of gaming and eSports. Set to launch in early April, Barca Games aims to create a dynamic and engaging platform beyond traditional sports.

Specific details about Barca Games are yet to be fully revealed. However, including a Valorant team in the LVP Rising hints at the platform’s potential multifaceted approach. It’s expected to offer a blend of competitive eSports content, gaming experiences, and perhaps, interactive fan engagement opportunities.

Valorant Continues to Gain Momentum

Valorant is already one of the most popular games in the eSports realm, and it isn’t slowing down. The Valorant Champions Tour (VCT) has emerged as a powerhouse in the competitive gaming scene.

In response to the dynamic nature of the gaming landscape, Riot Games is introducing modifications to the VCT’s format and structure. Each international league will have separate tournaments, including a debut tourney in Spain.

There will also be changes to how the VCT awards points. Now, they will be called Championship Points and are meant to be more closely aligned to performance goals. At the same time, the change could alter eSports betting as teams and players see quicker shifts in scoring than in previous tournaments.

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The Nevada Gaming Commission on Thursday approved regulations developed by the state’s Esports Technical Advisory Committee and recommended by the Nevada Gaming Control Board (NGCB).

The regulation, formally 2022-07R, “explicitly” includes esports within other sporting events. The rule allows sportsbooks to accept wagers on esports in the same manner as traditional sporting events.

“The regulations are very important to our industry,” said NGCB member Dr. Brittnie Watkins. “These amendments have been a long time in coming, and it’s my belief they will help promote and increase the volume of wagers. They’re in line with our policy goals of promoting the success of gaming.”

The Nevada Gaming Commission (NGC) unanimously adopted 2022-07R on Thursday after the three-member agency made a small adjustment to the regulation.

Doping Component Ditched

Prior to the NGC approving the esports betting regulation, oddsmakers wishing to include wagering on an event like the “League of Legends World Championship” had to file a request for inclusion with state gaming regulators. Those requests required man-hours from sportsbooks and added unnecessary workloads, the Esports Technical Advisory Committee determined.

Now, Nevada sportsbooks can swiftly place a sanctioned esports tournament on their boards.

The NGC agreed with the NGCB and the state’s esports experts in thinking that oddsmakers are adequately skilled in determining if an esports event meets the criteria for legal betting. The commission, however, didn’t agree to include a recommended provision on doping.

“It’s a nice idea, but logistically, financially, and practically, it’s very difficult,” said Commission Chair Jennifer Togliatti.

Esports By the Numbers

Esports, or competitive video gaming, is a big industry in the U.S., and is only forecast to balloon in the coming years.

Chicago-based Cognitive Market Research concluded earlier this year that the esports market will grow from about $1.5 billion to nearly $4.5 billion by 20230, with a compound annual growth rate (CAGR) surging about 18% during that time frame.

Researchers cited major esports players like Microsoft’s Xbox “entering into partnerships in order to support and expand their operations in the esports business” as a reason for the lofty projections. New technology that allows esports to be played on additional products is also expected to grow the market.

Over the last few years, there has been a rapid increase in smart device adoption and internet penetration. Smart devices offer flexibility to customers on a smartphone, laptop, desktop, or tablet. With these devices, users are simply able to access several esports through apps and websites,” the research report detailed.

“As online gaming and associated activities gain traction, the esports market is expected to see a considerable increase in income. The popularity of these games has surged with the introduction of various applications and websites. People are attracted to esports attributed to various reasons. The primary reason for this is that players can win real money. Some players even make a full-time career by joining competitions. Similarly, key players are participating in a variety of measures to increase player numbers,” the study added.

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PokerStars entered into a sponsorship agreement with Furia in 2022. This alliance marked the convergence of two diverse yet dynamic communities, uniting poker enthusiasts and eSports fans under a common banner.

The first product in line, according to a PokerStars announcement, is a specially designed hoodie, tailored for poker players who achieve victories in specific events on the PokerStars platform. This initiative not only adds a layer of exclusivity to the gaming experience, but also serves as a tangible token of achievement for players in the world of online poker.

Sporting the Swag

These limited-edition hoodies will carry the branding of PokerStars and Furia, reflecting the synergy between the two entities. The collaborative effort is a testament to the increasing overlap between traditional poker and the burgeoning eSports industry in Brazil.

PokerStars plans to unveil additional products in the partnership pipeline over the next year, expanding the range of exclusive offerings available to the gaming community.

In anticipation of the upcoming product launches, PokerStars and Furia enthusiasts alike are eagerly awaiting the chance to buy the items. The merchandise will not only showcase their skills at the virtual poker tables, but also allow players to wear their achievements with pride through these exclusive, limited-edition items.

Furia has emerged as a formidable force in the competitive gaming arena, transcending boundaries with its exceptional performance across various titles. The team has made its mark in popular games such as Counter-Strike: Global Offensive (CS:GO) and League of Legends, where their roster has consistently demonstrated top-tier skills and tactical prowess.

Furia, which spent $700K to buy CS:GO player Gabriel “Fallen” Toledo de Alcantara Sguario several months ago, has secured notable victories in several tournaments. It has also begun to expand into the North American eSports market after beginning to form teams in 2021.

eSports a Huge Draw for Brazilians

eSports may not have the betting appeal of the NFL or NBA, but it’s getting there, especially in Brazil. A new report by Pesquisa Game Brasil (Brazilian Game Survey) shows that 63.8% of Brazilian gamers follow eSports competitions.

This translates into greater participation in betting, as Brazil continues to mold its gambling legislation. The founder of sports trade data analysis company Full Trader Sports, Ricardo Santos, attributes this to the consistency of the teams.

As opposed to most sports, where the results can vary greatly from one game to the next, eSports teams often show relatively identical levels of performance. This makes it easier for bettors to analyze the potential for success and increase their returns.

Studies have shown that Brazil is the largest eSports market in Latin America. With regulated sports betting coming to the country, eSports participation and wagers will likely gain significantly more ground.

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Casino.org reported in February on the Saudis investing $488 million in the video gaming and esports sector. But a report from London’s Financial Times this week claims the kingdom’s spending in the industry has swelled to more than $18 billion.

The Saudi-owned Savvy Games Group is leading the buying binge. The firm recently acquired US-based Scopely, and bought significant stakes in Chinese startup VSPO and the Embracer Group in Sweden.

VSPO specializes in the organizing and hosting of esports tournaments. Embracer is a group of businesses that develop video games tailored toward esports.

Esports are multiplayer video games that are played competitively over the internet. The games are designed to provide spectators with entertainment and an array of betting opportunities.

Esports Betting

Several legal sports betting jurisdictions in the US allow wagering on esports, though state gaming regulators have said the markets haven’t attracted as much action as anticipated.

The bulk of the wagering is instead conducted not through legal sportsbooks, but through social channels and through skins gambling. Skins gambling and loot boxes often take place in-game between teams and players.

There have been 40 esports tournaments since 2015 that carried a prize pool of $3 million or more, according to the website tracker Esports Earnings.

“The kingdom aims to become home to 250 gaming companies and studios and create 39,000 jobs, with the industry contributing 1% to the gross domestic product by 2030,” the Financial Times report detailed.

PIF Activity

PIF has recently been in the global headlines not only for the fund’s investments in esports, but also for its role in the world of professional golf. PIF bankrolled LIV Golf, the controversial breakaway golf tour that lured many high-profile golf superstars with hefty signing bonuses and extravagant tournament purses.

PIF will be the forthcoming entity’s premier sponsor, and PIF Governor Yasir Al-Rumayyan will sit as chairman of the joint group.

PIF critics say the Saudis are using their oil riches to diversify the country beyond oil and improve the country’s public image. Saudi opponents also contend that the country assuming significant control of the PGA Tour represents “sportswashing” on the kingdom’s behalf, an effort to distract from Saudi Arabia’s poor record on human rights.

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The Turkish eSports media outlet Esporkilik reported on Wednesday that Riot would allow sports betting companies to sponsor teams and events in its Valorant ecosystem. They’re already found in CS:GO and FIFA, although in a limited fashion,

But an inside source at Riot says the report isn’t true.

Esports teams have recently experienced significant reductions in their investment funds, particularly in Europe and the US. This has led to a struggle to find new revenue, which could potentially be mitigated by allowing more sponsorships by bookmakers. Sports betting and gambling operators often pay more than other segments.

Betting Brand Baloney

If Esporkilik‘s report is true, it would mark the third time Riot has dealt with controversy over its sponsorship policies in the past few years. Three years ago, its eSports division accepted financial support from Saudi Arabia. But that deal fell apart after community pressure.

That same pressure could be at the nucleus of the current sponsorship rumors. Esporkolik asserts that it received details directly from Riot about the new sponsorship policies, despite the gaming company later refuting the claim.

Dropping a hint about expanding sponsorship options would be a great way to evaluate new opportunities. Given Riot’s previous backlash with its Saudi deal, allowing the eSports community to respond to a rumor would offer insight into how well sports betting sponsorships would be received.

That’s not to say that Riot has taken this route – perhaps Esporkolik misinterpreted the information it received. However, if Riot was looking for feedback, it got it.

Market Crossover

There were more than a few negative comments on social media channels about the possibility of sports betting operators sponsoring events and teams. However, there is an ongoing presence of betting in eSports. Dignitas’ CS:GO team, for example, is sponsored by eSports betting operator VIE.gg. DraftKings became the sponsor of Faze Clan in 2021.

But most gamers don’t like the idea. This is primarily because the demographic is young. The average gamer in the US is between 18-25, while 24% of the segment is under 18 years old, according to Statista.

In 2022, Riot struck a deal with FTX to promote the cryptocurrency exchange. That ended in disaster when the exchange collapsed later that year. Team SoloMid, an organization founded in 2011, also had an agreement with the exchange.

The eSports ecosystem remains strong but is losing ground. Viewership of some events, like last year’s League of Legends Championship Series finals, dropped by as much as 33%.

Recently, the Valorant Challengers League in Europe had to reduce its content and broadcasts after its organizer, Promod, lost several sponsors, according to Dot Esports. Promod is now “operating the league at cost,” which questions its survivability.

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On Wednesday, Rawan Al Butairi, director of the federal government’s international affairs office, said that the initiative will focus on eSports and gaming during the Leap technology exhibition in Riyadh.

The Saudi Ministry of Information and the Center for Government Communications will also launch a study program in 2023, with 30 companies participating in training opportunities. Playhera, an eSports tournament platform, also announced a $100-million investment in a cloud-based gaming platform to help the company grow.

Poised For Gaming Growth

A recent YouGov survey revealed that the Saudi Arabian gambling industry is set to grow by 250% by 2030, and eSports are predicted to be a driving force behind that growth. The London-based market research firm said that by 2030, Saudi Arabia’s GDP will receive 50 times more economic input from gaming than in 2022.

A separate report by the Boston Consulting Group predicted the kingdom’s gaming consumption will reach $8 billion by 2030. That amounts to a compound annual growth rate of 22%.

With revenues of $6.8 billion last year, the Middle East is the last of the five regions that Newzoo studied. That represents 6.6% of the global market. Saudi Arabia posted the highest growth rate in the region last year at 4%.

It has been estimated that the global eSports market will grow 21% over the next six years, according to data Fortune Business Insights published. It is predicted to jump from $1.44 billion in 2022 to $5.48 billion by 2029.

A Shift in Power

A recent survey also found that the Middle East and North Africa region boasts almost as many gamers as Europe (377 million vs. 386 million). The survey was fielded by Nine66, a Saudi-based game development company that provides infrastructure, skills development, networking, capital, and advisory services to game studios and developers.

The survey further says that the number of game startups in Saudi Arabia should almost double from 13 in 2021 to 24 in 2022, making it the fastest-growing domestic market.

Meanwhile, at the Leap exhibition in Riyadh, US-based software development company Unity Technologies acknowledged its role in the local industry. It announced the first Unity Academy in the Middle East and Africa, an initiative to support the kingdom’s overall gaming plans.

Saudi Arabia and The Sandbox are also teaming up on new Metaverse projects. The Sandbox is a metaverse world on the ethereum blockchain where players are able to create and monetize virtual properties.

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Johnson claims breach of contract on the part of EEG. He submitted the suit in the US District Court for the Southern District of New York, seeking damages of up to $3 million, according to court documents.

The lawsuit alleges the company’s termination of Johnson’s employment contract was based on “contrived reasons” that fail to meet the requirements of a “for cause” termination. Johnson also asserts that EEG failed to pay his salary, bonuses, and severance pay as agreed in the contract.

More Fluff than Stuff

Johnson’s contract with EEG abruptly ended on Dec. 3, 2022. At the time, the company accused him of “fraud, willful misconduct, and/or gross negligence,” according to his termination letter. The self-described entrepreneur and financial services expert argues that EEG used that terminology in an effort to force him to resign.

As for the latter reason, Johnson claims that the board of directors of EEG already addressed and dismissed the allegations. It unanimously agreed not to conduct an investigation into them in April of last year.

Johnson stated in the suit that he has incurred losses, which include a cash bonus of $450K, per his contract. They also include $1.15 million, the equivalent of 200K shares in EEG that his contract provided him.

EEG’s board of directors asked Johnson to resign last month following a slow 2022, for which it blamed the then-CEO. In the fourth quarter, it posted an adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) loss of $6.5 million.

Johnson has also stated that, even if there had been indications of fraud, these don’t meet the threshold for dismissal, per his employment contract. EEG refutes this, as well as his other allegations.

This month, the board hired Spectrum Gaming Group’s Alex Igelman, the founder of eSports consultancy firm Esports Capital Group, to take over. Igelman is also the cofounder of FairP2P, a “membership-based self-regulatory organization focused on the oversight and governance of the monetized competitive peer-to-peer (P2P) skill-based gameplay,” according to the company’s description.

Complete Rewrite of Company Operations

The weak performance led EEG to close up eSports online betting platform Vie.gg. It also had to sell its online casino operations in Spain, as well as close Argyll iGaming in the UK and Ireland.

As of the middle of January, the company continues to conduct damage control and put everything in order. It reportedly had only $500K in cash and owed $200K to customers at the end of 2022.

The good news is that there will be some money coming in soon. The sale of its gaming assets in Spain should conclude this month. If it does, it will deliver $1 million to the company. There’s an additional $1 million the country’s Directorate General for the Regulation of Gambling holds on deposit.

Wherever possible, EEG will use additional proceeds to pay off other debts. It defaulted on a loan last October, and it needs to close that gap to stay above water. If it isn’t able to complete the asset sale in Spain, the company’s future will be uncertain.

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SIS will provide events that originate from the company’s British-based gaming studio. It will offer matches officiated by Esports Integrity Commission-trained referees, who will be visible to viewers watching on bet365. SIS will provide what it calls an “ultra-low” latency live-stream feed that will reach screens in less than a second. The broadcast will also feature live commentary and betting prompts.

Richard Ames, SIS CEO and president of SIS Content Services (the company’s US division), said his company’s solution offers an esports product featuring a multitude of events bettors will find attractive and desirable margins for operators.

We have made good progress to date in the US with SIS Content Services Inc., and this new deal with our long-term partner bet365 is further evidence of our products gaining traction in this key market,” Ames said.

The first product available on bet365 is ebasketball.

Games Played by SIS-Employed Gamers

From its studio, SIS produces its H2H Global Gaming League. It hosts more than 150,000 events annually and provides sports betting operators with contests around the clock.

SIS also employs the gamers who play video games at its studio in Milton Keynes. According to the job description on its website, an ebasketball gamer must be good enough to beat the computer at the “superstar” level on NBA 2K22. They must also be at least 18, should have experience playing in tournaments, and carry themselves well as they will be featured on broadcasts.

The base pay for the gamers is ￡10 ($12.20) an hour, with bonuses for playing and winning. Gamers also earn ￡3 ($3.66) an hour more for playing games during the overnight hours (11 pm to 6 am).

Besides esports, SIS also offers operators video feeds and trading services for horse and greyhound racing. It handles more than 30,000 horse races and 38,000 greyhound races annually that take place at tracks around the world. It offers both pari-mutuel and fixed-odds wagering options for racing.

The company launched SIS Content Services last year to expand its presence in the US. Globally, it works with more than 400 operators in 50 counties.

Why This Deal Matters

There are a couple of reasons why a deal like this is noteworthy.

Those numbers are only expected to rise in the coming years. By 2025, Newzoo forecasts more than 318 million enthusiasts and another 322 million casual viewers.

Then there’s the New Jersey aspect of this. The state is considered the gold standard for gaming regulations, and approval there opens the door for expansion into other US states.

“The United States is the second-largest esports market and fastest-growing sports betting market in the world,” SIS Content Services Vice President Michele Fischer said. “We are ecstatic to be able to launch SIS’ esports offering in New Jersey, which we see as the first milestone in our strategy.”

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The inaugural Dubai Esports Festival (DEF) concluded Monday, wrapping up 12 days of eSports competitions, music concerts, and more. With cash prizes on the table, it drew a significant crowd from the region.

At the same time, halfway around the world, Panama was hosting its first LATAM Pro Gamers League (LAPGL). The event is at the center of an effort to turn the Central American country into a regional eSports hub.

Dubai Embraces eSports

The DEF attracted eSports leaders, gamers, and fans of pop culture from around the globe. Over the course of 12 days, a solid lineup of live events, concerts, and other activities provided entertainment for tens of thousands of attendees.

The festival’s top attractions included the PUBG World Championship 2022, Initiate Summit, and Minecraft Esports Schools Clash. Running simultaneously was Game Expo, an event highlighting the best games and innovations in the video game space.

The Minecraft Esports Schools Clash had over 600 participants from 12 Dubai schools. Another event, the Gamers HUB ME Regional Online Tournament, attracted almost 1,800 competitors. Participants were competing for a share of the AED22,000 (US$5,988) prize pool through a variety of popular game titles, including Fortnite, FIFA23, and others.

In addition, the Honor of Kings Regional Mobile Tournament was the first eSports LAN tournament to be held in Dubai. It offered a prize pool of $25K thanks, in part, to the game’s publisher and sponsor of the event, Tencent.

Thirty-two teams representing four regions participated in the tournament. The goal was a share of the prize pool worth over $2 million.

Panama Sets Sights on eSports

The launch of the LAPGL in Panama City, Panama, hopes to introduce a new era of eSports to the region. The regional esports league, aimed at the general public and the Latin American market, offers gamers a chance to win an all-expenses paid trip to the Grand Final in Panama, as well as cash.

The 2023 LAPGL games will take place simultaneously in different Latin American countries. Players from Mexico, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Colombia, and Panama will be able to participate, according to an LAPGL announcement.

The league will feature international, competitive-level categories. Each country participating in the league will have national qualifiers open to the public. Players can participate in the league by registering on the league’s platform and competing in the qualifiers in their country.

Players 16 years old and older can register through the digital tournament platform GameLobby, an LAPGL product. Each of the participating countries will have two national elimination phases. Through these, the best players from each country will qualify for the national final.

For the Regional Grand Final, the national representatives will travel with all expenses paid to Panama for the final competitions. The four-month-long season will run from May to August.

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While news of the closures of RedZone and SportNation — brands Esports Entertainment purchased in 2020 — was clearly met with enthusiasm by investors, the stock lost nearly 98% of its value over the past year. Its 52-week high is $6.67, but it closed at 14 cents today. Adding to the stock’s woes, an analyst yanked coverage of the gaming equity.

Following GMBL’s recent exit from several eSports related business in order to preserve liquidity, we are dropping coverage,” wrote Roth Capital analyst Edward Engel in report to clients. “GMBL has been struggling to remain a going concern since 1Q22 Shares of GMBL were previously Neutral rated, with a $0.45 price target. Effective with this note, all prior estimates, rating and price target are no longer relevant and should not be relied upon.”

Esports Entertainment Group is one of several small gaming companies currently grappling with going concern questions.

Esports Entertainment May Be on the Brink

In its 10-Q filing with the Securities and Exchange Commission (SEC) dated Nov. 14, Esports Entertainment confirms its ability to continue as a going concern is up in the air. One reason for that is the gaming company’s inability to service debt.

“The company has not maintained compliance with certain debt covenants, and is currently in default under the terms of the senior convertible note,” according to the regulatory filing.

Esports Entertainment added in the filing it has a deficit of $153.3 million as of the end of the third quarter and a history of recurring losses.

Esports Entertainment Needs More Cash

While closing the aforementioned UK businesses represents a cost-cutting measure, the stark reality is Esports Entertainment likely needs access to more capital. The issue is whether or not a creditor will be willing to step up to provide that cash.

“The Company believes that its current level of cash and cash equivalents are not sufficient to fund its operations and obligations without additional financing,” according to the 10-Q. “Although the Company has financing available, as further described below, the ability to raise financing using these sources is subject to several factors, including market and economic conditions, performance, and investor sentiment as it relates to the Company and the esports and iGaming industry. The combination of these conditions was determined to raise substantial doubt regarding the Company’s ability to continue as a going concern for a period of at least one year from the date of issuance of these unaudited condensed consolidated financial statements.”

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The new framework is in the Senate, and the consensus is that the chamber could approve it this week. Brazil is one of the largest markets for the development of games and software. But companies that could otherwise help it grow aren’t impressed with the government’s approach.

Because of the way Brazil defines the segment of video games and DFS, they fall into the same category as slot machines. Therefore, the tax bracket is higher on the scale, limiting innovation and growth.

A New Era for Gaming

With the expected approval of the bill, the development of electronic games will be considered research and technological innovation. This will allow companies to enjoy tax benefits.

The Brazilian Association of Fantasy Sports (ABFS, for its Portuguese acronym) estimates the measure will lead to 5,000 new direct and indirect jobs. These would appear in the industry before the end of next year, and only in the DFS space. That implies additional job creation in the others.

Gambling revenues could double by 2026, reaching R$120m (US$22.5 million), as well. This would put Brazil as the third-largest market in this segment, taking a spot behind the US and India.

The Senate will discuss a bill that has been alive for the past several months. Initially, it addressed console and PC games, but later grew to include eSports and DFS.

The popularity of eSports continues to rise in Brazil. The results of the most recent Game Brasil survey, an annual study on the consumption of online gaming in the country, showed that 81.2% of gamers surveyed had heard of eSports. This translates into a rise of 16.9% compared to last year.

Brazil Politics Calm Down

Brazil is working on the transition from the government of Jair Bolsonaro to that of Luiz Inácio Lula da Silva following the recent runoff election. It’s a slow process, prolonged even more by the protests that followed the vote.

The result is less interest in addressing gambling issues at the highest level of government, and more in political preening. At the height of that is an effort to change Brazil’s constitution to give da Silva more money to fulfill his campaign promises.

That amendment must find support by December 15, the deadline set for voting on the 2023 budget bill by Congress, if it’s to survive. As a result, any other legislative issues are on the back burner until then.

In addition, the current government has begun pouting since the bitter defeat. Bolsonaro has kept a low profile, clearing his schedule and remaining quiet on social media, where he had a strong presence before his loss.

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Riot Games is introducing new VCT leagues, which will host international and regional events. It’s a novel approach that mixes current leaders with rising legends, which could benefit competitive eSports everywhere. The VCT Americas International League will bring together the 10 leading organizations from North America and Latin America to compete for the regional championship in Los Angeles.

North America will have five teams whose names are commonly known to eSports fans. Cloud9, 100 Thieves, Evil Geniuses, NRG, and Sentinels have already left their mark on the eSports industry and will likely continue next year.

On the Leaderboard

Being part of the scene for several years, Cloud9 and Evil Geniuses are synonymous with eSports. They have huge fan bases and multiple championships wins, including in Legends and CS:GO. Looking to the future, these veteran outfits will fuel the next generation of stars, as they proved in the last VCT Game Changers tournament.

The Sentinels have been around since the early days of First Strike. With the expansion of international leagues, the Sentinels are seeking to push the region forward and inspire a new generation of fans to believe in them.

eSports continues to find larger audiences, both for viewing and participation. The industry isn’t slowing down, with a recent report projecting an overall value of $3.5 billion within five years. With a compound annual growth rate (CAGR) of 21.3%, it’s easy to see why it’s an important part of the global gaming industry.

Latin America Leads the Charge

Among the chosen teams out of Latin America are KRü Esports and Leviatán. Since the game’s launch, both squads have become leaders at the top of Valorant eSports. In addition, they have cultivated a vibrant fan base within the broader Hispanic community.

Alongside their international campaigns, KRü and Leviathan catapulted onto the global stage by impressing fans with precision in front of their screens. This has made their long-running rivalry something to talk about in 2023 and beyond.

Also, out of Latin America, Brazil will have three teams. LOUD, FURIA, and MIBR are at the top of the charts and will also host the first edition of the VCT next year.

LOUD stand out as the current world champions. They are also a leading Brazilian organization in several other games. With an unprecedented fan base, the team will defend its crown against the best across the LatAm region.

FURIA and MIBR have a long history in Brazil, mostly in the first-person shooter scene. They both have multiple international titles and generations of players rising to the top. This could prove why their region might be the most powerful in the Valorant ecosystem.

For the EMEA (Europe, the Middle East, and Africa) roster, 10 teams made the final cut. Spain’s Giants, Team Heretics, and KOI captured three spots. In addition, there are BBL and FUT Esports from Turkey, NaVi from Ukraine, British squad FNATIC, Team Liquid from the Netherlands, and France’s Vitality and Karmine Corp.

Marking Their Territory

Squads from all regions embarked on a months-long selection process to get here. It included a written application, multiple in-depth interviews, and detailed financial reviews. The process was incredibly competitive and overwhelming, given the number of requests the Riot team received during this time.

Riot Games will release all of the information about the tournament lineups in the coming months, though the first event is already in place. The inaugural tournament will be held in S?o Paulo, Brazil, on Feb. 14, 2023.

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The video games publisher announced the 13th game in the wildly popular series on Saturday during a “Ubisoft Forward” Livestream showcasing forthcoming titles.

On Monday, it said that the AO (Adult’s Only 18+) rating attached to the game had been a mistake. As was a content descriptor that warned of “intense violence, blood and gore, sexual themes, partial nudity, and real gambling.”

The extremely rare AO certificate also appeared in an Xbox Store rating for the game.

Following the announcement of Assassin’s Creed Mirage during Ubisoft Forward, some store pages mistakenly displayed the game for preorders with an Adults Only ESRB [Entertainment Software Board] rating and are being fixed,” the publisher told?GamesIndustry.biz.

“While Assassin’s Creed Mirage is still pending rating, Ubisoft wants to reassure players that no real gambling or loot boxes are present in the game,” it added.

Kiss of Death

It’s little wonder Ubisoft was anxious to clear up confusion. The AO rating is so rare because it’s a commercial kiss of death for a new title. Moreover, the developers are touting ACM as a game that goes back to the original game’s roots in the series, released in 2007.

Since all three major video game console manufacturers, Nintendo, Microsoft, and Sony, prohibit AO-rated games from being published on their platforms, the classification is a de facto ban. Retailers refuse to sell them, and Twitch refuses to stream them (although they can be downloaded from Steam).

Video Game Nasties

Of tens of thousands of titles published over the last 25 years, just 27 have received the notorious classification.

The last was Hatred in 2015. In this particularly nasty game, the main character, who “hates the world and the human worms feasting on its carcass,” can replenish his health by horribly executing innocent people at random.

In 1998, Thrill Kill was?a deeply weird Mortal Kombat-style game involving ultra-violent protagonists dressed in BDSM gear fighting to the death. Famously, it never made it to market after receiving an AO rating. ?

But for all the talk of whether video-game loot boxes constitute gambling, there has never been a consul game that involved real-money betting.

However, in 2003, a PC game called Peak Entertainment Casinos did. It remains the only AO-certificate game to receive the rating for reasons unrelated to violence or sexual content.

The post ‘Assassin’s Creed Mirage’ Won’t be Gambling Game, Ubisoft Confirms After Error appeared first on Casino.org.

There is already a World Esports Day, celebrated on October 23. However, Representative Christopher de Venecia wants the entire month to be about the ecosystem instead of just a single day.

The Philippines has its own Esports governing body, the Philippine Esports Organization. It would lead in facilitating the collaboration while continuing to shape the industry.

Paving the Way for Athletes

de Venecia asserts that many don’t consider eSports athletes legitimate professionals. That’s because they see video games as a vice, distraction, or form of gambling. But de Venecia says esports is a legitimate sport and a creative industry. He compares it to dancesport, competitive ballroom dancing. It is both a sport and performing art that the International Olympic Committee (IOC) recognizes as a sport.

While dancesport has yet to appear in any Olympic competition, its recognition by the IOC is a significant first step. For years, eSports players and supporters have also fought to have competitions included in the Olympics.

One of the country’s Esports teams for Valorant had to withdraw last year from a tournament in Berlin, Germany. This followed the rejection of a travel request, even though the team members qualified for the tournament.

As a result, industry insiders hope to work with the Department of Foreign Affairs to improve the treatment of eSports athletes when competing in international tournaments. In addition, they also intend to meet with the Department of Labor and Employment to develop a more efficient counter-attack that will protect the team’s owners and the players themselves.

Cashing In

Only 13 US states have taken action specifically on Esports sports betting, according to National Law Review. All but Nevada did so following the US Supreme Court’s demise of The Professional and Amateur Sports Protection Act of 1992 (PASPA) in 2018.

Sports betting analysts predict the industry will be worth as much as $2 billion in global revenue this year. Within eight years, though, that could reach $12.5 billion, according to Research and Markets. That would reflect a compound annual growth rate (CAGR) of 21.9%. In addition, sponsorships could see a CAGR of 40% and media rights could add 23%.

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ESIC and Valve are now at loggerheads because of their differences. The dispute stems from a scandal in 2020 when an investigation determined that 37 Counter-Strike: Global Offensive (CS:G0) coaches exploited a bug in the system to cheat.

When the investigation concluded, ESIC handed down its punishments. However, Valve decided to take matters into its own hands, giving even more punishments to a few coaches.

Alessandro “Apoka” Marcucci and Nicholas “Guerri” Nogueira admitted to taking advantage of the exploit. As a result, ESIC gave them “demerits” that are calculated based on the number of times they accessed the bug. Apoka received a 5.4-month ban from any ESIC-linked events. For his involvement, Guerri received a four-month ban.

Not Playing Nicely

Following an appeal, Apoka was eligible for a reduction in his ban. While that should have been the end of the punishment, things were only getting started.

Valve is not an ESIC member, a trait that has frustrated CS:GO players and coaches on a few occasions. The video game is one of its leading titles. But the company continues to shrug off all attempts to join the integrity body.

They have no legal recourse to force Valve’s hand, but they’re hoping ESIC can intervene.

A few days ago, according to an ESIC statement, Apoka and Guerri submitted appeals to the organization. ESIC agreed that the Valve punishments were “no longer proportionate” to the crimes the two committed.

It then tried to appeal to Valve to reverse its position. However, according to ESIC, the only response was a hollow echo.

ESIC to Change Demerit System

While it won’t affect how Valve handles violations, ESIC has updated its punishment metrics. It said this is a direct result of the game developer’s double jeopardy response, which means it won’t have much impact on any sanctions Valve may introduce in the future.

Valve will only take into consideration the number of demerits ESIC issues. For Valve, two demerits mean that the individual will have to miss one major. Three demerits will result in a ban from two, while four will lead to three missed majors.

ESIC’s metrics should effectively lower the number of demerits a player or coach receives for violations. This, in turn, could have an impact on any punishment Valve issues. However, what it doesn’t do is eliminate the problem and bring Valve to join Allied Esports, ESL, Oddin, Entain and others in unifying the eSports space.

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The case dates back to 2019 at the Manila International Container Port in the Philippines. At the time, Chong became a figure in a narcotics trafficking case as one of the owners of Fortuneyield Cargo Services Corporation. The cargo service company allegedly had ties to smuggling operations.

Specifically, police believe the company plays a role in the trafficking of illegal methamphetamines. As a result, authorities want Chong to turn himself in so he can respond to the charges.

Police in the Philippines issued a warrant for Chong’s arrest during the summer of 2021. This past April, he tried to appeal the warrant. But a court judge rejected his request.

Arrest Warrant in Play

The NBI began a search operation to detain Chong in 2021. However, so far, it has been unsuccessful. Now, authorities have launched a public appeal for him to give up.

Hello Twitter, as some of you may be aware, throughout the last few hours there have been several news articles written about my alleged involvement in a case in my home country, the Philippines.

— Bernard Chong (@brenchong) August 2, 2022

That’s not likely to happen. Chong hasn’t stated where he is but took to Twitter on Tuesday to provide an update on the situation. In the thread where he refers to the Philippines as his “home country,” Chong “categorically” denies the claims.

“I believe in the justice system that protects the innocent, and the truth will always prevail. I hope this clarifies any doubts you have, and thank you for your support during these trying times,” Chong added.

In the Philippines, an arrest for drug trafficking or smuggling means automatic pre-trial detention. There is no bail, and cases can take, on average, three to five years to make their way through the court system.

Bren Esports Pushes Forward

Chong founded Bren Esports in 2017. The organization has teams in several esports competitions in Wild Rift, CS:GO, Valorant?and others.

Bren qualified for the Valorant Champions Tour last year in Berlin but couldn’t participate because of visa problems. Weeks later, Bren parted ways with the players, who went on to join Team Secret.

In January 2021, the organization’s Mobile Legends team won the M2 World Championship in Singapore. For that victory, it took home $140,000.

Bren is still on the schedule to try to qualify for the 14th IESF World Esports Championships (IESF WEC). It will participate in the qualifiers beginning on July 8 and has not indicated if the current drama with its founder will make a difference.

The IESF WEC is a world championship esports series held in Bali this December. It will feature six games this year and a prize pool of $500,000. In addition, for the first time, PUBG Mobile will appear at the event.

Besides being the founder of Bren, Chong has his hands in several commercial segments. Among these, according to media outlets and a previous version of his LinkedIn profile, are the social media platform Lyka, apparel brand World Balance, and Canadian restaurant chain Tim Hortons.

Lyka, a Things I Like Company Limited subsidiary, refutes any connection to Chong. It told Casino.org that Chong never had any involvement with the company.

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Every now and then, France decides to try to place an emphasis on French as an avant-garde language. This can only be possible, it feels, if it doesn’t commit the faux pas of allowing foreign words to sabotage its core vocabulary.

The Académie Fran?aise (the French Academy, the country’s primary council on language) considers that some technological words from the US can be dispensed with. It’s almost cliché, but France believes it’s the cat’s meow (or “Le miaulement du chat”) when it comes to languages.

Taking a Detour from the Norm

The Anglicisms are “degrading” the French language, according to the organization. It envisages a world where French speakers use only French terms. Absent this, it believes, anything less will cause France to lose its heritage.

As a result, the prohibition of these words in the country should be contemplated. Based on this, the Académie Fran?aise in the company of the French Ministry of Culture made the decision to ban terms such as “eSports,” “streaming,” and “cloud games.”

In exchange for these words used mainly by gamers, amateurs and professionals from the technological world in France, it’s necessary to introduce French terms that translate to the same thing. The terms will be “joueur-animateur en direct” (live player host) and “jeu video en nuage” (cloud video game).

For its part, the Ministry of Culture told AFP that the video game sector is composed of quite a few Anglicisms. These, it asserts, could act as a “barrier to understanding” for those outside the gaming realm. This undoubtedly contradicts the sentiment of regular gamers, who may feel they’re drowning in an alphabet soup.

Par for the Course

The French Academy previously expressed concern about English jargon in video games. In 2017, it published a lexicon with different French terms to replace Anglicisms.

The French Academy made its decision following an investigation, according to the Ministry of Culture. A group of experts reviewed the existence of terms in French on websites and magazines dedicated to video games. The search yielded no results for “joueur-animateur en direct” outside of news where the new term was mentioned.

The question now is whether this measure will be of any use. Changing the way millions of people speak is not a simple task.

The creation of a language comes from those who speak it, from the acceptance and dissemination of certain words. We will see what this experiment looks like and, also, if more countries begin to take similar measures, or if it’s just a silhouette of a dream.

The post “Esports” May Be Banned in France, But It’s Not What You Think appeared first on Casino.org.

Shares of the gaming company are down more than 15% today, extending the 12-month to about 96%, after the operator on Monday missed quarterly estimates for a second consecutive quarter while reducing its 2022 outlook.

As Roth Capital analyst Edward Engel describes the situation, Esports Entertainment is now in survival mode, and that will limit growth over the near-term.

As such, GMBL is focused on survival rather than growth, prioritizing cash flows over revenue. If management can find a way to appease creditors while rebuilding its cash balance, we believe the company can better pursue the growth stories it set out to achieve,” he writes in a note to clients today.

The analyst rates the stock “neutral,” with a price target of 45 cents, down from $1.45. The new forecast implies upside of 25% from current levels.

Esports Entertainment Stock Is a Gamble

On Monday, Esports Entertainment reported fiscal third-quarter sales that missed the consensus estimate by $7 million, while lowering full year guidance to $55 million to $60 million from $70 million to $75 million.

“GMBL announced a cost-cutting program that includes G&A redundancies and lower budgets for growth opportunities, such as cuts to marketing and capital intensive businesses. While the lower cost structure will limit top-line growth, GMBL accelerated expectations to generate breakeven cash flows to early FY2023 (CY2H22) vs prior guidance of FY4Q23,” adds Engel.

Murky Capital Structure

Adding to investors’ concerns about the company’s financial state, Esports Entertainment is attempting to renegotiate the terms of a convertible debt offering. That offering gives bondholders rights to convert to stock at $17.50 a share — a price the stock hasn’t traded at in over a year.

That convertible offering was worth $35 million, and while the company’s management team believes it will be successful in getting bondholders to agree to new terms, Roth’s Engel says more transparency is needed around the company’s capital structure.

“While we do see a scenario where GMBL generates positive FCF before running out of cash, the capital structure is less uncertain. GMBL’s $35M convertible notes are due June 2023, and are currently in technical default,” says Engel. “These note holders may elect to convert the notes to equity, which implies 16M shares (vs. 41M basic shares outstanding). However, these note holders are not natural holders of growth equity stocks. Rather, a better scenario for GMBL would be for these notes to be sold to strategic growth investors.”

For now, it’s unclear if those growth investors will emerge to take a gamble on Esports Entertainment stock.

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The risk of permanent closure of LAN and eSports rooms in Italy appears to be real. All this because of a legal measure that blocks any activity that allows games “outside of one’s usual home.”

However, the operator of gaming venues in Italy believes they are infringing on his turf. Sergio Milesi, the CEO of LED Srl, has struck out to keep them from gaining more ground.

Too Close to Home

Milesi asserts that the LAN and eSports rooms are providing a form of gaming, but aren’t paying the requisite tax associated with the activity. In his complaint, he asserts that, because of the COVID-19 pandemic, the gaming segment and the arcades he runs lost traction. In addition, the sector now has to compete against operators of eSports rooms that, as he acknowledged, are not even traditional gambling operations.

Milesi added that the rooms are not complying with the law. That was enough for the government to intervene. Authorities have closed a number of facilities for allowing “illegal gambling,” and have seized their equipment. Others that weren’t targets voluntarily shut down.

The law to which Milesi refers dates back to 2003. It only mentions billiards and table football (foosball) – nothing about PC and console games. Gambling and gaming equipment must be certified and tamper-proof, according to Article 110, paragraph 7c of the TULPS (Consolidated Text of Laws on Public Security).

In addition, finding legal approval to cover software would take years. It would also, in theory, prevent the addition of new games to a PC or console, which is counterintuitive to the objective of eSports activity.

Playing Video Games is not Gambling

In LAN rooms, and in eSports, players only win money in established competitions. There is no inherent gambling component, except for the obvious eSports betting. That component, however, is not an intrinsic part of the sport.

Changes are coming. Italy’s Undersecretary of Finance, Federico Freni, told the Chamber of Deputies this week that the government reserves the possibility to take into consideration the most appropriate rules in order to ensure stable and efficient regulation as soon as possible.

Luca Carabetta and Daniele Belotti, two members of Italy’s Chamber of Deputies, and Senator Simona Pergreffi appeared in the Italian Parliament with gaming and eSports entrepreneur Alessio Cicolari to promote talks on specific regulations for the market. The result seems to be that specific eSports regulations will be developed in the country.

Every day there are more countries that recognize the activity. The introduction of regulations will allow Italy to formalize the business and likely give more facilities to eSports athletes.

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VIE.gg, an esports betting platform, recently completed its five-day “soft play” period. The New Jersey Division of Gaming Enforcement (DGE) liked what it saw with VIE.gg’s operations, which resulted in the state gaming regulator signing off on a full launch.

VIE.gg is owned and operated by Esports Entertainment Group. The esports firm is based in London and has an office in Hoboken, New Jersey. Esports Entertainment is the first esports betting platform licensed in New Jersey to accept legal wagers on video game tournaments.

Esports Entertainment is partnered with Bally’s Atlantic City to operate an iGaming platform. New Jersey law requires each online gaming operator to be tethered to one of the nine Atlantic City casinos.

Esports — short for electronic sports — involves competitive video gaming. Gamers typically compete on teams in tournaments that attract many viewers and betting action. Marquee events include League of Legends, Dota, and Counter-Strike.

Blanket Approval

The New Jersey DGE had previously allowed licensed sportsbooks to accept wagers on esports events on a case-by-case basis. Sportsbooks had to petition the gaming agency for betting approval for tournaments like “The International.”

The DGE didn’t report many requests from New Jersey sportsbooks requesting esports approvals. But Esports Entertainment maintains that betting on competitive video gaming is a booming industry.

Speaking with the Associated Press, Johnson referenced an esports market research report from Newzoo that projects esports will generate $1.6 billion in revenue globally by 2024. The industry reported 2021 revenue of just slightly north of $1 billion.

Esports Estimates

As for esports wagering, Johnson believes global betting will top $200 billion annually by 2027. The US gaming industry reported taking $52.7 billion in legal sports bets last year.

Johnson expects his firm to generate up to $2 million in gross esports betting revenue this year. The esports executive says the gaming vertical is attractive because its core demo is the 18- to 35-year-old.

For the past decade, casinos have been investing heavily to develop new gaming formats that attract younger people to their floors. Slot machines are losing favor among millennials.

Atlantic City casinos seem open to testing the esports waters. Along with Bally’s partnering with Esports Entertainment Group for its online business, Hard Rock Atlantic City hosted the esports betting firm’s two-day Madden NFL video game tournament last month.

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According to iGaming Ontario, 13 operators have been approved to launch sportsbooks, online casinos, or poker sites. While that list includes some high-profile US and European brands, there are also a couple of firms with Canadian roots that are ready for the advent of legal online gaming in their home and native land.

One of those is Rivalry Corp., a Toronto-based operator that’s been around since 2016, but has made its bones in different online gaming circles. Think more action on CS:GO and MLBB (Mobile Legends: Bang Bang, for those not in the know) than wagering on the CFL or MLB.

Many typically associate sports wagering with attracting younger bettors than casinos. However, Rivalry CEO Steven Salz said his company’s operations skew even younger that that.

To use a US kind of analogy, it’s like Robinhood vs. Charles Schwab if you’re an investor,” said Salz, who is also a Rivalry co-founder, in an interview with Casino.org.

Its average customer is at least 10 years younger than more traditional sports betting apps. Because of that, Salz said Rivalry “specifically built” its platform and designed its user experience for the under-30 crowd.

In Ontario, regulators set the minimum age to wager on sports betting or iGaming sites at 19. While some US states allow 18-year-olds to bet, in most states the age requirement is set at 21.

Influencing Customer Acquisition

In the US, one of the issues facing sports betting operators is the cost to acquire customers. The top apps in the States still show losses on their earnings sheet as they look to attract bettors in new markets with large matching bonuses and free bets.

Rivalry offers bonuses – it currently matches first deposits at up to $100 – but Salz said that’s not a primary tactic. Instead, it’s a tool meant to complement conversion efforts.

And influencers in the gaming realm, Salz said, jump at the chance to work with the brand, comparing Rivalry’s reach in eSports to what Red Bull did for extreme athletes.

“We do measured engagement monthly than the aggregate of all of our peers,” Salz said.

As it engages online, Rivalry is also seeing its betting traffic increase as well. The public company, whose shares trade on the TSX Venture Exchange, has reported its month-over-month handle growing by more than 20% since the start of last year.

US Not a Priority Market

Because Rivalry skews younger, Salz said in an interview in late February that the eSports market made up 85 to 90% of their online wagering handle. The company has held a license in the Isle of Man for four years.

After launching in Australia and now in Ontario, he believes that will get diluted as they take on more traditional sports betting customers. By next year, traditional sports will probably make up 40% of their business.

However, Salz said the company has no intention of abandoning its core audience. The under-30 market represents 40% of the world’s population.

To that end, he said Rivalry doesn’t see the US market the same way that traditional sports betting operators do.

I think because of the nature of the demographic we target, there’s just again, there’s more valuable markets for us outside of the US,” Salz said. “We don’t need the US in the way the mature, traditional sportsbooks needed it.”

The company believes there is opportunity there. However, it would likely partner with other operators rather than trying to get into each state on its own.

How Rivalry Handles Responsible Gaming

Because Rivalry does market to a younger audience, it does bring up questions about responsible gaming (RG) practices. As Salz pointed out, for some Rivalry’s users, the first bet they place there is the first they’ve ever made.

When it comes to betting, they encourage customers to wager smaller amounts. Rivalry also focuses more on the entertainment aspect of wagering.

“Our whole thesis is we just want people spending what they would spend on Uber Eats in a week or their Netfilx subscription,” Salz said.

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Esports Entertainment facilitated Atlantic City’s first skill-based esports betting event over the weekend. The two-day Madden ’22 tournament was hosted at Hard Rock Hotel & Casino.

The Press of Atlantic City reports that “hundreds of gamers” showed up to compete in the Madden video game tournament, vying for a chance to win $9,000 in cash and prizes.

Esports Entertainment debuted its LANDuel esports betting platform in conjunction with the Madden showdown. Company CEO Grant Johnson says the network handicaps players based on their past performance to assure that competitors of similar skillset are paired against one another.

Millennial Pull

Casinos across the country have spent much time and resources over the past decade trying to figure out what exactly the millennial seeks in a casino. Slot machines have been proven to exude much less attractiveness to younger people, and that presents a grave concern for the future of the US gaming industry.

The proliferation of sports betting across the country has helped bring in more 20- and 30-year-olds. But sports betting is a low-margin business for the house. Johnson believes esports is the answer.? ?

What we’re presenting here to casino owners is a new product to get a different demographic into the casino. In that room, there’s hundreds of 20-something-year-olds, which they’re [casinos] not getting right now,” Johnson told the Press of Atlantic City of his Hard Rock esports turnout.

Johnson says 256 players competed over the weekend in the Esports Entertainment Madden tournament. He explained that Hard Rock officials and DGE personnel were on hand to observe the esports operation and betting component.

Turbulent Performance

Johnson added that he hopes the success of the Madden tournament will spur more casinos into hosting esports tournaments and that the DGE continues to recognize the importance of approving legal betting on the games. But the clock could be ticking on Esports Entertainment, a company that has endured a rocky five years that has resulted in some analysts questioning its liquidity.

Esports Entertainment (NASDAQ: GMBL) shares have tumbled from more than $44 in July of 2017 to less than $1 this week.

“With minimal cash ($1M at Dec’ 31), GMBL is relying on its ATM to fund monthly cash burn of ~$1.3M, where $16M remained on the ATM as of Feb. 18,” Roth Capital analyst Edward Engel said in a note last month.

However, Engel began his Esports Entertainment coverage with a “neutral” rating, with a $1.40 price target. The stock was trading at $0.81 as of this writing.

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Challenger is a Windows-based software application that video game players can download and install to their computer hardware. The software allows players to compete against one another for actual cash.

San Diego-based Challenger announced this week that it has secured and closed its seed fundraising round. Investors, a company statement revealed, include Acies Acquisition Corp., a blank-check special purpose acquisition company (SPAC) Murren co-created in 2020.

The mass market of video game players still have no option to participate in skill-based contests at scale,” said Challenger founder and CEO Chris Slovak. “In North America and Europe alone, there are more than 300 million gamers over the age of 18 who play regularly and have no solution to complement their gaming experience with cash-based contests.

“Challenger was launched to overcome this problem,” Slovak added.

Murren has been on an investing blitz since departing MGM. Through his SPAC and personal investments, the former casino executive has stakes in Challenger and predictive gaming app developer Boom Entertainment.

But Murren’s biggest play to date came last June by taking Playstudios, Inc. public through a merger with his Acies Acquisition Corp.

Growing Opportunity

Challenger is currently only available for Counter-Strike: Global Offensive being played on Microsoft Windows. The company plans to soon add several other popular titles, including Fortnite, Call of Duty: Modern Warfare, and Valorant.

The Challenger software, the company says, is a passive installation that allows for in-game betting between players. The application coordinates players competing for money in a variety of ways, such as credit per kill and last player standing formats.

Gamers of all skill levels can participate, as players are grouped based on their recent performance in real-money competitions. Challenger autonomously facilitates the exchanging of credits, and players can convert those credits into cash.

Challenger plans to use its fundraising round to implement new titles to the software and bring the app to Xbox and PlayStation. SeventySix Capital and Revel Partners are additional private equity investors in the Challenger seed round.

Data research firm Insider Intelligence says the esports industry, or competitive video gaming, currently has 30 million monthly esports viewers in the US alone. The industry is expected to generate more than $1 billion in revenue this year for the first time.

The budding market has attracted much investment.? ?

“As competitive video games continue to integrate into popular culture, global investors, brands, and media outlets are all paying attention,” the Insider Intelligence esports review said.

Gamer Tracking

Challenger’s business model has less to do with the facilitation of peer-to-peer video game wagering, and more to do with the data the app will gain from its installations. Challenger automatically monitors a gamer’s gameplay and possesses the ability to translate that data into behavioral insights.

Challenger says its patented AI technology will provide the video gaming industry with invaluable intelligence.

“[Challenger] is positioned to have the most unique and expansive dataset on gamer behaviors, as it expands to cross-platform, cross-game, and cross-studio esports wagering,” said Wayne Kimmel, managing partner of SeventySix Capital.

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Nevada has been wrestling with how to govern esports betting for many years. Then-Nevada Governor Brian Sandoval (R) first encouraged the state’s Gaming Policy Committee to develop esports regulations back in 2016.

Nevada has since approved a smattering of esports betting requests from licensed sportsbooks. But while interest in video gaming tournaments for marquee titles such as Dota 2, CS:GO, and League of Legends?continues to soar, betting hasn’t.

Nevada’s Esports Technical Advisory Committee is to meet quarterly to hear testimony from esports experts and industry leaders. The goal is to present the Nevada Gaming Control Board with suggestions on how to best regulate competitive video gaming.

Testimony Addresses Underage, Cheating Concerns

The esports committee’s inaugural meeting welcomed testimony from several people with vast knowledge of the space. A leading concern regarding allowing gambling on esports tournaments is that many of the professional teams include gamers who are underage.

Las Vegas casinos and the gaming manufacturers they work with have for more than a decade trying to determine how to better attract millennials onto their gaming floors. Bowers believes esports could be a great entryway.

The Boyd executive told the committee that esports bettors would likely be cultivated into iGaming players. And while some underage players compete on esports’ largest stages, Bowers says audience insights show that a large component of the fanbase is over the age of 21.

Another paramount concern regarding esports is its proneness to match-fixing and cheating.

Ian Smith of the nonprofit Esports Integrity Commission says Nevada should embrace a “one and done” policy, where gamers found guilty of throwing a match are forever expelled from competing in Nevada.

Smith also said most esports professionals are committed to the integrity of the industry. He said Nevada should encourage all participants to join his Esports Integrity Commission and pledge to report any suspicion of deceitful play.

Industry Leader

Nevada’s gaming industry is the gold standard. The state’s governance of casinos has served as the regulatory blueprint for a slew of other states that have legalized commercial gambling.

Bowers says Nevada should also lead the way in esports betting.

I’d like to see Las Vegas and Nevada where it is in everything else that is gaming related. We should be at the top and doing it right and do things that make everyone proud,” Bowers declared.

Nevada’s esports committee is headed by Paul Hamilton, who is president and CEO of Atlanta Esports Ventures. The firm is dedicated to making the Atlanta area a major esports market that plays host to premier tournaments.

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Earlier this week, the Malta-based gaming and sports betting company said its fourth-quarter sales missed Wall Street forecasts by 22%, and it slashed its 2022 revenue guidance by 25% to 30%. After the stock tumbled 8.62% on Tuesday, it plunged 58.25% on Wednesday. The shares slid another 5.65% on volume that was more than double the daily average. Additionally, Esports Entertainment’s cash position is increasingly precarious.

With minimal cash ($1M at Dec’ 31), GMBL is relying on its ATM to fund monthly cash burn of ~$1.3M, where $16M remained on the ATM as of Feb. 18,” said Roth Capital analyst Edward Engel in a note to clients.

Engel starts coverage of Esports Entertainment with a “neutral” rating and a $1.40 price target. That implies upside of 20.6% from the Feb. 25 close. Over the past year, the stock plunged 93.3%.

Esports Entertainment Capital Structure Questions

Adding to investors’ concerns about the company’s financial state, Esports Entertainment is attempting to renegotiate the terms of a convertible debt offering. That offering gives bondholders rights to convert to stock at $17.50 a share — a price the stock hasn’t traded at since last April.

“Limited transparency in GMBL’s eventual cap structure makes it difficult to properly value shares, and we believe only special situation investors should consider investing,” said the analyst. “If taken at face value, GMBL’s implied 0.9x EV to FY22 sales is extremely cheap. But we have little conviction in GMBL’s eventual cap structure within ~6 months.”

Engel also criticized the operator for lack of transparency regarding its Netherlands exposure, noting rivals made clear to investors they were departing that market.

“We believe mgmt should have disclosed its Netherlands exposure and updated guidance earlier, where peer such as Entain, 888 and Kindred disclosed exiting the market on Oct. 1,” noted Engel.

Bull Case…Sort Of

Esports Entertainment is in the process of soft launching its technology for esports wagering in New Jersey. Should that effort bear fruit, it’s an obvious catalyst for the downtrodden stock.

Wagering on competitive computer gaming is viewed as a future growth driver for the US sports betting industry. But it’s one that hasn’t been tapped into in a significant fashion yet. Still, there are a lot of moving parts to a bullish thesis for this stock.

“While we remain positive on GMBL’s long-term opportunities, particularly within eSports wagering, a combination of liquidity concerns and reduced transparency limits our conviction. We acknowledge a bullish scenario where GMBL exceeds its latest guidance, shores up liquidity, repairs investor confidence, and erases recent share price declines,” concludes Engel.

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This is the last of several lawsuits that was filed against the Bellevue, Washington-based games giant in 2016.

All accused Valve of facilitating underage, unregulated betting because of the multibillion-dollar clandestine gambling industry that had grown up around the trading of its “skins.”

Hidden Industry

The skins are colorful designer weapons attainable with varying degrees of rarity, or purchasable outright, in the hit game Counter-Strike: Global Offensive (CS:GO).

Skins can be traded like baseball cards across Valve’s Steam platform, which helped give them a real-world, as well as in-game, value. But it was the ability to transfer them to third-party sites that enabled their use for gambling.

Valve distanced itself from these third parties, emphasizing that it neither condoned nor profited from them, although the company appeared reluctant to intervene.

But in 2016, as lawsuits piled up, it moved to dismantle the industry, telling the betting sites their Steam accounts would be deleted if they refused to cease operating.

Deceptive Acts?

The lawsuit was brought by a group of parents who had provided use of their credit cards to their children, who unbeknownst to them bought skins for the purposes of gambling.

The plaintiffs asserted that Valve’s failure to disclose information about the ability to purchase skins violated the Washington Consumer Protection Act (CPA).

The court noted that to prevail on a CPA claim, the plaintiffs must demonstrate an unfair or deceptive act or practice, plus injury.

Dismissing the case, US District Judge James Robart said the parents could prove none of the above.

Valve had not committed an unfair or deceptive act or practice because loot-box opening is not “gambling,” as a matter of law, wrote Robart. Meanwhile, the parents were not injured because the accounts belonged not to them, but the children, who chose to spend the money they were allocated on a legal product.

“The parents could not prove they had been deceived by Valve,” said the judge. “[They have] never visited a Valve or Steam website, never used Steam, never played CS:GO, and never saw or read any representations from Valve about CS:GO, keys, or weapon cases; [and] did not know about the weapons case features; and did not know that their children used their money to open weapons cases.

“The court agrees with Valve that no reasonable fact-finder could find that Plaintiffs’ decisions would have been affected by information to which they were never exposed.”

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The San Francisco-based company said the senior secured notes, which come due in 2026, are being sold in a private offering. Interest rates, redemption provisions and other relevant information haven’t been released as of yet.

The debt sale is the first for Skillz since its initial public offering (IPO) a year ago. Previously, the company’s capital-raising efforts consisted of equity sales.

While the issuance of corporate bonds doesn’t dilute shareholders as do equity sales, investors aren’t thrilled by the news. The bonds sale news sent Skillz lower by eight percent today, but volume was below the daily average. The shares are off 50.50 percent year-to-date.

Cash Could Be Used for Acquisitions

While Skillz is one of the most repudiated names in the iGaming space this year, investors might find some comfort in the company’s cogent explanation for the debt sale.

This offering bolsters the Company’s already-strong balance sheet and increases the Company’s financial flexibility to take advantage of strategic opportunities,” said the firm in a statement. “Skillz intends to use the net proceeds from the offering for general corporate purposes, which may include potential investments in or acquisitions of other companies, products, or technologies that Skillz may identify in the future.”

Skillz didn’t identify specific acquisition targets. But in its young life as a public company, the operator is proving acquisitive. In August, Skillz made a $50 million investment in Exit Games.

In June, Skillz announced the $150 million acquisition of online advertising firm Aarki. At that time, that transaction was widely lauded by analysts and investors.

At the end of the third quarter, Skillz had no debt and $540.3 million in cash on hand, according to an investor presentation.?This quarter was the 23^rd consecutive three-month span in which revenue grew.

Skillz Stock Catalysts

Skillz is clearly in a slump this year. But that doesn’t mean the stock is bereft of catalysts. Beyond a takeover, which has been rumored within the investment community, there are other avenues for the company to prop up its sagging share price.

Skillz is forecasting $389 million in 2021 revenue, and if that number is exceeded without topping prior rates of cash burn, that could give investors reason to cheer.

An extended rally by Skillz stock — something chastened bulls are longing for — could send bearish traders out of the heavily shorted shares.

Skillz has previously been mentioned as a prime candidate for a short squeeze. That’s the scenario when a heavily shorted stock rallies, forcing bearish traders to cover positions — squeezing them out — thereby sending the stock higher.

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The provider of esports wagering platforms and related technologies is higher by almost three percent today. That’s after trading higher by more than five percent earlier in Tuesday’s session. That temporarily stops some bleeding, as the stock tumbled 17.1 percent over the past week. Esports Technologies notes the UK license comes by way of its $75.9 million cash and stock acquisition of Aspire Global’s business-to-consumer (B2C) unit announced in October.

Through the deal, Esports Technologies gained 1.25 million deposited customers, the majority of them from UK-focused online sportsbook and casino brands Karamba, Hopa, and Griffon Casino,” according to a statement issued by the company.

The Las Vegas-based operator of an online gaming platform is also acquiring the BetTarget, Dansk777, and GenerationVIP brands in the transaction.

Significant Move for Esports Technologies

Gaining access to the UK, which is one of the most mature gaming markets in the world, is a coup for Esports Technologies – an upstart that went public earlier this year.

“The UK offers one of the world’s largest gaming markets. According to the UK Gambling Commission, Great Britain’s gaming revenue from April 2019 to March 2020 was approximately $19.2 billion. Online gaming has become the largest sector, accounting for roughly 40% of that total revenue,” according to the company.

Entering the UK also adds geographic diversification to Esports Technologies’ revenue stream. Currently, the company’s gogawi.com sports wagering platform does the bulk of its business in Asia and Latin America. Esports Technologies accepts wagers on esports as well as traditional professional sports.

Aspire Deal Could Be Long-Term Positive

In addition to landing the coveted UK market access, the Aspire Global transaction could pay dividends for Esports Technologies in other ways.

Shares of Esports Technologies are down 34.13 percent year-to-date.

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As esports betting continues to become more popular, the esports segment is seeing a transformative shift in how it operates.

Customers can now watch and place bets live on NBA2k21 games that take place all week in five-minute intervals.

“We’re delighted to have launched SIS Competitive Gaming with Betfan, and this partnership is testament to the relatively high margin esports product we can offer operators, who are eager to boost their sportsbook offering with profitable esports events,” said Anze Gantar, the digital sales manager at SIS.

SIS Competitive Gaming was launched last year. It has been used by a variety of operators, including bet365. Later, the omnichannel 24/7 betting services supplier moved to increase the number of esports content by doubling its output.

Every match is monitored by an Esports Integrity Commission (ESIC) trained referee.

SIS Continuing to Experience Growth

SIS has seen a lot of strong momentum this year, which has led to expanded requirements at the top level of the company. Two new non-executive directors, Dr. Laila Mintas and Giovanna D’Esposito, were recently appointed to help keep up with the international expansion.

Mintas, currently the CEO of Play Up USA, was previously Deputy President at Sportradar USA. Her experience in the gaming and betting industry spans over 15 years, and she is an expert on the regulation and legislation of sports betting. Mintas is a Las Vegas-based expert in sports betting.

D’Esposito, the GM (Southern Europe) for Uber, is also joining the ranks. In Italy, she was previously the managing director of Sky Betting and Paddy Power Betfair. She was responsible for taking the latter to a turnover of more than $300 million annually and building it to have a 100-plus employee workforce. D’Esposito is an expert in multi-jurisdictional complex businesses and brings a high level of operational excellence.

What is Esports?

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The Las Vegas-based company is angling to bring esports betting to a wider audience in the US. Currently, Esports Technologies’ gogawi.com platform is a sportsbook focusing on bettors in Asia and Latin America.

The patent application describes a private betting exchange model that is configured to offer operators and high-volume bettors greater liquidity and improved pricing in an esports betting environment where large bet sizes do not impact market prices,” said the company in a statement.

In the patent application, Esports Technologies details users’ ability to participate in various esports wagering markets.? Those include games, teams, players, and the capability of the platform to group those wagers into larger blocks, potentially bolstering liquidity in the underlying market.

In simple terms, sports wagering liquidity refers to the ability of the market to absorb large wagers or significant order flow without material alteration. For example, a highly liquid market, say the NFL, can handle a $500,000 bet on a single game, and a sportsbook operator might only move the line a half-point or point. In a less robust market like esports, big wagers can dramatically alter odds.

Esports Technologies Creating Wide Patent Portfolio

The recent patent filing is Esports Technologies’ third in less than five months. In June, the company filed a patent application for its existing technology that improves “the betting experience for sports and esports live streaming events.”

“In August 2021, the company filed a provisional patent application for a technology that uses artificial intelligence to generate odds models for use in a betting algorithm for esports tournaments and various stages of a tournament,” according to the statement. “In June 2021, it filed a patent covering a proprietary live streaming technology that integrates sports and esports wagering across many of the most popular streaming platforms, including Twitch, YouTube, Facebook Gaming, and Hulu, among others.”

Esports Technologies Stock Calm on News

Shares of Esports Technologies, a stock with a penchant for big moves in both directions, were surprisingly docile today on news of the new patent filing, closing higher by 0.63 percent on below-average volume.

The company went public earlier this year and is off almost 22 percent since its initial public offering. But it has some recent momentum, climbing 19.36 percent over the past 90 days. Among publicly traded gaming companies, those with internet casino and sports betting exposure are getting most of the attention. But that could change as more domestic jurisdictions approve esports wagering.

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On news of the deal, Esports stock surged as much 14 percent in pre-market trading. But those gains were pared after the market open. Traders are steadily selling shares of the Las Vegas-based operator of an online gaming platform, and, in late trading, the stock is off almost seven percent on volume that’s more than triple the daily average.

Under the terms of the deal, Esports Technologies will acquire Aspire’s portfolio of B2C proprietary online casino and sportsbook brands, including Karamba, Hopa, Griffon Casino, BetTarget, Dansk777, and GenerationVIP,” according to a statement.

Esports Technologies is paying $58.3 million in cash, $11.7 million in a promissory note, and approximately $5.9 million worth of equity for the Aspire assets. The transaction is scheduled to close on Nov. 30.

Wild Day for Esports Stock

Following its April initial public offering (IPO), Esports stock is developing a reputation for big intraday moves.

Today’s volatility in the stock may be attributable to the company disclosing a $36.2 million private placement of convertible preferred shares that allow investors involved in that offering to convert those holdings to common stock at $28.

“In the most recent 12-month period ending June 2021, Aspire Global’s B2C revenue was $73.9 million, and its earnings before interest, taxes, depreciation and amortization (EBITDA) was $8.2 million. During the same period, the B2C business recorded wagering of $1.8 billion and over 1.3 billion bets,” said Esports Technologies in the statement.

Interesting Outlook for Esports Technologies

Among publicly traded gaming companies, those with internet casino and sports betting exposure are getting most of the attention. But esports is a fast-growing theme in its own right. Esports Technologies gogawi.com platform is a sportsbook focusing on bettors in Asia and Latin America.

The Nevada company holds a license from the Curacao Gaming Authority and can accept wagers from punters in 149 jurisdictions. Historically, nearly all of the operator’s business was sourced in the Philippines.

Through the Aspire deal, Esports Technologies gains 1.25 million new deposited customers, which could accelerate the company’s efforts to boost its esports wagering market share.

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The Las Vegas-based operator of an online gaming platform filed a patent application for its existing technology that improves “the betting experience for sports and esports live streaming events.”

The provisional patent filing covers a proprietary technology that integrates sports and esports wagering across many of the world’s most popular live streaming platforms, including Twitch, YouTube, Amazon TV & Gaming, Facebook Gaming, and Hulu, among others,” according to a statement issued by the company.

News of the filing sent Esports Technologies shares higher earlier on Wednesday. But the stock has subsequently given up those gains and is trading lower by one percent at this writing. The company went public in April, with the stock quickly developing a reputation for volatility.

Esports Technologies: Another Esports Betting Contender

Today, esports betting in the US represents a scant percentage of overall handle and revenue in regulated betting markets. Wagering on it is legal in far fewer states than traditional sports.

That’s not preventing operators and other companies from preparing for what they view as a new, likely lucrative betting frontier. For example, Sony Interactive Entertainment recently filed a patent application that would permit PlayStation users to bet on esports competitions and place those wagers in bitcoin.

“Live streaming has seen explosive growth – rising from 1.97 trillion hours watched in 2019 to 3.93 trillion in 2020. Live-streamed gaming content was also on the rise, with fans watching more than 27 billion hours of esports across Twitch, YouTube Gaming, and Facebook Gaming in 2020,” according to Esports Technologies.

Esports Betting is Growth Frontier

On a global basis, esports betting drove $343 million in net revenue for sportsbooks last year, and that figure is forecast to jump to $862 million in 2024.

For its part, Esports Technologies, which can accept bets in nearly 150 jurisdictions, takes wagers on Counter-Strike: GO, League of Legends, Dota 2, StarCraft 2, Rocket League, Rainbow Six, Warcraft 3, King of Glory, and FIFA — all video games.

The operator also accepts wagers on traditional sports and leagues, including the NFL, NBA, Major League Baseball, soccer, and more.

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The application, tilted “E-Sports Betting Platform,” was filed last week and doesn’t directly mention PlayStation. Rather, it contains the phrase “computer simulation.” Sony’s PlayStation and Microsoft’s Xbox are the world’s dominant video game consoles, and are frequently used for esports play off personal computers.

Should Sony prove successful with the patent application, it would mark one of the initial avenues for esports gambling outside of traditional betting markets.

The wagering odds may be established by pari-mutuelly. The wagering odds may be established using past simulation play statistics,” according to the patent filing. “In another aspect, a method includes establishing odds for at least one future event in a computer simulation, and overlaying onto at least one presentation of the computer simulation at least one user interface (UI) showing the odds and indicating the event to permit a viewer to select to bet on the future event occurring or not.”

In simpler terms, the PlayStation system could eventually allow viewers of live steamed esports competitions to wager on outcomes in real time. That could get the video game giant in on what’s expected to a massive in-game betting market.

Platform Supports Bitcoin

Sony’s esports betting platform could also be another gaming use case for bitcoin, the world’s largest cryptocurrency by market value.

“Wagers may be pecuniary, e.g., money or bitcoin, or may be non-pecuniary, e.g., game assets, digital rights, and virtual currency,” according to the application. “When wagers are pecuniary, the odds offered may account for government take out, e.g., if the calculated odds are 5-1, the offered odds may be reduced to 4-1 to allow for some wagering assets to remain after payouts for the purpose of paying government take out.”

New Frontier for Esports Betting?

It isn’t immediately clear how the Sony patent, if it’s approved, will affect PlayStation owners in the US. Sports wagering is currently live and legal in 21 states and Washington, DC. But not all of those jurisdictions permit wagering on esports competitions.

Regulators in states that allow sports betting have been slow to warm to esports, often citing fears of match-fixing. However, New Jersey allowed sportsbook operators to take action on the League of Legends championship in November 2019, and Nevada permitted betting on three esports tournaments last year.

For operators, there’s money to be made in this space. It’s estimated esports generated $343 million in net revenue for sportsbooks in 2020 — a figure that’s forecast to surge to $862 million in 2024.

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In an S-1 filing with the Securities and Exchange Commission (SEC), the operator of an online gaming platform said it plans to sell two million shares within an expected range of $4.50 to $5. Esports Technologies, which will trade under the ticker “EBET,” is classified as an emerging growth company.

Among publicly traded gaming companies, those with internet casino and sports betting exposure are getting most of the attention. But esports is a fast-growing theme in its own right. Esports Technologies gogawi.com platform is a sportsbook focusing on bettors in Asia and Latin America.

We accept wagers on major esports titles including: Counter-Strike: GO, League of Legends, Dota 2, StarCraft 2, Rocket League, Rainbow Six, Warcraft 3, King of Glory and FIFA; as well as professional sports including the NFL, NBA, Major League Baseball, soccer and more,” said the company in the S-1.

The Nevada company holds a license from the Curacao Gaming Authority and can accept wagers from punters in 149 jurisdictions. Historically, nearly all of the operator’s business was sourced in the Philippines. But that’s changing.

“During 2021 and in connection with the introduction of our updated website, we intend to target additional markets in which we are presently licensed to accept wagers, including Japan, Thailand, Mexico, and South America,” said Esports Technologies.

Esports Technologies Could Be Ground Floor Idea

In the US betting scene, esports is well behind newer concepts, namely iGaming and online sports betting. However, some operators see value in this frontier and are making deals to prepare for what’s forecast to be exponential growth in the years ahead.

Last year, Nevada approved wagering on a trio of esports events. In March, policymakers there proposed Senate Bill 165. That legislation provides a framework for the state to create a commission regulating esports, perhaps paving the way for Nevada to become not only progressive on wagers tied to the activity, but to eventually be a hub for esports teams and competitions.

Good Time to Join Party

News of Esports Technologies’ IPO plans extends a brisk pace of small-cap gaming companies announcing share offerings, planning US listings, or both.

While Esports Technologies doesn’t generate revenue from the broader video game business or the advertising/TV viewership side of esports, the outlook for betting growth here is compelling.

“According to H2 Gambling Capital and iGaming Business, the net revenue from regulated esports-specific betting will grow by 39 percent year-on-year in 2020, to reach $343 million, and by 2024, the market is projected to generate $862 million in revenue,” said the company in the S-1.

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A high-stakes bidding war for the WPT quickly escalated over the past month between Element and the newly formed Bally’s Corporation. After Allied initially planned to unload the poker business to Element for $78 million in January, Bally’s made an unsolicited $100 million offer for WPT, as well as Element’s esports assets.?

A back-and-forth ensued, with Bally’s earlier this month amending its offer to $105 million for only the WPT. Allied said during its investors call this week that Element matched the offer, and after reviewing the two proposals, Element was deemed the victor.

“On March 24, 2021, Allied Esports announced that Bally’s had offered $100 million, then $105 million for the World Poker Tour,” Frank Ng, Allied Esports Entertainment CEO said on the call. “On March 30, Allied Esports announced that Element had offered $105 million for the World Poker Tour, which Allied Esports accepted.”

Allied Esports Entertainment was formed in August of 2019 when Black Ridge Acquisition Group combined Allied Esports and WPT into one entity and took the combined unit public.?

Shares of the company were flat yesterday on news of the WPT sale. However, they were up 2.78 percent today to close at $2.96 per share.

WPT Financials

Allied Esports’ Q4 2020 earnings results revealed that the World Poker Tour had a strong finish to the year.?

The WPT generated revenue of $5.9 million in the final three months, a 30.7 percent gain on Q4 in 2019. Net income was approximately $900,000, compared with a $100,000 loss in the prior year.

“While restrictions on hosting events since the start of the pandemic have been stricter in the United States than certain places around the world during the fourth quarter, WPT was able to hold both live and online events in other countries,” Allied Esports CFO Tony Hung explained.?

In a span of just 18 days, the WPT held 154 poker events with more than 60,000 entries and a total prize pool in excess of $2 million.?

Esports Back

Allied disposing of the WPT returns the company to an esports-only group.?

The company’s main asset is its HyperX Esports Arena at the Luxor Hotel & Casino in Las Vegas. The 30,000-square-foot multilevel venue is the first dedicated esports arena on the Strip.

Allied returned live esports competitions at the arena in late June. HyperX’s Saturday Night Speedway featuring Mario Kart 8 is back, too. Player registration begins at just $10, and qualifying races start at 6:45 pm. A $700 prize pool is up for grabs.?

Tournament capacity remained limited to 35 percent in Q4. However, that limit was increased to 50 percent effective March 15.?

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The pact is unique compared to previous deals struck between gaming companies and professional sports leagues, in that it’s not about generating awareness of sports betting. Rather, the NFL and Skillz are teaming up to reach global game developers to crowdsource a future mobile esports product. Under the terms of the agreement, the league and the company are hosting a global game developer contest.

Competing developers will have the opportunity to develop an NFL-themed mobile game. The game will be powered by the Skillz esports platform and will have joint marketing support from both the NFL and Skillz,” according to a statement.

The aim is to leverage the NFL’s status as the most popular domestic sports league with the Skillz platform to create a new esports game.

The combination makes sense, because there are more than 2.7 billion active mobile gamers and 10 million developers around the world. The Skillz/NFL developer challenge starts in the second quarter and creators can pitch any genre except for a game that would be a direct simulation of traditional 11-on-11 football.

Skillz Stock: Hot New Gaming Idea

Skillz stock is another gaming name born out of a merger with a special purpose acquisition (SPAC). In fact, two of the founders of Flying Eagle Acquisition – the blank-check company Skillz merged with — created the SPAC DraftKings (NASDAQ:DKNG) and executed a reverse merger to become a public company last April.

Five analysts started coverage of Skillz stock over the past month, four with bullish ratings. The consensus price target on the name is $29.80, well below the $38.40 area at which it resides at this writing.

In its brief time as a public company, Skillz is catching the eyes of buy-side investors, too, joining the rosters of some well-known exchange traded funds (ETFs).

NFL Betting on Mobile Gaming Growth

Conventional wisdom holds that professional sports leagues are warming to regulated sports wagering because the industry is growing and it’s an avenue for bolstering fan engagement.

However, the forecasts for esports and mobile/social casinos are staggering. Market observers believe that could be a $150 billion-plus segment by 2025.

Total esports viewership is expected to grow at a 9% compound annual growth rate (CAGR) between 2019 and 2023, up from 454 million in 2019 to 646 million in 2023,” according to Insider Intelligence forecasts.

By that year, esports television viewership could top all US professional leagues except the NFL.

As for the mobile side of the equation, the NFL may have the right partner in Skillz. The company’s users spend 63 minutes a day playing its games — twice the industry average.

Additionally, the Skillz retention rate for customers playing a game for at least a month is 24 percent higher than that of its rivals. Nearly a third of Skillz users playing free games ultimately become paying customers, according to the company.

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The new package of features, dubbed FIFA Playtime, are almost certainly part of a bid to avoid tighter regulatory controls. An increasing number of jurisdictions across the world are scrutinizing the game’s loot boxes and microtransactions for similarities to gambling.

Last month, the Redwood City, California-based company was ordered by a Dutch court to pay a €10 million ($11.7 million) fine for violating the Netherlands’ Betting and Gaming Act. EA has vowed to appeal.

What are EA’s FUT Packs?

Loot boxes are virtual items which can be acquired either through gameplay or in-game purchases (microtransactions), and offer players a randomized chance to win other virtual items of varying rarity.

Through FIFA Ultimate Team packs (FUT packs), which can be bought with real money, gamers can unlock virtual versions of famous soccer players, with the goal of assembling the ultimate team.

But it’s the combination of real money, chance-based mechanics, and the youthful market for video games that have proved to be controversial.

‘Grounded in Research’ ????

EA has always denied its games contain gambling elements, although FIFA Playtime introduces the kind of safeguards that are often associated with gambling products. Players, or their parents, will be able to monitor their spending by setting limits on how much premium currency they can buy, and the number of FUT packs they can open.

The integration of both tracking and limits in FIFA Playtime is grounded in research that shows that having access to more information helps players feel comfortable with how they play,” EA said in a blog post. “When combined with smart prompts to guide choices, players were able to better find a comfortable balance in their gaming.”

The company is anxious to avoid the blanket bans on paid-for FUT packs that have been imposed in Holland and Belgium.

FIFA Playtime features will join?FIFA 21?on PlayStation 4, Windows PC, and Xbox One from Tuesday, Nov. 17, and then on PlayStation 5 and Xbox Series X from Dec. 4.

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Up more than six percent in late trading, Malta-based Esports Entertainment is on pace for its best intraday performance in more than two months. The stock debuted on the Nasdaq in April and is higher by almost 68 percent since then.

With a market value of about $64 million, GMBL is a micro-cap stock, a highly speculative segment of the equity market that offers daring investors high risk/high reward potential.

Esports Entertainment epitomizes the giveth/taketh-away nature of micro-cap investing. Following its April initial public offering (IPO), the stock surged to $9.75 in June but has since tumbled almost 38 percent from those highs. The shares trade around $6 on Thursday.

Still, the pop in the shares today is the latest sign that investors are not only willing to bid higher online casino and sports betting equities, but they are particularly willing to do so when New Jersey is mentioned. The Garden State is home to the largest sports wagering market in the US and a thriving iGaming segment.

Not Quite Official

Esports Entertainment’s partnership with Twin River is contingent upon the latter completing its $25 million acquisition of Bally’s on the Atlantic City boardwalk.

That transaction was announced in April as part of Eldorado Resorts’ effort to acquire the old version of Caesars Entertainment. Barring any unforeseen circumstances, it’s likely TRWH will seal the Bally’s deal because the operator was already confirmed by regulators as a financially suitable buyer for other former Eldorado venues.

Upon the acquisition, Twin River acquires the right to three online sports betting skins in New Jersey, leading to the creation of this partnership,” according to Esports Entertainment.

TRWH teaming up with Esports Entertainment is something of a departure for the former, as some of its other sports wagering partnerships involve some of the biggest names in the industry. For example, the Rhode Island-based operator has three sports betting licenses in Colorado, two of which involve DraftKings and FanDuel.

Reading the Tea Leaves

It’s speculation at this point, but one reason TRWH may have decided to link up with Esports Entertainment in New Jersey is esports.

The company offers secure esports wagering and “intends to offer users from around the world the ability to participate in multi-player mobile, console and PC video game tournaments online for cash prizes.”

Earlier this year, a state assemblyman pitched a bill that would expand the state’s wagering offerings to include non-traditional skill games, such as esports.

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University of York professor David Zendle authored the study, which looked at the gaming and gambling habits of a representative sample of 1,081 UK adults.

The study found that 18.5 percent of respondents engaged in behaviors that were related to both gambling and gaming. That included spending money on loot boxes, but also activities including social casino games, esports betting, and watching others gamble or open loot boxes online.

The term “loot boxes” refers to any element in a game where players purchase (either with real money or in-game currency) a randomized reward that they can open without knowing what they will receive. The rewards can range from cosmetic items to players for multiplayer modes in sports games like FIFA.

Study Links Video Game Activities to Problem Gambling

The study also measured gambling tendencies in participants. Zendle found a significant link between video-game related gambling practices and problem gambling. Several individual behaviors shared that link as well, including watching gambling on Twitch, social casino spending, and esports betting.

These findings suggest that the relationship between gaming and problem gambling is more complex than many people think,” Zendle said in a statement. “When we go beyond loot boxes, we can see that there are multiple novel practices in gaming that incorporate elements of gambling. All of them are linked to problem gambling, and all seem prevalent.”

Zendle called for closer scrutiny of what he called “loopholes” that allow some aspects of games to avoid being regulated as gambling.

“For example, social casinos are ‘video games’ that are basically a simulation of gambling: you can spend real money in them and the only thing that stops them being regulated as proper gambling is that winnings cannot be converted into cash,” Zendle said. “We need to have regulations in place that address all of the similarities between gambling and video games.”

Zendle was among a number of academics from the University of York who contributed to a House of Commons inquiry last year which led to a report calling for loot boxes to be regulated as a form of gambling. Zendle also contributed to the recent House of Lords select committee report that made a similar recommendation.

Professor: ‘Apocalyptically Stupid’ Policy

Not everyone agrees that loot boxes amount to gambling.

If loot boxes are bad I want to know why they’re bad,” professor Andrew Przybylski of the Oxford Internet Institute told Business Insider. “I want harmful things in games to be identified and removed. But I just get a sense people are going to pat themselves on the back, say ‘job done,’ and a decade from now there’ll be more than 55,000 problem gamblers between the ages of 11 and 16.”

Przybylski also called a blanket definition of loot boxes as gambling would be “apocalyptically stupid,” because it would impact a wide range of games with very different elements.

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The Department for Digital, Culture, Media and Sport (DCMS) will this week launch a call for evidence on the consumable in-game devices found in popular video-game titles, amid concerns over their impact on children.

The director of the UK’s National Health Service Claire Murdoch said recently that loot boxes were “setting kids up for addiction by teaching them to gamble.”

The process will seek public views and evidence to help examine links to gambling-like behaviour and excessive spending in games. Findings will be considered alongside a review of the Gambling Act, the DCMS said.

In a move that would have far-reaching implications for the $7.2 billion UK video-games market, it’s anticipated that the DCMS is planning to reclassify loot boxes as gambling.

This would make video-game publishers subject to the same oversight as gambling operators unless they agreed to modify their games for the UK market.

What’s a Loot Box?

Loot boxes are consumable in-game devices that offer the chance to win desirable digital items, with the prize being determined by a random number-generator. Although they are encountered while playing, gamers can often pay a small sum — a “microtransaction” — to access extra boxes.

Detractors? — which in many cases includes gamers themselves — complain the system is addictive and that it apes the mechanics of gambling.

In some cases, a game is impenetrable unless a player splurges on loot boxes in the hope of winning special skills and weapons.

The UK Gambling Commission has previously said that although it has significant concerns about the mechanisms, it was “constrained by current legislation.”

But the DCMS has pledged to “revisit” the 2005 Gambling Act. After 15 years of market liberalization, the gambling industry is facing a public backlash in the UK, and legislative reforms will offer a window of opportunity for lawmakers to reconsider the nature of gambling in the modern age.

$23 Billion a Year

Some countries have already banned loot boxes — most recently Holland and Belgium — and games publishers have been forced to tweak their products for compliance in those markets.

In the US, the Federal Trade Commission is investigating whether consumer protections surrounding video games need to be strengthened.

Loot boxes have recently become a vast revenue stream for games publishers — worth some $23 billion per year, according to Juniper Research. In February, FIFA 20 publisher Electronic Arts (EA) announced to investors it had made nearly $1 billion from microtransactions alone in the previous quarter.

A University of York study published last year found that 71 percent of the most popular games available on the Steam platform employed loot boxes, compared with four percent ten years ago.

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