ESPORTS IN THE SPOTLIGHT - ESPORTS BETTING WORLDWIDE - REPORT PRESENTED BY: Swapcard
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P R E S E N T E D B Y: CONTRIBUTIONS: ESPORTS IN THE SPOTLIGHT ESPORTS BETTING WORLDWIDE - REPORT
THE WORLD OF
ESPORTS
CONTENT
BETTING 01. INTRODUCTION
02. ESPORTS AND BETTING
2
3
03. EU MARKET FOCUS 8
Thank you for downloading the Esports betting worldwide
report! I hope that this publication will help you to better
understand esports betting market, and its future potential. 04. CIS MARKET FOCUS 13
The reason why we did this report is simple - we still see a lot
of confusion in the betting industry. 05. US MARKET FOCUS 18
- How big is the esports betting market?
- What is the forecast of market growth?
- Who are the esports fans?
- How to approach them as customers?
Those are just some of the questions we constantly face. Our
ambition is to answer most of them and to add insight from
top industry experts.
Enjoy reading!
Ondřej Šilhavý
Senior Business Development Manager at RTSmunity
ondrej.silhavy@rtsmunity.com
ESPORTS INDUSTRY
796
OVERVIEW
800
752
700
641
600 567
Esports are a phenomenon of today. In 2019 the 443
industry passed the magical mark of $1 billion in 400
395
revenue, and it keep growing further. The esports
audience reached 500 million, and is growing even
faster. The accessibility of esports creates many
opportunities, but also challenges. How to monetise
200
such massive market? How to close the gap
between average spending on traditional sports and
esports?
0
2018 2019 2020E 2021E 2022E 2023E 2024E
Global esports audience growth (mil.)
Source: Newzoo & Activate Analysis
ESPORTS BETTING
3,2 %
SHARE OF
3,20 % 900
3%
862
2,7 %
Esports share of global GGR (%)
GLOBAL MARKET 2,4 % 728
Global esports GGR ($m)
2,40 % 675
2,1 %
608
By 2024, market intelligence team of H2 Gambling
1,6 %
Capital is projecting the market to generate $862m 1,60 % 473 450
in revenue, growing its share of global betting GGR
over the next five years from 1.6% in 2019 to 3.2%
by 2024. 343
Other estimations are even more bold, placing
0,80 % 247 225
esports into TOP 3 betting sports within next five
years. The main value to keep in mind is $14billion.
That is estimation of the total sum of bets placed on
esports in 2020.
Another indicator of growth is Betfair Exchange, 0,00 % 0
2019 2020E 2021E 2022E 2023E 2024E
where esports trading volume surpassed
£100million mark ($131mil.) already in October
2020. It is the first time ever that yearly volumes
passed this mark, with 2 months still left in 2020.
Source: H2 Gambling Capital
ESPORTS BETTING
Traditional esports 26
83% of esports fans are below the
55%
Adults aged 18-25 spend more time
punter age of 26. Massive room for growth. watching video game and esports
content than traditional sports content.
In order to offer compelling betting product, we need
to understand who are esports fans, and what are
their needs. First thing to realise is that esports are
54% 72%
lifestyle. Thats why most of the top esports brands
oscillate between esports team, media production
and lifestyle brand. Esports fans also spend much
more time on forums and chats than average sports
fans do. If you should take away one key figure from
this page, it is the 55%. Why? Because it means
esports and video games content already surpassed Of esports fans watch dedicated Of esports fans are male.
traditional sports within young audience. They spend esports news sites and forums.
more time watching video games and esports, then
they watch traditional sports, and this ratio will
continue to grow with each year.
Source: Activate analysis, Activate 2020 Consumer Tech & Media Research Study
INTEREST IN LIVE VIEWING FEATURES
ESPORTS BETTING
What are esports Betting-focused content
34 %
63 %
fans looking for? Multiple camera angles
35 %
60 %
Based on consumer research done by Activate, 60 %
Statistics and analytics
there are crucial differences between esports fans 31 %
and sports fans. The number one priority for esports
fans watching live games is betting-focused
content. 57 %
Social elements
What is even more important, are the differences in 30 %
interest between esports and sports fans.
If you want to attract esports fans, you need to
provide customers with betting-focused content, 56 %
In-game purchases
statistics and analytics, accompanied by social 32 %
elements like chat or leaderboard.
0% 18 % 35 % 53 % 70 %
Esports fans Sports fans
Source: Activate analysis, Activate 2020 Consumer Tech & Media Research Study
1. “Esports fans” refer to consumers who have watched at least one esports competition. 2. “Sports fans”
refer to consumers who have followed (e.g. attended live events in person, watched games or highlights, read
articles or statistics) at least one professional/collegiate traditional sport in the last 12 months.
ESPORTS BETTING Example of what fans expect Long gone are the days of boring betting sites looking like glorified excel sheet. To meet all need of esports fans, betting platforms have to step up. Stream - Absolute must - 80% of bets is placed live. Betting focused content - Achieve transparency through visualisation of placed bets, or available stake pool. Offer wide range of live markets with high uptime. Statistics and analytics - Esports fans are able to handle fast flow of information, and use it for betting decisions. Help them with that. Social elements - Being part of the community is crucial. Twitch chat and possibility to compete with other wagers are good ways to achieve it.
MARKET FOCUS EU MARKET FOCUS Europe is a home for many of the top esports organisations in the world. It is also a prime example of mature esports betting market. In many countries like UK, Poland or Denmark, esports are already stable source of revenue for sportsbook operators. What can we learn from EU market? • Esports betting in EU • Esports teams in EU • Approaching esports fans in EU • Interview - Mateusz Juroszek, CEO of STS
EU Esports betting in numbers
2nd 92mil
EU esports fanbase is the second Estimated number of esports fans in
biggest in the world, right after Asia. Europe, growing by 7,4% YoY.
44,5% 152mil
European esports betting market Estimated size of EU esports betting
accounts for 44,5% of the global market turnover in 2019.
esports betting market.
Source: H2 Gambling Capital, Newzoo
Esports teams in EU
Notable names
G2 Esports Fnatic MAD Lions
EU Esports scene
European esports scene is
dominated by League of Legends
and Counter Strike: Global 01 02 03
Offensive. Although Dota 2 is not
far behind in terms of fans and
popularity. From betting G2 Esports is an organisation founded One of the most established esports Spanish esports team, previously
perspective, the clear n.1 is in 2015, competing in League of brands in Europe. Historically the first known as Splyce. Parent company
CS:GO, while League of Legends Legends, CS:GO, Rainbow Six Siege, team to ever win League of Legends OverActive Media rebranded the team
and Dota 2 are lagging behind. Valorant, Hearthstone and Rocket World Championship. Founded in 2004 in 2019 and joined LEC with a team
That ratio is usually changed League. In 2019 their LoL team they rank amongst pioneers of esports full of rookies. They stormed the
during bigger tournaments like The reached finals of World Championship, in Europe, winning total $15mil in prize scene, making their first appearance
International or League of Legends while in 2020 they reached semifinals. money. They compete in LoL, CS:GO, on the Worlds Championship stage.
World Championship. Their CS:GO team peaked at n.1 rank Dota 2, Rainbow Six Siege, Fortnite The organisation has teams in LoL,
in 2020. and FIFA. CS:GO, FIFA and Clash Royale.APPROACHING ESPORTS FANS IN EU
Although esports fans are unique as a demographics, there are some
way of approaching them, which can be similar to traditional sports -
influencers and athletes. We can have a look at good example from
the biggest sportsbook operator in Poland - STS. There are some
criteria which has to be met in order to have successful cooperation.
RELEVANCY TO THE MARKET
In the case of STS, they have chosen a League of Legends streamer/
influencer Nervarien and CS:GO player Innocent. Both of them have
connection to the polish market, where the advertisement is targeted.
It is better to focus on globally lesser known influencers which have
market relevancy, then to spend budget on big names without direct
link to community. Innocent was part of top teams in Poland, x-kom
and Illuminar. Nervarien is streaming in polish language for more than
500 000 followers. If you plan to connect with a community, do it
where it matters.
“Esports entered the top ten of the most frequent
bets made by our punters, and it is still growing in
popularity. This is the reason why we invest in
increasing our recognition among esports fans –
we are constantly developing our offer to meet the
expectations of our punters, i.e. by sponsoring
popular teams, players and events.”
Mateusz Juroszek
CEO of STSMateusz Juroszek CEO of STS STS is putting a strong emphasis on esports. How do you see the future of esports and betting? We have been consistently developing and improving our esports product for many years, and we want to keep doing it. Esports popularity grows every year, and I believe it will be one of our top sports in the near future. What is the difference between “traditional customer” and esports fans? Esports fans are relatively younger (only 17% have more than 26 years) but also keen to bet on traditional sports (almost 70% bet football). Traditional customers are focused only on the most popular sports like football, basketball or tennis. Usually, it is hard for them to understand what esports is and how it works. Your cooperation with RTSmunity started this year. Where do you see biggest benefits? The biggest benefit of this cooperation was improving the number of in-play esports events. We have immediately tripled the number of offered events which gave us a significant advantage in the Polish market. STS has a 50% market share in Poland. What is your next ambition? Any new markets you are looking at? The Polish operation is our core business, so we will continue to focus on improving it. Since February 2019, we have also been operating in the UK and international markets with the STS brand, and we are constantly looking for new markets and areas to improve.
MARKET FOCUS CIS MARKET FOCUS “Russia is among global leaders in both esports infrastructure and the performance of teams with CIS rosters in various disciplines.” Those are words of Anton Cherepennikov, co-founder of ESforce. With esports scene in CIS constantly growing, let’s have a look at the region closer. • Betting market overview • CIS esports scene • Approaching esports fans in CIS region • Interview with Stepan Shulga, Head of esports at Parimatch
CIS Esports betting in numbers
3rd 22mil
Russia alone makes the third biggest Of people are involved in esports in
esports fanbase in the world. CIS region.
7% 10mil
Up to 7% of betting volumes is now Estimated size of the CIS esports
created by esports betting. betting market.Esports teams in CIS
Notable names
Natus Vincere - Na`Vi Virtus.pro Unicorns of Love
CIS Esports scene
CIS esports scene is created
mainly by two esports titles -
Counter Strike: Global Offensive 01 02 03
and Dota 2. There is one more title
lurking behind - League of
Legends, which was popular Natus Vincere (Latin: "born to win", Virtus.pro (often abbreviated to VP) is a While this team cannot be compared
especially in the past, when the often abbreviated as NAVI and well-established Russian esports to Na’Vi or Virtus.pro in terms of
famous Moscow 5 team stormed previously Na`Vi) is a leading multi- organisation, mostly famous for their international success or brand
the scene. Nevertheless, there is game esports organisation teams in Counter-Strike: Global recognition, they have a unique
clear dominance of CS:GO and from Ukraine. It was the first team in Offensive and Dota 2. The organisation approach to the market. They are
Dota 2 in the region. Counter-Strike history to win three CS is known for hosting the majority of the focused on innovative ideas, friendly
1.6 "Majors" in one calendar year - players from the original Golden approach, and they have been the first
IEM Season IV, ESWC 2010 and WCG Five which was Poland's most CIS organisation to ever reach group
2010. popular Counter-Strike roster. stage of League of Legends World
Championship.APPROACHING ESPORTS FANS IN CIS
When we look at Parimatch, we can see two way of connecting to the community.
Team sponsorship & league sponsorship “We managed to create a unique Russian-
Parimatch is currently sponsor of Virtus.pro and Fnatic. While Virtus.pro is a team known especially in the language league for players, which has become
CIS region, Fnatic is truly internationally recognised top tier team. This difference is of course recognised by an excellent base for rivalry in the CIS region. I
Parimatch as well. Stepan Shulga from Parimatch told us :”Reasons (for sponsorships) are transparent, with hope that our tournaments has pleased the
Virtus.pro we are reaching a huge Russian speaking audience of Dota2, with Fnatic - global audience esports community and will further develop the
related to CS:GO, Leagues are great to pin attention to the brand.“ Russian-speaking scene of Dota 2. ”
Esports as an industry offer a unique possibility to sponsor or support in any range. Starting with single
Stepan Shulga
players or influencers, continuing with low tier teams and tournaments up to the best teams and leagues,
Head of esports at Parimatch
as it is the case with Parimatch.Stepan Shulga Head of esports at Parimatch Parimatch is well known for their presence in the esports industry. What makes esports interesting from your point of view? Parimatch is data-driven company, all of our decisions are based on analytics, insights, reports, researches, and so on. It's really important to understand what's going on around the world, especially in sports industry. So, no secret, what is growing faster than anything else in the sports and entertainment industry? Esports! And we must rely on this fact. We are considering ourselves as "digital entertainment", and trying to reach a wide a range of audience as possible. We discovered, that punters are ready to enjoy esports and realise that part of the audience is excited about esports much more than traditional sports, and even more! A lot of punters know and respect esports as a stand-alone sport. Honestly, esports is a great key for young audiences and must-have solutions to cover all marketing channels for your brand. Are there some unique needs of esports betting fans compared to your traditional customers? Unique needs are based on expertise and some existing standards. You have to provide streams with broadcasts, use the same language, icons, know differences between "game", "map", "best of free", "double elimination"... But after all, it's a question of time and team, that would execute this. Is there a difference between sponsorship of an esports team (Fnatic) and football team (Juventus)? People and communications are always different. Cultural and language details, and of course kind of sports. Negotiation is a bit easier in esports, but big names in traditional sports teams have vast experience and many cases instead. Eventually, with football teams you are thinking how to organise presence in TV broadcasts and photo materials, and with esports teams you are focused on social media of contracted team at first Esports betting is constantly growing, where do you see it in five years? TOP3 for sure, depends on geography and core audience of bookmaker, but in general - football top1, esports - top3.
MARKET FOCUS US MARKET FOCUS US is the market showcasing the highest growth potential, but also the most complications. How can operators tackle them? • Esports betting and fanbase in the US • Betting market forecast • Legal obstacles • Interview - Pavol Krasnovský, CEO of RTSmunity • Key takeaways
Europe Rest of the world Asia US
16 %
GLOBAL ESPORTS MARKET
15 %
OVERVIEW
Global esports fans share
57 %
12 %
2019
41 %
Looking at the data from 2019, we can see that while Europe and
28,2 %
US have a comparable size of esports audience, their esports
Global esports betting GGR share
betting GGR is in contrast. There are multiple reasons for this, 44,5 %
discussed in this report. 11,8 %
What underlines the enormous potential of US esports betting
market is the fact that according to Newzoo research, US esports
fans generate double the average revenue per single fan. It is fair to
say that average revenue per fan is still way lower than in traditional 33 %
sports, but it also creates an opportunity for growth. With global 50 %
esports fanbase constantly growing, and with the continuous Global esports revenue share
25 %
evolution of the market in terms of revenue streams, esports betting
is expected to follow this trend as well. 37 %
0 0,2 0,3 0,4 0,6
Source: H2 Gambling Capital, Statista, Newzoo16
I N S TA G R A M
12
Popularity
Esports versus traditional sports (mil. followers)
Comparing traditional and well established teams like New York
8 Yankees or Los Angeles Lakers, we can see that esports teams are
already catching up. And in the case of top esports brands, they
are already leaving traditional sports behind them. What is the
reason? Esports organisations are run by millennials and Gen Z.
They understand their customers. They constantly produce content.
The brands are relatable, and approachable. They speak the same
4
language as their target audience. The style of communication is
very close to NBA brands, which is underlined by many
cooperations in esports business. Golden State Warriors, Houston
Rockets, Rick Fox, those are just some of brands which overlap
NBA and esports.
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DEsports teams in US
Notable names
TSM Cloud9 FaZe Clan
US Esports scene
US esports scene is facing several
difficulties compared to Europe.
One of them is the geographical 01 02 03
size of US, which makes it difficult
to create good competitive
environment without connection North American esports organisation Cloud9 became famous for their FaZe Clan is a team that is very much
issues. Second reason is that with one of the biggest and most innovative style of playing League of on line between esports team and
console gaming is prevalent in US, passionate fan bases. Lead by their Legends. Their initial team was not lifestyle brand. With many investors
which reduces the talent pool of former player Reginald, TSM were the only able to dominate on North from music and basketball scene,
esports players in PC games. pinnacle of North American League of American field, but also be competitive FaZe clan covers not only esports
Where US is leading is the content Legends. While they struggled in past on the Worlds stage. Something, that players, but also streamers and
creation and brand building years, they managed to win NA LCS NA teams are struggling till this day. In content creators. In terms of marketing
activities. title in 2020 and qualify for Worlds CS:GO Cloud9 became the first team and brand recognition, Faze Clan is
Championship. ever to publicly reveal all player the top.
contracts.EUROPE MARKET US MARKET
LOOKING FORWARD
400,00
374,6 Esports betting
337
Market forecast 2019 - 2025
294,7
Esports betting GGR ($mil)
300,00
259,5
Looking at the market outlook prepared by H2 Gambling Capital,
221,8 218,8 we can see a lag behind European market by approx. 5 years. The
reason is further explained later in the report - legislative limitations.
200,00 212,2
152,2 181,3 On the bright side, US market is showing a lot of promise thanks to
hight purchasing power and the amount of esports fans. The
139,7 amount of fans is not only comparable to Europe. It is probably
100,00 even higher when we take into account esports like NBA or fighting
105,9
games.
75,6
48,4
26,3
0,00
2019 2020E 2021E 2022E 2023E 2024E 2025EMARKET FOCUS US LEGISLATIVE The core reason why US esports betting volumes lag behind European and Asian markets, is legal aspect of esports betting. The Professional and Amateur Sports Protection Act (PASPA), was repealed in May 2018. This decision dissolved a federal ban on sports betting. States can now decide whether or not they want to legalise the activity. However, betting on sports and esports is still taken as different categories, mainly for two reasons: 1) It is illegal to wager on players under the age of 18 2) No clear legality in many states - “grey markets” The first problem already found a solution, as there are companies like GameScoreKeeper, monitoring the age of all players. That makes it very easy to exclude non compliant matches. Second problem is more difficult to solve. Some states, like New Jersey, Nevada or Tennessee have already ruled towards legal esports betting. Other states don’t have clear ruling on esports betting, and they allow sports betting, for example Arkansas, Delaware, New York or Iowa. And there are also states that allow sports betting, but specifically outlaws esports betting. However, there are ways to introduce esports betting before legislation is passed.
TOP 3 CHALLENGES OF US MARKET
ESPORTS PRODUCT
Esports betting and traditional
sports betting are two different
products. Any operators trying to
approach esports fans needs to
provide the right product.
L E G I S L AT I O N U N D E R A G E AT H L E T E S
Due to legislation in the US, it is
Issue n.1. Once the legal side of
forbidden to bet on athletes below
things is solved and states
the age of 18. There are solutions
provide clear path for esports
on the market to solve this already,
fans to bet, the market will grow
and it is more about proper
rapidly.
implementation.Pavol Krasnovský CEO and co-founder of RTSmunity Five years ago, you made a decision to start a company focused on esports. Looking back, are you glad you made this decision? Absolutely! The path was not easy, esports are still very young industry, so building a proper business structure was and still is complicated, but I believe we are building something with great future. The growth in esports we see today only confirms what we expected. Providing live odds and trading for esports is more complicated than traditional sports. Why is that? Reason number one is the raw amount of data that you have to analyse in real time. For example one match in Dota 2 will deliver same amount of data points as whole ATP tour for one year. So that is definitely challenging. Second thing is that all games we analyse are very complex, but that’s part of the fun as well. What would be your advice to US sportsbook operators looking at esports as next opportunity? Well first of all, I think they are looking in right direction. Demographics are shifting towards esports fans more and more, so if anyone wants to be in the right position, the time is now. And second thing will sound boring, but listen to your customers. Keep in mind that esports fans are most likely not your current customers. They have different needs compared to traditional punters, and any operators trying to reach out to them should respect that. Have a look at Europe, the blueprint for esports betting is there.
CONCLUSION ON US MARKET Looking at esports betting market worldwide, US is presenting one the most interesting destinations. The combination of high purchasing power and strong growth of esports fanbase is held back by legislative limitations. When those are removed, it will create a new strong source of revenue for betting operators. The fight for esports audience has started already. Either through fantasy leagues or offering of esports betting in states like New Jersey. What is missing on the market is a real game changer. A betting product designed specifically for esports fans, which would be focused on their needs. Any operators expecting to attract esports fans with offer similar to traditional wagering will inevitably fail to do so. The fact that US market is lagging behind Europe and Asia should be used to their advantage. See what is working in Europe, analyse why, and apply it in US when the time comes. And the time will come soon.
w w w. r t s m u n i t y. c o m
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