Is Esports The Next Big Thing For US Sportsbooks?
Written by Phoebe
Published date · Oct. 28, 2022 | Last Updated · Jan. 31, 2023 | Read Time: 3 mins
Back in 2009, top online sportsbooks started allowing wagering on esports, which has only grown since then. Now, esports has become a billion-dollar industry with its growth due to online streams bringing in larger audiences with the backing of revenue from sponsors. With this boom of popularity, top-of-the-line sportsbooks are dedicating a side of their product to esports. Some of the bigger names in the industry, including FanDuel, bet365, and DraftKings, now offer esports betting markets.
Where Did Esports Betting Go Wrong in the Past?
Starting in 2019, top sportsbook FanDuel was the first online sportsbook in the United States to offer betting on esports when it took action on the World Championship for League of Legends (LoL). Since that groundbreaking moment, however, the momentum has essentially stopped in the United States. The esports betting market has not had the same growth as the sport itself has had in the United States.
Director of Research at the International Gaming Institute at UNLV, Brett Abarbanel said, at a recent Global Gaming Conference in Las Vegas, that the sports category of esports has been unable to garner traction in the United States. He goes on to say that the US as a whole is relatively slow to the uptake. While Nevada was the first state to allow betting on esports in the United States, it has all come to a slow roll.
Esports Stay Electronic When It Comes To Sportsbook Choices
The online sportsbook product is currently much more friendly for the user in terms of wagering on esports as opposed to the brick-and-mortar option, says Abarbanel. Most strategy-based action games have a steep learning curve for casual fans when learning different video games.
To make things harder for casual fans, the broadcasters do not announce games to cater to a novice by explaining the action in the game at a high level. It goes without saying that if you happen to be at a brick-and-mortar sportsbook and ask for an event to be broadcasted, you may be hard-pressed to understand what is going on if you are not already familiar with the video game.
Future Esports Betting
The future for esports betting may be held in dedicated esports sportsbooks as they tend to be the most user-friendly platform for betting on video games for both experienced and novice Esport bettors. Abarbanel specifically references a dedicated esports sportsbook in Canada, Rivalry, as one sportsbook that has really taken advantage of the fast-paced industry.
Not only does Rivalry have the events and matchups that are going on, but they also have a name that fits the aesthetic an esports fan or gamer would enjoy. However, it is clear Rivalry has its heart centered around the esports community, not necessarily for the esports gamblers. Because of this, they are able to provide a top-tier esports experience that also doubles as a premier esports sportsbook.
The other primary factor that Abarbanel says sets them apart is their marketing and outreach. The strategy is targeted specifically towards esports and their games, not so much on the people wagering on the games.
As a result, Rivalry stands above the rest, thanks to its approach and targeted demographic that is primarily interested in esports and its games. This is an approach that not many other sportsbooks in the world are doing.
American Sportsbooks Yet To Capitalize On Growth Of Esports
Both Abarbanel and Brittnie Watkins, a member of the Nevada Gaming Control Board, cite the regulators as the biggest challenge that esports faces in terms of growth. They believe that the difficulty comes from trying to regulate a product as unique as esports. The main issues come from a general understanding of how esports works, the specifics of esports, and the specific knowledge of the games.
However, the CEO of Fifth Street Gaming, Seth Schorr, says that it will be the sportsbook operators that have the hardest challenge in terms of betting on esports. Schor says that sportsbook operators know how big the esports product is. However, the challenge comes from if the betting industry will be able to leverage the product appropriately, which can conflict with certain operators.
Another issue comes with going into new locations, working on an overall customer acquisition strategy, and a plethora of other issues not quite explored yet by the introduction of a new sport. It seems like the hassle of a new sport may not be worth it for some operators. There have been zero applications this year for esports sent to the Nevada Gaming Control Board, according to Watkins.