Dramatic unforeseen change has been felt industry wide recently, and shows no sign of ceasing, with the place of igaming and esports in the betting and gaming paradigm nudged forward amid global sporting cancellations.
Dan Gibas, CCO of EsportsConstruct, picks up this conversation with CasinoBeats to speak about a lack of exploitation, helping igaming operators get into esports betting and the cross-sell potential.
CasinoBeats: Can you provide a little background on EsportsConstruct and your own personal experience in the esports industry?
Dan Gibas: Mathias Schmedeshagen, CEO of EsportsConstruct, has been building products and services in esports for the last ten years. It’s Mathias’s experience in building a huge esports community of millions that led him to founding EsportsConstruct and then the first product licensing partnership with 188BET out in Asia.
EsportsConstruct really evolved the esports betting product over the years through this partnership by iterating frequent updated releases in response to A/B testing and real world customer feedback and analytics. EsportsConstruct’s product is a remix of what esports fans want and enjoy combined with sports betting – it’s an environment gamers feel comfortable to bet in.
The products coming of age was the ideal time to begin my direct involvement at the start of 2020. My objective has been to act as an advocate for the operators viewpoints in product design and then taking the product to a wider audience through a wider distribution network.
“If the gaming can go on then the esports betting can go on too”
My experience in the past with operators in the esports industry gives me great enthusiasm for the future growth of the product vertical because it appeals to people in our generation – the gamers – and we comprise a valuable target demographic for online gaming operators right now. I also see so much more opportunity in esports that are yet to be exploited, whereas many other product verticals seem to be struggling to innovate.
CB: How is the current global pandemic affecting the esports sector?
DG: Esports as an industry is soldiering on. Major events are suffering because of the lack of ticket and merchandise sales and their sponsors have signed up for offline exposure. COVID-19 will cause some casualties, but since the first events already seem to be adjusting themselves it looks like things are under fair control given the circumstances. ESL Pro League is up double digits in broadcast consumption, which is a good early signal given the fact that they are competing for attention in an increasingly crowded space.
Regular esports events such as daily competitions, small and mid-tier competitions and the daily routines of teams and players are less affected at this time. Travel restrictions take a toll, but esports lives online in the digital domain and so long as people can get power and internet then they have the tools they require to function.
Event operators will remember how to produce the live streams from smaller setups as they used to do only a few years ago. Players can compete from their homes and teams can organise the majority of their operations with the help of software tools. This is all very much inline with the fighting spirit of people having to stay at home in isolation at the moment. If the gaming can go on then the esports betting can go on too.
“Now it is possible to throw a fully branded esports betting product live in no time at all”
Some well timed innovation now can pay off, we are seeing the likes of F1 races in esports for the first time and as more and more players and teams around the world take time at home, I think it’s a great time to ask them to have a few games online and maybe even try and finish their leagues for charity. This is not happening as yet, but like I said – esports is full of opportunity to innovate.
Lastly, we are seeing too many igaming operators struggling with a lack of markets to bet on. In some cases there has only been table tennis and esports available for long periods. There should be a rush on now in every boardroom to adapt product line-ups and consider going into the esports vertical.
A few years ago this would be tough at short notice, but now it is possible to throw a fully branded esports betting product live in no time at all. From an operator’s perspective it’s a great step towards mitigating sportsbook losses as well as a chance to claim a space vertical with a new revenue stream.
Likewise, if you are already taking bets on esports, then it’s a great time to move over to a dedicated esports betting product that appeals to gamers rather than try and sell esports bets from a small sub-section of a sportsbook product that’s usually best suited to football betting.
CB: What opportunities are available for traditional online operators who haven’t previously considered esports as a vertical?
DG: In direct business terms – this is an entirely new revenue stream coming from an ever growing market and rich segment of potential customers. It’s not so alien to traditional online operators that it becomes a challenge – it’s not so far removed from the concept of sports betting.
“I think the esports experience is as valuable as the igaming experience”
Then there is the cross sell opportunity right away if you were to launch an esports product – you can expect between 18 per cent to 25 per cent of your existing customers to start to frequently bet on esports. I’ve seen some operators in the past struggle with growth in RNG/slots once they hit certain saturation points in the market – this happens to be an ideal cross-sell target too, in case you don’t have sportsbook customers.
Now when you consider margins, that factors in where you prefer to direct your customers to spend their money and therefore how you position and promote products. With esports you can achieve 5 per cent margins while being competitive and with comfortable risk levels. That’s a margin referred to as 95 per cent RTP over in casino terms – and that is a good figure!
If that’s not attractive enough you also have the high average spends coming from customers in this demographic and also the large number of betting opportunities and ongoing events – all year round. So less seasonal issues and plenty to bet on – it makes a good case to give it a try.
Finally the barrier to entry now is low, you can get into the market in around a months time.
CB: What consideration do operators/ platforms need to give before entering the esports sector and what are the biggest challenges facing operators and platforms entering this market. How can they be overcome?
DG: Ensure you have a strong team of marketing and operations people who are capable of being motivated to work with esports, maybe even specifically hire people who have been a part of the industry for a number of years. I think the esports experience is as valuable as the igaming experience but I wouldn’t turn down candidates without igaming experience – they can really understand the market and that is what you need.
“I also see so much more opportunity in esports that are yet to be exploited”
Some operators have partnered with former professional esports players and community volunteers for many years now and they are thriving. Having a respected and valued relationship with the esports community should be listed as a task in the product launch checklist. Any viewpoints around unhealthy profiteering or not giving back to grassroots will be met with scorn just like it would be within other established sports communities.
Esports as a betting product isn’t yet well documented or analysed compared to other products – this means you will need to do more homework and bring in more experienced talent too from the beginning. You will also likely need to be prepared for some trial and error in marketing efforts and as usual need a healthy marketing budget to do things well and form partnerships with the better affiliates, teams, players and events.
CB: If the opportunity presents itself, how quickly can operators / platforms add esports?
DG: Based on my experience the biggest challenge operators face when onboarding a new product is securing the position in the pipeline and the resources to go with it. Let’s hypothesise that we are at the front of your integration queue. I’m glad to say that with EsportsConstruct we can get the product live in around about two weeks to one months time with fast tracks in three concurrent streams for:
1) Training on product and marketing operations.
2) API integration.
We can progress these all in parallel now to get to market faster. Commercials are revenue share based so we partner in success in esports – to grow the sports market together. In terms of resources, you may run with what is needed and scale up as the product revenue grows – you can get started with just one key operator for the product and train your existing marketing and operations teams to support it as part of their SOP.