Esports Entertainment Group (EEG) has undertaken its first investment since refocusing its commercial outlook and strategy to orient around B2B operations back in April.
The company has signed a binding letter of intent with Drafted.gg to secure a 30% minority stake in the Czech Republic-based esports content producer. This will be followed up by a revenue share agreement and continuing ‘strategic collaboration’ between the two firms.
Drafted.gg operates two production studios, one in Prague and one in the UAE, and specialises in producing esoccer, cricket and basketball titles, with matches live streamed across Europe and Asia via Twitch and YouTube.
Alex Igelman, EEG CEO, said: “This transaction supports Esport Entertainment’s strategy to embed wagerable content into our expanding esports and igaming offering.
“This initial investment and collaboration with Drafted.gg allows us to seamlessly add a best-in-class provider of 24/7 esports content and wagering to the company’s robust ecosystem.”
Igelman added that EEG anticipates acquiring the remaining 70% shareholding in Drafted.gg, subject to achieving certain targets during the opening months of the partnership.
EEG will evaluate its next steps based on the performance of Drafted.gg’s esports content during the ‘first phase of our collaboration’ as well as its own ability to successfully onboard a debut US sportsbook client for the platform.
Regardless, Igelman asserted that EEG is ‘confident in our ability to successfully onboard Drafted.gg content with leading US sportsbooks’, as B2B opportunities in North America become a focal area for the Malta-based company.
So far this year, EEG has been embarking on a rollback of its B2C operations to pivot and refocus on the B2B side of its business, particularly regarding sports betting opportunities in North America.
The group sold European online sports betting platform and casino BetHard for €9.5m in October 2023, following the closure of multinational esports betting operator Vie.gg and liquidation of Argyle Entertainment, operator of the SportNation and Red Zone properties.
This also serves another goal for the firm, that of reducing costs – the immediate impact saw debt reduced by £27.1m as of April 2023. Net losses were further reduced in Q2 2023, having fallen 68% year-on-year from $102.2m to $32.3m, although group-wide revenue also dropped 60% from $58.4m to $23m.
Igelman continued: “The company’s recent focus has turned towards developing initiatives to further broaden our esports and igaming solutions in order to create a more comprehensive, end-to-end offering of online betting options for our customers.
“Today’s announcement perfectly complements our impending Delasport sportsbook offering and our collaboration with Oddin.gg, a leading esports betting solution entity.
“Through these relationships, and coupled with Drafted.gg’s live esports content, the company has built a comprehensive ecosystem for the benefit of our clients and customers.”