esports UNLOCKING THE RAPIDLY GROWING OPPORTUNITY
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1 esports UNLOCKING THE RAPIDLY GROWING OPPORTUNITY 1
2 esports BETTING: UNDERSTANDING THE POTENTIAL esports has arrived. While still a rapidly expanding market, esports is already a huge industry with prize pools worth millions of dollars, millions of viewers in every corner of the globe, and superstars emerging among the elite players. esports, or electronic sports, is the umbrella term for organised, competitive computer gaming, usually between professionals. esports genres are broken down into real-time strategy (RTS), first-person shooter (FPS), multiplayer online battle arena (MOBA) and fighting games. The biggest titles include League of Legends, Dota 2, Counter-Strike: Global Offensive, Hearthstone, and StarCraft II. How is it being consumed? Major events are held offline but viewed by millions of fans across the globe. Video platform Twitch generated over 2.2 billion viewing hours from its top 100 games last year and the top five games were all esports titles. Twitch attracts over 100 million viewers a month and over 20% of them are watching esports. Sky and ITV have recently invested in the launch of Ginx esports TV, the UK s first 24-hour esports channel. It s already bigger than you think The esports economy was worth as much as $500m in 2016 and is predicted to grow to $1bn by 2018* 1 The annual prize pool is $125m and is expected to grow to over $280m by 2020* 2 But is still growing There were 4,000 competitive esports tournaments in 2015, with over 5,500 expected this year.* 3 There is an estimated core audience of 131 million esports fans and a further 125 million occasional viewers who tune into the big international events.* 4 1 Deloitte Global 2 Eilers & Krejcik esports Betting whitepaper 3 Eilers & Krejcik esports Betting whitepaper 4 Market research firm Newzoo 1
3 WHAT IS THE OPPORTUNITY FOR SPORTSBOOK OPERATORS? esports can become a crucial revenue stream for bookmakers. And here s why Betting goes hand-in-hand with professional and elite competition. It is becoming a spectator sport: 40% of all esports viewers do not play any of the top esports franchises themselves. The amount of content, events and media coverage is exploding. The maturing ecosystem of professional leagues, players, live events and organisations means fixed-odds betting on esports is primed for growth. What is the core demographic? esports appeals to a narrow and desirable demographic: *6 75% are millennials aged and 82% are male* 5. Over 30% of esports fans have engaged in some form of online betting 5 Market research firm Newzoo 6 Eilers & Krejcik esports Betting whitepaper 2
4 IN-PLAY BETTING: THE KEY TO UNLOCKING GROWTH esports is the future of live entertainment With tens of millions of fans watching esports events live, being part of the in-play betting trend is vital for success.* 7 As with traditional sports such as football and tennis, in-play markets will drive the growth of the esports betting market figures from major operators suggest in-play is rising to over 70% of turnover, driven by the shift to mobile devices. For many existing customers, in-play already accounts for between 60 and 70% of esports betting turnover. As bookmakers become more acclimatised to esports, market volumes and turnovers are predicted to grow rapidly. In-play esports betting is a prime opportunity for operators to capitalise on the growing trend towards quick-fire markets. Quick-fire markets such as Team to Slay the Next Dragon, allow customers to bet on specific events that could happen within no more than a five minute period and are typical of the all-action nature of esports. 7 Market research firm Newzoo 3
5 What do customers bet on? $550m Amount predicted to be wagered on esports betting sites in 2016* 8 League of Legends 38% ($209m) 70% 60% BETGENIUS EVENT VOLUME / WAGER TOTAL Event Volume % Wager Total % Counter-Strike: Global Offensive 29% ($159.5m) Dota 2 18% ($99m) Starcraft 2 7% ($38.5m) Other 8% ($44m) 50% 39.10% 40% 30% 20% 24.30% 20% 26% 10% 21.80% 23% 10.40% 0% League of Legends 8 Eilers & Krejcik esports Betting whitepaper Dota 2 Counter Strike: Global Offensive Call of Duty 13.90% 4.30% 9.70% Starcraft % 5.60% Others 4
6 THE BETGENIUS SOLUTION In 2015, Betgenius launched the world s first comprehensive pre-match and in-play esports betting product. Through the development of sophisticated models, Betgenius can generate the most accurate live esports prices and industry-beating margins across a wide range of both pre-match and in-play markets. More than a dozen clients are now live with our esports product including Sky Bet, Danske Spil, Betway and Betfair. Betgenius offers up to 50 in-game markets on multiple re-occurring objectives for over 500 events per month in eight different game titles. We offer: Game supervision we track start times, postponed games and roster changes Market creation we provide pre-match odds for all the biggest games In-play markets and live trading we trade a huge range of in-play markets, driving maximum engagement for the full duration of the event Resulting we grade bets and provide all match results faster and more accurately than anyone else in the market Education on betting rules and market types we provide comprehensive education on the market types being offered and winning conditions Setting wager limits to help risk management we help operators set wager limits in accordance to prize pool sizes 5
7 WHY BETGENIUS? Partnering with Betgenius means operators can partially or fully outsource all trading, management and content solutions to run a market-leading esports betting product. We are the global leader in live esports betting Our unmatched depth of markets maximises the turnover potential of the product We have a team of 15 dedicated esports traders, based in Tallinn Engaging in-play markets at all stages of the game We result faster than anyone else in the sector Highest market uptime in the betting sector The table below demonstrates the number of esports markets for different games offered by Betgenius: esports EVENTS & MARKET TYPES LoL CS Dota2 COD HotS SC2H SO verwatcho thers Live Events/Fixtures Market Types per Map 0 6
8 MARKETING SERVICES Betgenius offers an exclusive and low-cost solution to marketing your esports betting product, ensuring the right players are acquired at the lowest possible CPAs. What do we offer? Stream Partnerships: Through our network of streamers successful esports players and gaming community celebrities with thousands of live online followers we connect sports betting brands with the right audiences. The expertise and versatility of our network partners means we can do this on a demographic-specific level and maximise the effectiveness of clients marketing spend and brand recognition within the esports community. Our team of esports specialists proactively coordinate the schedules of streamers to fit with the live betting content available at our operator clients sites. Team & Player Sponsorships: Just like their mainstream counterparts, esports athletes are global stars in their specific franchise. Through multiple partnerships with esports organisations, Betgenius can help leverage sportsbook brands though team or player sponsorship deals. Other complementary marketing services include: Ad serving Programmatic Behavioural Data Management Platform Creative 7
9 INTEGRITY - SUPPORT AND EDUCATION Through our Sport Integrity Monitor service, Betgenius works with sports federations, regulators, government agencies and betting operators to manage sports integrity and combat both match-fixing and betting-related corruption. Within such a rapidly expanding market, educational workshops are key in order to protect the integrity of esports. Although players are thoroughly educated in technical manners such as how to avoid DDoS attacks, there remains a lack of understanding across esports of betting and specifically how betting fraud drives match-fixing. These educational services will be provided through live presentations either over Skype or in our full-time operating basis in Tallinn. Workshops will seek to clarify market types and their respective regulations, while also educating bookmakers on the following: How to recognise match and spot-fixing Match-fixers approach and how they recruit players and officials Insider information and the associated risks Consequences both financial and personal Relevant case studies FURTHER INFORMATION Moritz Maurer, Head of esports at Betgenius, has over five years experience working in the industry. Since joining Betgenius in 2015, Moritz has been integral in producing the industry s first comprehensive pre-match and in-play sports product. For further information, please contact Moritz at moritz.maurer@betgenius.com Moritz Maurer Head of esports 8
10 esports 9
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