Esports has quickly become a phenomenon in the iGaming and entertainment industries.
Some predictions say esports games will be worth over $2B by the end of this year. Wildly, this growth doesn’t look to be slowing anytime soon.
What makes esports so unique? What games are popular? And what Ontario online esports betting operators are leading the way?
Esports is exploding around the world
Driven by young gamers, esports – electronic sports – revolve around organized, multiplayer video game competitions.
Esports tournaments and leagues have been around for many years, but the recent global growth of the industry has made it impossible to dismiss as simply child’s play.
Looking forward, many sportsbook operators view esports betting as a way to engage younger generations less involved with traditional sports (and betting).
In 2019, projections for the esports betting industry reached nearly US$1 billion, but some expect it to soar as high as US$13 billion by 2025.
In that light, sportsbooks embracing esports like they have traditional sports is no surprise. Some new betting sites will even be esports-focused while others will dedicate standalone offerings solely to esports.
What’s the big deal with the esports trend?
Thanks to services like Xbox Live and the PlayStation Network, the esports audience has grown enormously in recent years.
Players’ gaming habits evolved from playing solo in their living rooms to joining virtual “rooms” where they can compete against others. At the same time, video games became even more appealing with high-quality animations and graphics.
Today, players can compete with friends, their neighbours, or total strangers from across the globe. That accessibility made growing the community easier, leading to a further uptick in participation. Coronavirus added to the growing interest in esports by the genre’s existing fans and sports fans alike.
Furthermore, monetizing games through subscription services and sponsorships led to big-money championship events.
North America plays host to some of the most recognizable esports events
The tournaments like the League of Legends World Championship or the FIFA eWorld Cup competition attract viewers in the millions. Spectators use streaming services like Twitch and YouTube to watch their favourite digital athletes compete.
Esports’ popularity has grown to the extent that some of the most notable events, like the Overwatch League, built stadiums to host tournament play.
In Richmond (BC), the Gaming Stadium opened in 2018, establishing itself as Canada’s first dedicated esports gaming stadium.
Also, in 2018, the International Dota 2 Championships took place in Vancouver’s Rogers Arena, featuring a prize pool of over $25M.
The Fortnite World Cup 2019 was another major competition (with a $30M prize pool) held in New York’s Arthur Ashe Stadium, home of The US Open.
New performance venue approved by City of Toronto
OverActive Media, the parent company of esports teams Toronto Ultra, Toronto Defiant and MAD Lions, is working on its new Toronto performance venue expected to be completed in 2025.
The $500M facility will be built on the north side of Lakeshore Blvd and will include a theatre-style venue with 7,000 seats and a hotel complex. The new stadium will be hosting numerous music events and entertainment bookings. It will also feature awards shows and a full slate of esports events.
A wide selection of esports betting options
For those interested in joining the esports community the good news is you don’t have to be a competitive gamer to dabble in esports betting and enjoy its thrill.
Like traditional sports betting, you can bet on the match-winner, the correct score, total maps played, etc.
Most esports operators offer in-game for those who enjoy live betting, so you can enjoy the fun while placing bets once the match begins.
Games most popular among esports bettors (for the last several years):
- Counter-Strike: Global Offensive (CS:GO)
- League of Legends (LoL)
- Dota 2
Other popular titles include:
- Call of Duty
- City of Duty: Warzone
- StarCraft II
- (Rocket League)
All of these are PC-based games.
According to Steven Salz, CEO of Rivalry, a Canadian esports (and sports) betting operator, PC will continue to dominate in North America. Although the mix of games is likely to change over time.
“But the one platform that is much less understood by North American audiences, and we believe will take a significant share of the future, is mobile esports,” Salz told PlayCanada. “In most countries, the average gamer will not own a powerful enough PC or a console, but everyone has a mobile phone.”
What’s the competition like in the Ontario esports market?
Apart from theScore and NorthStar Bets, Rivalry is the only operator entering the Ontario betting market based, founded and built on Canadian soil. They’re also the only homegrown operator focused on esports.
As Salz said:
“Everyone else has some Canadian operations now by virtue of all this, but they’re from outside. We launched in the summer of 2018, and since then, nobody’s been able to use our product. Not a single one of our friends, nobody we know. We’ve operated in international markets, but never here.”
So far Rivalry is well-positioned to take a leading role.
Besides the Toronto-based upstart, there’s no branded operator in Ontario similarly focusing on esports.
Some operators that went live on April 4 don’t even have esports products. Exceptions are operators like FanDuel and DraftKings (soon to launch in Ontario) will likely add esports markets.
Salz told PlayCanada, “Adding more betting options is not a competitive advantage. It’s more about how you approach the market, how to attract the customer and how to retain them.”
When it comes to retaining that bettor, Rivalry’s CEO believes nobody in Ontario is approaching retention the way they do.
Other operators likely focus on the “bigger prizes,” like owning the NHL and NBA markets from a dollar perspective, said Salz. So it is reasonable that, at this point, operators are focused on getting market share in sports rather than thinking of esports as a long-term strategy.
The key to being a successful operator: sophistication and awareness
Salz believes operators have to be extremely close to the communities they serve.
“The League of Legends community, for example, in one country is distinct from one in another, and each game community within the same country is quite unique. You need to have deep subject matter expertise on a highly nuanced level as a result, per market, per game, and we have seen larger operators that try to tackle esports miss the mark in this regard.”
The esports audience is more predisposed to sports betting than traditional sports. And the average fan of traditional sports is more than 15 years older than the typical esports aficionado. Opening the door to esports is opening the door to a whole new audience of potential bettors.
Major esports events on the horizon
The global popularity of esports means events are happening regularly, all over the world.
League of Legends has an event coming up soon. Of note: it is the world’s biggest esports event in terms of viewership and betting interest.
As Salz pointed out, it’s an event followed by incredulous headlines like, “Esports drew more viewership than the Super Bowl.”
The Stanley Cup playoff equivalent of League of Legends is called Worlds. In 2016, Toronto hosted a portion of the event.
“It runs for about a month, and it travels around the world, usually, to different locations for the quarters, semis and the finals,” said Salz. “The semis in 2016 was in Toronto. Even back then, it sold out the Air Canada Centre for two days in a row and [sold out] quicker than a [Justin] Bieber concert.”
Coming back this summer, it is the first major esports event in Toronto since 2016. The semi-finals are in Toronto at the Scotiabank Arena.
Will esports audience crossover to online sports betting or casino gaming?
So far, that’s a question that remains unanswered.
As Salz explained:
“From our experience thus far, the cross-over between an esports better and traditional sports bettor is quite high…the big misconception about the esports betting opportunity is that it’s just esports. For us and the internet generation, which is young Millennials and Gen Z, who make up 40% of the global population, which is the largest generational cohort in history, gaming is the sport of the internet.
“So competitive gaming, or esports, is simply the inception point of their journey, and should be thought of as that, rather than the endpoint and all that they will do is esports. This is why we view Rivalry as a brand steeped in internet culture, which is very gaming heavy, but there’s so much more to it than that.”
What about bonuses?
One thing is sure; Rivalry is not making compromises around offering bonuses to their players.
When Ontario online gambling launched on April 4, sports betting companies started competing for their share, offering attractive bonuses. To Salz, this is sportsbooks overpaying for the cost of customer acquisition.
“We don’t play that game, which we knew was going to maybe be part of a thing we would have to defend in the early launch of the market, which we have, because, optically, our bonus was probably the least interesting for bettors and for sharps,” Salz explained.
According to Rivalry’s CEO, bonuses are not good for player health. Nor are they good for building a consistent user base engaged in and enjoying the product rather than stressed out about it.
Ontario esports regulations offer more options than the US
Ontario allowing esports betting is pretty unique, especially out-of-the-gate. The province allows more esports betting than most US markets.
Instead of needing to approve every possible offering in advance, the AGCO set out general guidelines before launch. Those guidelines were good news for esports since the rules allow the market to evolve organically.
“These rules are incredibly permissive for most of the sports that people will want to be wagering on. Major esports tournaments will satisfy these requirements,” said John Holden, an academic whose research focuses on policy issues surrounding sports corruption.
Canadians already investing in esports
In 2018, Canadian hip-hop artist Drake became a co-owner of the esports brand 100 Thieves.
Not to be left out, The Weeknd became a top investor in OverActive Media Group. As mentioned, OMG is the esports brand behind the Toronto Defiant. Representing Toronto in the Overwatch League’s Western Division, the Defiant landed themselves a fourth-place finish in the Summer Showdown 2020.
Eventually, we can expect more big-brand names and celebrities to follow.
After Toronto Raptors won their first NBA Championship in June 2019, the team’s esports equivalent in the NBA 2K League (the “League”) gained a significant presence in the esports arena.
Out west, the Aquilini Group, owner of the Vancouver Canucks and Rogers Arena, purchased a slot in the Overwatch League for their team, the Vancouver Titans. In March 2019, the company’s subsidiary Aquilini GameCo Inc. acquired Luminosity Gaming, one of the largest esports organizations in North America.
An industry worth watching
With esports opportunities continuing to rise, and Ontario’s newly open online gambling market, the potential benefits of embracing esports betting are massive.
For what it’s worth, Canada’s esports betting industry is off to a good start. We’re keen to see how that changes as the industry grows.