Posted on: March 21, 2022, 08:26h.
Last updated on: March 21, 2022, 09:07h.
Esports Entertainment Group, a Malta-based gaming and sports betting firm, believes it holds the secret to luring younger people into casinos: competitive video gaming.
Esports Entertainment facilitated Atlantic City’s first skill-based esports betting event over the weekend. The two-day Madden ’22 tournament was hosted at Hard Rock Hotel & Casino.
The Press of Atlantic City reports that “hundreds of gamers” showed up to compete in the Madden video game tournament, vying for a chance to win $9,000 in cash and prizes.
In January, Esports Entertainment became the first esports betting group to become licensed by the New Jersey Division of Gaming Enforcement (DGE) to facilitate wagering on competitive video gaming. Over the weekend, the Madden competitors were permitted to wager only on themselves. The DGE additionally allowed Esports Entertainment to give each entrant $25 in betting credit.
Esports Entertainment debuted its LANDuel esports betting platform in conjunction with the Madden showdown. Company CEO Grant Johnson says the network handicaps players based on their past performance to assure that competitors of similar skillset are paired against one another.
Casinos across the country have spent much time and resources over the past decade trying to figure out what exactly the millennial seeks in a casino. Slot machines have been proven to exude much less attractiveness to younger people, and that presents a grave concern for the future of the US gaming industry.
The proliferation of sports betting across the country has helped bring in more 20- and 30-year-olds. But sports betting is a low-margin business for the house. Johnson believes esports is the answer.
What we’re presenting here to casino owners is a new product to get a different demographic into the casino. In that room, there’s hundreds of 20-something-year-olds, which they’re [casinos] not getting right now,” Johnson told the Press of Atlantic City of his Hard Rock esports turnout.
Johnson says 256 players competed over the weekend in the Esports Entertainment Madden tournament. He explained that Hard Rock officials and DGE personnel were on hand to observe the esports operation and betting component.
Johnson added that he hopes the success of the Madden tournament will spur more casinos into hosting esports tournaments, and that the DGE continues to recognize the importance of approving legal betting on the games. But the clock could be ticking on Esports Entertainment, a company that has endured a rocky five years that has resulted in some analysts questioning its liquidity.
Esports Entertainment (NASDAQ: GMBL) shares have tumbled from more than $44 in July of 2017 to less than $1 this week.
“With minimal cash ($1M at Dec’ 31), GMBL is relying on its ATM to fund monthly cash burn of ~$1.3M, where $16M remained on the ATM as of Feb. 18,” Roth Capital analyst Edward Engel said in a note last month.
However, Engel began his Esports Entertainment coverage with a “neutral” rating, with a $1.40 price target. The stock was trading at $0.81 as of this writing.