SBC News Voice of the Sports Betting Industry
Citing high confidence in its business model and marketing, Rivalry is anticipating strong trading in 2023 following a successful close to last year.
Having recorded its first profitable quarter in Q3 2022, Rivalry now aims to further consolidate itself in the international esports betting scene, in which it is an active licence holder in Australia and Canada. 
In a letter to investors ahead of the group’s Q4 2022 results, CEO Steven Salz underscored that the alignment of values between traditional betting and esports/video games has provided a strong bedrock for success.
“In a world where live-service games are the standard and long-term player engagement is the new benchmark for success, Rivalry is poised to play a prominent role in the future of esports,” he said.
“Betting activity translates into the enhanced viewership, engagement, and economics that are directly aligned with the KPIs of esports and gaming stakeholders, and those represent significant long-term tailwinds for our business.
“We believe an intimate understanding of these audiences and cultures will shape the next generation of great consumer products. It is with this understanding that Rivalry is able to tap into a global gaming audience and drive betting activity among the 532 million esports viewers worldwide.”
With the global esports betting sector generating CA$83bn in 2022, with projections for a CAGR of 10.2% moving forward, and with the video game industry now valued at $197bn, Rivalry believes that the stage is set for high profitability.
Central to the group’s plans for 2023 is its approach to marketing and engagement, particularly with Gen Z audiences – something which Salz broke down in an interview with SBC News last month.
In his recent letter, the CEO noted that 87% of Gen Z consumers play video games weekly, whilst there is a larger population of 3.1 billion gamers worldwide, meaning customers are not in short supply.
The group’s strategy, according to Salz, is to ‘scale through word of mouth’ alongside ‘organic market entrenchment of brand equity’, reducing dependency on legacy tactics such as offering bonuses.
He explained: “This approach helped drive a 50% reduction year-over-year in bonus/promotional spend relative to our revenue, supporting our below-market cost of customer acquisition and further reducing our reliance on linear net new spend for growth.
“This is continuing to create the operating leverage that has set Rivalry on a path toward profitability. Gaming and internet culture guides this successful player acquisition strategy and allows us to engage with a deeply valuable and nuanced demographic of users that legacy operators aren’t equipped to serve.
“There is tremendous value gained by participating in these communities and cultures, building lasting brand affinity among gaming fans who are quickly emerging as the consumer economy of the future, and similarly by attaching ourselves to the pervasiveness and virality of the internet.”
Eyeing up momentum now the new year is upon us, Rivalry plans to expand its suite of esports titles and markets, as well as launch a mobile app in its regulated markets of Australia and Canada.
Geographic expansion is also on the table – although it is not clear when this will take place. In his discussion with SBC in December, Salz did note that the regions of Europe, Latin America and Asia all pose opportunities.
Rivalry’s content and creator partner programme will continue to play a key role in its 2023 roadmap, Salz added, as the firm seeks to expand both customer reach and engagement.
This all serves to achieve the company’s ambition to strengthen its leadership position in the burgeoning esports betting space, as well as attract new investors.
Having achieved over 30% month-over-month revenue growth and cut its promotional spend in half in 2022 – increasing revenue 130% YoY to $21.7m in Q3 in the process – the TSXV-listed business is keen to keep the pace over the next 12 months.
Salz concluded: “I’m extremely proud of the differentiated approach Rivalry has taken from day one and what it has enabled us to achieve, creating a truly distinct product and brand that is driving operating leverage and bearing fruit across the business.
“As we move into 2023, we’re eager to continue demonstrating the same operational excellence which has enabled us to stand out in a deeply competitive industry.”
