Making waves in the US
When it comes to esports betting, Esports Entertainment Group is undeniably leading the way in the North American market. Now, the company has just hit another major milestone, launching North America’s first licensed esports-focused betting site in New Jersey last week:
The launch seems to be just the beginning of EEG’s US journey, with the firm keeping a firm eye on other states for its next phase of growth.
In light of its groundbreaking New Jersey launch, VegasSlotsOnline News sat down with the company’s CEO Grant Johnson to discuss the move, along with his expectations for esports gambling.
Firstly, can you tell us a bit about EEG and how the company has grown in your time as CEO?
The journey actually started in 2015, but it wasn’t until 2020 that we got listed on the NASDAQ. Then we raised the necessary capital to really have some explosive growth.
we acquired ggCircuit, Helix, and Genji
Last year, our focus was on mergers and acquisitions. We acquired SportNation in the UK. After that we acquired ETL, a tournament software platform for gaming, before purchasing LuckyDino, an online casino mostly focused on the Nordic area. Then we acquired ggCircuit, Helix, and Genji, which is all about esports and infrastructure in the North American market.
From that time until now, we have focused on getting all the synergies. Our European operation is pretty much all gambling-centric. For North America, because all of the big sportsbooks are spending hundreds of millions, sometimes billions of dollars on betting marketing, we elected to focus more on the emerging esports and gaming market.
Last week, you launched your esports betting product in New Jersey. How important was this milestone for the company?
It’s huge. It does a number of things. Firstly it establishes the credibility of the company. Being the first licensed esports-focused betting platform in the North American market, it’s a big milestone for us. Getting our software through the rigorous testing process of the New Jersey Division of Gaming Enforcement (DGE) establishes us as a credible operator in the space – which mostly consists of grey market operators.
New Jersey is in the vanguard of innovation when it comes to gaming, leading the charge to get sports betting out through the Supreme Court. Our launching in New Jersey seems like a natural continuation of that. The governor and the DGE itself are both very pro gaming and esports.
My process is to lead as opposed to following. There are a lot of advantages to being first – you establish credibility and dominance in the area. That’s why it was such a big deal for us as a company.
What are your expectations for the New Jersey market? Is there a real appetite for esports betting in the state?
We know that New Jersey has a very active esports and gaming community because Dignitas is there, we have our Helix center there, the innovation center has been set up, and the university is very focused on getting esports in the curriculum. There is an appetite from the governor all the way down.
New Jersey is very strategic geographically
You also have the two major cities very close to the New Jersey market, New York and Philadelphia. If you live in New York you can go into New Jersey, set up an account, place a wager, and go back to Manhattan. It has the 11th largest population, but if you include those two giant cities right across the river, New Jersey is very strategic geographically.
Are there any states you’re looking at for expansion next?
We’ve been involved in the dialogue in several states. At this point we’re looking for strategic partners. It is very expensive as you can imagine to get a license and set up operations and all the elements that go along with it, especially in states that have a skins system.
When your offering esports, which none of these operators have, it seems it’s very expensive. But that’s not every jurisdiction. Some are talking about separate licenses for esports, so we’re going to focus on those states, or ones where there’s the opportunity of providing the tech for a license holder.
Do you think esports could eventually challenge some more traditional forms of sports betting in terms of popularity?
Yes, I absolutely believe that. It’s going to take some time. Some people get wildly optimistic, predicting it will happen in two to three years. I don’t think that’s realistic. I think probably it’s about a 20-year ride before we see it on par with traditional sports betting.
You have to develop that grassroots ecosystem first
The reason I say that is if you think back five years ago there were zero universities or colleges that had inter-collegiate esports programs and now there are over 200, and there are something like 100 schools that have full scholarships, and high schools that have esports teams. You have to develop that grassroots ecosystem first in order to have the robust gambling platform.
Those high school students go to college and then graduate in esports, and the student body gets used to watching those esports teams, which will become part of the curriculum. We just had March Madness, the number two event in sports betting in the states after the Super Bowl, and that’s because you have tens of millions of graduates that follow those teams. I see a time in the not-so-distant future where you have March Madness for esports.
It’s the fastest-growing form of entertainment in the world. The video game industry already exceeds the combined economics of both music and the movie industry. If you look at GenXers, I believe the number is 61% prefer gaming over traditional sports, so this is the future. The future bettor is coming up, and they’re gamers.