AGORACOM Small-cap Investor Relations Blog

• In the gambling sphere, there’s barely a bookmaker now that doesn’t include esports and there’s a plethora of esports specific operators too
• One thing that hasn’t quite materialized yet is betting exchanges, similar to Betfair, and this is an opportunity Esports Entertainment Group are keen to capitalize on. 

By Esports Insider

There’s undoubtedly been growth in esports betting over recent years. Entertainment and betting arguably go hand-in-hand and players are already betting on a multitude of titles ranging from Counter-Strike through to Hearthstone. In the gambling sphere, there’s barely a bookmaker now that doesn’t include esports and there’s a plethora of esports specific operators too. One thing that hasn’t quite materialised yet is betting exchanges, similar to Betfair, and this is an opportunity Esports Entertainment Group are keen to capitalise on. 

A week on from the news of a big partnership with Dignitas, we spoke to Grant Johnson, CEO of Esports Entertainment Group about his Vie.gg exchange – what they’re trying to achieve – and how he sees the intersection between gambling and esports developing. 

Grant Johnson, Vie.gg CEO (right)

Esports Insider: Tell us about how Vie came about. As a seasoned gambling expert, your profile doesn’t fit the typical ‘gamer’ mold – so what piqued your interest in this particular area?

Grant Johnson: It all came about back in 2013 when I was doing some work with a group who wanted to get into the sports bet casino business. They asked me what was “new”. I did some research and started reading about esports. I had the good fortune to get introduced to Alex Lim. At the time he was the Secretary-General of the IeSF. He, in turn, introduced me to Ken Silva, founder, and president of EsportsCanada, who invited me to the Starcraft championship in Toronto late 2013.

I was absolutely blown away by the excitement and energy displayed by the fans at the event and the fact that the vast majority of the fans were in their 20s. I spoke to several people regarding interest in wagering and the feedback was unanimous — there was a strong interest. Effectively that was the ah-ha! moment for me. The group I was working with decided they were not interested in the sector so I decided to launch my own company at the time called VGambling, which has evolved into Esports Entertainment Group (OTCQB:GMBL). Which in turn launched Vie.gg and the bet exchange platform.

ESI: The gambling industry on the esports side clearly isn’t as developed as the traditional sports counterpart yet — why do you think this is and how do you think this can change?

GJ: Yes, I do believe it will change and it’s already happening. I believe the fan base has to become comfortable with betting. Clearly, some already are and that number is growing rapidly. As I did my research, transparency and Player vs Player options were a constant theme in the feedback we were getting. Hence the bet exchange platform which is specifically suited for the PvP wagering.

We went the route of being a publicly traded company so that the fans, players, and bettors could see with full transparency who was behind the platform. Generally, it is almost impossible to tell with traditional betting operators who the people really are behind it.

ESI: Vie.gg is one of the only exchanges currently in esports. How important are exchanges in a betting ecosystem and do you envisage the space developing in the future?

GJ: Clearly by virtue of the fact we elected to go this way. We are strong believers in the bet exchange system. Esports is all about competing against your friends, and here the bet itself becomes a competition of knowledge which our research has told us is key to the fans of esports. The players can bet directly against each other and not have to deal with the house taking a position against them as it is in traditional betting.

“I was absolutely blown away by the excitement and energy displayed by the fans at the event and the fact that the vast majority of the fans were in their 20s”

As the esports community becomes more comfortable with placing a bet and they come to understand that bet exchange is a more transparent option for them, we feel in the end a significant portion of the market will prefer the exchange model. At this stage, it’s all about educating the fan base about the player versus player bet experience and that is where our main focus lies right now.

ESI: The esports market has been fragmented and regulation is fast improving with more traditional sports betting operators coming in and positioning themselves in the market. What do you see the landscape looking like five years from now? How is Vie positioned differently to these traditional sportsbook brands?

GJ: I agree that there is a great deal of change and educating taking place. The traditional sports books are offering esports in the general belief that their sportsbook player base will cross over to do some esports betting. I do think in certain titles there is some crossover, however, we think that percentage is fairly small.

We believe a focussed effort on the esports fan specifically is key. I agree with the financial experts that the esports betting space will see explosive growth in the next five years. And I believe I have read that esports gambling could, in fact, eclipse the current size of the esports ecosystem itself. That offers huge potential.

I believe in our position as the first mover with the exchange and the transparency that comes with being public. We also believe in partnering with the esports brands that the fan base trusts and follows. Our new and exciting partnership with Dignitas will put us in a strong position to be a major beneficiary of this growth.

ESI: Vie.gg are involved with teams like Dignitas and Epsilon and other esports teams with collaborative sponsor agreements amongst other streamers and influencers. How do you leverage the relationships these offer and what can fans expect to see from these partnerships in the future?

GJ: Clearly, influencers like teams and streamers have a great deal of social exposure and connection with their followers. By aligning ourselves with these teams and brands such as Epsilon and our newest partners Dignitas, both of which have loyal long term fan bases, we are in a position to offer our product to the fans in partnership with the brands.

“I believe I have read that esports gambling could, in fact, eclipse the current size of the esports ecosystem itself. That offers huge potential”

It is a continuation of our belief in transparency and dedication to the esports industry and we feel that in the long run, it will give us an option to offer the fans a way to have confidence in and feel comfortable using Vie.gg for placing wagers when they chose to do so.

Source: https://esportsinsider.com/2019/06/grant-johnson-vie-gg-building-an-esports-betting-exchange/

Hainan to Launch $145 Million Esports Fund

• South China’s tropical Hainan will set up a 1 billion yuan ($145 million) fund to lure esports businesses to the province, as part of a broader package to support gaming in the region.

The money will be used to support “related companies” and subsidize global esports competitions held in the province, said Sun Ying, the director of Hainan’s tourism, culture, broadcasting and sports department. She also said the government would make it easier to get approval to hold such events.

Sun made the announcement at an esports industry forum held in the island’s Boao city on Thursday.

Sun said the government would also offer other incentives to the sector, such as tax breaks and benefits such as subsidized housing and residency status for star gamers.

The official also said the local administration planned to expand the province’s visa-free visit program —which currently applies to 59 nationalities — to include more countries in the future. Sun said this would make it easier for more people to participate in esports events in the process.

Hainan, known for its warm weather and sandy beaches, has long been heavily reliant on tourism.

However, the central government has plans to shake up the region’s economy, with the State Council announcing in October that the province would become China’s 12th pilot free trade zone. According to a policy guideline document (line in Chinese) released at the time, the Hainan zone will focus on the international tourism, modern service, and advanced technology industries.

In recent years the gaming industry has rapidly expanded as ever larger numbers of Chinese people have come online. The value of China’s esports market has more than tripled since 2015 and is expected to more than double from its 2018 level to 247.8 billion yuan by 2023.

Provinces including Zhejiang, Anhui, and Jiangsu have announced plans to build so-called “esports towns,” regions in which incentive policies much like Hainan’s — direct funding and tax breaks — have been promised.

However local governments’ enthusiasm for this growing sector could be met with roadblocks, as the central government has displayed an ambivalent attitude towards video gaming.

The central government department responsible for approving the release of games did not give the green light to any new titles for most of last year. Then, in April, it was revealed that thousands of titles that had already been waiting for approval — some for more than a year — would be forced to start the approval process all over again under new regulations.

In September last year, the General Administration of Press and Publications said it would control the total number of online video games and new titles in operation, ostensibly to address worsening eyesight among the country’s young people.

Source: https://www.caixinglobal.com/2019-06-21/hainan-to-launch-145-million-esports-fund-101430056.html