George Shamugia: eSports is the winning entry strategy for the U.S.

George Shamugia: eSports is the winning entry strategy for the U.S.
George Shamugia: eSports is the winning entry strategy for the U.S.

George Shamugia, CEO, Singular.

The US market is undergoing increased changes in regulation with more and more states opening for online gambling. However, many of the operators who have entered the US market struggle to fully address the unique characteristics of the US players.  

Trying so hard to copy models from existing EU operators to replicate their success, operators may have overlooked one of the most lucrative areas for the US market – eSports.  The numbers below show that the US is the focal point for eSports driven mainly by the younger generation. 

eSports vs traditional sports in the US

In recent years, eSports have been gaining traction among sports fans, even leveling up with conventional sports leagues. The eSports tournament prize pools already exceeded $30M (2019 Dota International) far outweighing the combined prize pool of other major sporting events, such as the Tour de France, Cricket World Cup, and The Open. 

The U.S. is number one country when it comes to eSport revenues generating 37% of the total global revenues. The most interesting part is that eSport maintains a growth in times when Monday Night Football (American) is down from last year for 24% (Source: Sports Illustrated, 2019).  Additionally, in 2017, more than 360 million viewers watched League of Legends alone, significantly overtaking the Super Bowl viewership. 

The millennials drive the eSports hype

The Washington Post has reported that eSports is as big as American football for young Americans aged 14 to 21. According to Newzoo’s research, 52% of eSports viewers are aged between 21 and 35 and 27% of viewers are aged between 10-20 years. Even the educational sector is embracing the hype with 78 Universities across the US forming eSports teams and granting scholarships for college. 

This situation boosts the eSports potential creating opportunities for operators to attract and engage the millennial generation. If we take a step back and look at the big picture, eSports may be a winning entry strategy for the US market. 

But this is not as straightforward as it seems. eSports have “limitations” that must be addressed to utilize their full potential.  First, there is a significant lack of games to bet on and limited availability of In-Play betting. The integrity of eSports games on which wagering can be offered is another pressing issue. As we speak, a lot of work is being done by organizations such as ESIC (ESports Integrity Coalition) to address this issue. Also, cybersecurity company Kaspersky has recently announced that it will launch a cloud-based solution to tackle eSports cheating.

Creating tailored eSports offering

Operators must dedicate resources to raise awareness and organically grow their eSports offering. 

iGaming operators must understand that building trust with their players will not happen overnight. The experience must be more interactive with the ability to watch all the games live on a platform together with an in-game chat. Having an active social network or chat option helps betting site monetize better, since players who socialize spend more time and eventually, more money on site.  

Integration of betting widgets with popular 3rd party platforms can easily broaden their audience and increase the revenues. Twitch, the most popular video games streaming platform with 10M daily active users watching content presented by 2.2M streamers is a solid recommendation. One can develop an extension that allows users to wager their Twitch Bits on games they are watching, instead of real money. Since more than 50% of millennial video gamers own cryptocurrency, offering cryptocurrency as a payment option is crucial for success.

The market for Head-to-Head betting is also showing promising potential for growth. The most prestigious startup accelerator Y Combinator has recently made few investments in startups (e.g. Players’ Lounge) which offer p2p betting for eSports. Also, the rap superstar Drake and other Silicon Valley investors, including Marissa Mayer and Strauss Zelnick have made similar investments.

Besides offering tailored and unparalleled eSports betting experience, companies must start building communities by organizing tournaments and sponsoring eSports teams or even creating one of their own.  Note that, eSports fans prefer to bet with a brand that is continuously sponsoring tournaments and events. All these steps will help a brand to attract a lucrative audience of eSports fans and gain their trust.

Taking into consideration the growth rate of eSports and the declining popularity of traditional sports, one day eSports may even become bigger than any other sport. According to Goldman Sachs report, eSports will double in the next three years reaching $6 billion (fact.mr) by 2028. For most iGaming operators eSports betting is the 5th and the 6th most played sport generating 5-8% of the sports-betting turnover (Data published by 1xBet, Parimatch, Favorit Sport). The synergy of wagering with video games and eSports will create a completely new form of entertainment, something that has never been done before.

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