SBC News Voice of the Sports Betting Industry
Finding the right niche and audience is a challenge for any entrepreneur in betting, but esports operators such as Canada’s Rivalry have been gifted with a unique advantage in some respects. 
This is due to the audience for such products being largely from the Gen Z and millennial age brackets. As the firm’s CEO Steven Salz explained, effective engagement with this demographic through a well-planned strategy has driven the Rivalry’s trajectory during 2022.
Engaging your audience
“Rivalry has strong brand leadership and engagement with millennials and Gen Z, particularly for esports betting, and more than 80% of our active customer base is under 30 – the majority are in their mid 20s,” Salz observed, detailing how the firm’s marketing and business model is tailored to this demographic.
Rivalry is clearly a company that takes in-house development seriously – Salz told SBC that although some third-party services are leveraged – such as odds providers – the bulk of what customers see on Rivalry’s sites is of the firm’s own design and construction.
This includes ‘quirky, unique and playful features’ to better engage customers, such as a retro PC design to its casino platform, customisable wallpaper, and MP3 player add-on.
Taking on this as Salz put it – one of their ‘bizarre’ and entertaining approaches to engagement, Rivalry’s designers also came with a ‘helper’ character in the vein of Microsoft’s famous paperclip.
“The last big pillar is media and content,” Salz added. “The demographic we target really taps into this, and we’re always trying to elevate better. We are very deep into internet culture and meme culture, myself included.
“We want being a partner of Rivalry, whether that be an influencer or creator, to connote a certain level of success in your marketing, and although we definitely have that in some of our markets we can always do better and become a creative powerhouse.”
Pursuing this strategy and its goal of becoming ‘the Red Bull of the internet’, Rivalry has set out to take on a different form of partnership with the likes of Twitch streamers and influencers aside from the traditional jersey sponsorship route.
For an online focused company, Salz argued that the old-school approach was ‘not really wise’, instead opting for a strategy where the firm can benefit its partners – where at the end of the year the company’s follower numbers will be up and these viewers will be more engaged via built in activations.
Any trouble on Twitch?
For a firm which strives to market via influencers, content creators and streamers, there are some important hurdles to address, however.
Notably, Twitch recently imposed a ban on casino content promotion on its platform, although as Rivalry is an esportsbook-oriented operator this has, as Salz explained, not impacted its marketing model as much as others.
If anything, he continued, Twitch’s decision is a positive development for the licensed industry as a whole, as it has weeded out the ‘bad actors’ which were making use of the site.
“There are a number of bad actors who have not had the proper licence protocols in place, and Twitch has named them – you can go to Google or YouTube and find out exactly who they are,” the CEO continued.
“We were really happy to see it, as something that has been frustrating for us since we launched in 2018 was that we have always worked as a responsible, licensed and publicly transparent operator.
“One of the first teams we partnered with, Fnatic, we worked on a campaign with them on why responsible betting and proper licensing for esports betting matters.”
As a company which has made responsible betting a priority, Salz added that the presence of less reputable firms on platforms such as Twitch was always a cause of frustration.
Adding to this, many regulators Rivalry was in contact with were having trouble clamping down on these operators, and so Salz held Twitch’s ban in high regard due the move being ‘the first meaningful action to protect esports bettors against the harmful actors’.
Finding your edge
Although offering both esports and traditional sports betting products, the former market is Rivalry’s speciality – 90% of its sports betting handle was driven by esports in Q3, the firm’s most profitable to date, but Salz estimated that 30% to 40% of its monthly active esports bettors do place wagers on old school markets.
“We’ve always known that from the beginning. The traditional sports betting market is very crowded, and there are expectations from a traditional sports bettor that are very mature, the average age is much older and acquisition and retention are more expensive.
“From the outset, we decided that traditional sports was something we didn’t really have an edge in, whilst everyone at Rivalry are huge gamers and esports fans.
“You have to build something that you yourself would want to consume, and we’ve always found that success is in building something that you yourself have a passion for. It’s really in the DNA of the company, we’re all very plugged into gaming and internet culture.”
This is not to say that traditional sports is not an area of interest for Rivalry, it is simply just not at the top of the funnel for the firm – esports comes first, and then if the company’s customers are interested in betting on football, for instance, the option is there.
Unsurprisingly, the global sports betting phenomenon of the FIFA World Cup has been a notable draw for Rivalry, with Salz underscoring that this has been one of the first traditional sports events the firm has really honed in on.
“The World Cup is universal, both traditional and esports fans watch it, and in our markets we have been running content around it – for example some of our League of Legends players have been doing launch parties around matches.
“With this business, you need to offer people everything and they can pick and choose what they want. One of our first mistakes as new entrepreneurs back in 2018 was to go for a ‘chef’s tasting table’ as opposed to a ‘buffet’ – it was a mistake not to have traditional sports on first launch, but we do everything now to make sure that it is the best product.”
The payoff
As Rivalry observed in its Q3 trading statement, engagement with millennial and Gen Z esports punters has proved a success for the firm, as revenue climbed 93% year-on-year from CAN $3.7m to CAN $7.1m.
As 2022 draws speedily to a close, Salz explained that the firm plans to maintain a strong focus on operating leverage, whilst making investments in engineering and resources, building its IP and continuing in-house development of its casino platform.
“We knew it would bear fruit over time with the right investment, and Q3 has really demonstrated that,” he concluded.
“Our objective was to get off the ‘hamster reel’ of having an increased marketing spend or increased bonuses and promotion having a linear relationship with company growth.
“Moving forward, we aim to continue building great brand equity and a great product, gaining more torque and organic brand growth, and that’s really what we saw in Q3.”
