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Scott Longley – Eyes Wide Open: eSports taps into a new world of betting

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Scott Longley

Reporting from last week’s EIG Berlin Expo for SBC, Scott Longley examines the commercial contexts and conditions for betting operators targeting competitive eSports, a leading theme and discussion on the EIG floor…

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The main issues of the debate around the phenomenal rise of eSports and what it might mean for gambling companies looking at leveraging that interest were given an airing at the second day of the EiG conference in Berlin.

Founder and chairman of the eSports league ESL Jens Hilgers summed up the ascent of the format when he described his business as a “crazy idea that turned into a billion-dollar market” and in the process grabbed front-page headlines, including recently in the New York Times.

Hilgers made the point that one of the factors that have helped turn eSports into the fastest-growing spectator sport in recent years is the appeal the format has for the millennial generations. “That is the factor that will propel eSports into the future,” he told the audience.

In part this is the same audience the gambling industry is hoping to attract to their services, according to panellists speaking after Hilgers, and it should therefore be no surprise that the gambling operators in particular have latched onto the format as a betting medium.

However Rahul Sood, Founder & CEO of start-up eSports-only betting company Unikrn, pointed out that the crossover with existing young gamblers was limited for eSports.

“There is a bit of crossover between eSports gamblers and other sports,” he said. “But a lot of people that are into eSports probably don’t care all that much for football and probably don’t even know what one looks like in some cases.”

Citing figures from a recent report released by Eilers Research on the potential of the eSports market, Wouter Sleijffers, chief executive at professional eSports agency Fnatic, pointed out that there was predicted to be over 165m eSports enthusiasts by 2018. He went on to suggest that when this is benchmarked against other US sports such as major league baseball and basketball and even NFL it has the potential to dwarf interest in classic sports in terms of potential viewer number.

One of the leaders in the area of betting on eSports is Pinnacle and the company’s Head of Sportsbook Marco Blume pointed out that within the last two years or so the format has risen out of nowhere to be the seventh most popular sport within the Pinnacle offering. “It has grown from a handful of wagers,” he said. “Right now the betting community is waking up. I’m sure the regulators will follow. It is very different.”

He concurred with Sood that the audience had very limited interest in betting on anything other than eSports. “Many customers come to us for eSports, and they stay with us for eSports,” he said. “Some will bet on other big sporting events, but not the everyday sports.”

Sood said Unikrn was concentrating on producing an experience that was suited for the new audience. “Visually eSports can be jarring, so we are looking at creating beautiful data graphics.”

He added that the company has also added a virtual token system for customers to enjoy free-to-play betting on the site. “Unikrn started this a month ago, and there is clearly a great appetite for it.”

The panel also touched upon the subject of so-called skin betting, which involves eSports users betting in-game virtual goods on the outcome of match-ups. Hilgers from ESL pointed out that the emergence of skin betting was “lowering the hurdle rate for people to pay to bet”. Sood added that as far as the players were concerned there was “real value in these skins” and that when it comes to betting with the virtual goods “you can’t put the genie back in the bottle”.

Unikrn is backed by Australian gaming giant Tabcorp and Sood said that his firm had specifically opted to get them on board as an investor because of their regulated history. “We view eSports as we would real sports; we don’t play in unregulated markets at all. We chose Tabcorp because of their commitment in this area.”

Taking a sideswipe at the recent furore surrounding daily fantasy sports in the US, he noted that “we never really bought into fantasy sports at all; it was building a business around a loophole.”

Blume from Pinnacle said the company was hoping to help the eSports community that as with skin betting, betting on the format was simply a way to enhance the experience of watching matches. Sood agreed that the challenge for anyone offering betting on eSports was to convince those who were already engaged with the concept that the betting offer was also part of the wider eSports community. “To reach the audience, you have to be authentic,” he concluded. “We are able to talk to the community; you can’t just put up betting lines and hope you are going to attract them.”

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Scott Longley reporting from EIG Berlin

EIG33

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