Building the Future of Esports Betting & Entertainment
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Building The Future of Esports Betting & Entertainment Nasdaq: GMBL Esports Entertainment Group (GMBL) is a Nasdaq-listed company Building the Future of Esports Betting and Entertainment. 3 What is esports? • Esports is organized competitive video gaming that is watched as a spectator event. Esports were already the fastest growing subsector of digital entertainment, and Covid-19 has only accelerated this trend. • The Esports audience is very valuable for advertisers because it is young, digital native and affluent. Research has found that esports fans are more likely to be influenced by their favorite team being sponsored by a brand than traditional sports fans are. • Despite the vast amount of eyeballs, Esports remain dramatically under-monetized relative to traditional sports. We believe wagering will play a major role in helping monetization in the space catch up. GAMING ASCENDANCY: MORE PEOPLE ARE PLAYING MORE There are 2.5B gamers globally (with some estimates as high as 3.5B). 2 out of 3 Americans are gamers. Video gaming is now more engaging than any other social media outlet (FB, Snapchat, IG) with gamers spending 51 minutes on average playing every day. Gaming industry is now bigger than movies or music Sources: Newzoo - 2019 Global Esports Market Report 5 ESPORTS DOMINANCE Esports tournaments have now outstripped all traditional sports events both in terms of viewership and prize pool. In 2019 the League of Legends championship drew a larger audience than the Super Bowl. And the winner of the Fortnite World Cup won more money than Tiger Woods at the Masters. Sources: Business Insider 6 Esports Viewers by Age Esports Worldwide Audience Size (millions) THE AUDIENCE IS LARGE & LUCRATIVE There are 518M esports viewers worldwide, growing to 645M by 2022. 75% of fans are between the Brands Active in Esports age of 18-34, with 38% being women. 43% of esports enthusiasts have an annual household income of $75k per year or higher Average spending per gamer is growing 60% YoY Sources: Newzoo - 2019 Global Esports Market Report, Google Images 7 Esports Entertainment Group: Three Pillars Strategy ➢ Build/Acquire complementary and synergistic assets in three main pillars ➢ Operate own wagering platforms and event venues ➢ Become the underlying technology infrastructure provider to the esports industry ➢ Develop best in class esports data Collection and analytics Esports Wagering Esports Entertainment & • Real-money wagering iGaming & Traditional Sports Infrastructure Betting • Player vs Player • Broad exposure to the entire esports ecosystem • Fantasy Esports • Profitable growth • Esports-specific • Access to strategic infrastructure licenses • Data Collection and Analytics • Base pool of customers • Technology infrastructure 8 Esports Entertainment Group: Dominating the esports market with key acquisitions Esports Wagering Esports Entertainment & Infrastructure iGaming & Traditional Sports Betting • Esports Real-Money Betting: VIE.GG is the only esports-focused wagering platform that has Tier 1 gaming licenses (Malta, UK, Ireland, NJ pending). • Player vs Player: LANduel is a proprietary player- vs-player platform, built in Unity, that allows for skill-based wagering on third-party video games both in gaming centers and eventually remotely. • Argyll Entertainment is a licensed online gambling company in the UK and Ireland. Argyll • White-label tournament platform operates under the brands SportNation and Redzone.bet. • Esports Entertainment Centers • B2B gaming center and at-home software • GMBL has engaged Akur Capital, a leading operating system capital markets advisor specializing in online gambling to further our aggressive M&A • Data Collection, Analytics and scouting platform strategy. 9 Pillar 1: Esports Entertainment & Infrastructure Esports Gaming League: Tournament Platform Helix eSports: State-of-the-Art Entertainment Centers ➢ EGL operates both online and live leagues and tournaments. ➢ Helix eSports owns 5 esports centers including 2 of the 5 largest centers in the USA. ➢ Events monetized through 1) sponsorships, 2) streaming broadcast rights, 3) advertising, 4) tickets, 5) other revenue such as merchandise ➢ Social and community hubs for gamers. and food and beverage. ➢ 20+ monthly tournaments per location and unique experiences. ➢ Working with traditional sports teams as their official esports tournament platform provider. Helping teams engage their fans ➢ Strong store-level economics. ~$500K to build a Helix Center, < 1 through their passion, gaming. year payback period. 20%+ EBITDA margins at scale. ➢ Building a database of esports fans that we can cross-sell our other ➢ Have had interest from strategic partners to build centers inside offerings into. sports arenas & casinos. EGL Strategic Partners & Sponsors STEM Programs & School Leagues Stadium Seating for 500+ 10 Pillar 1: Esports Entertainment & Infrastructure ggCircuit: Cloud-based Software for Gaming Centers Genji: Esports Analytics ➢ ggCircuit is a B2B software solution that provides cloud-based ➢ Genji is an esports analytics provider for competitive gaming, management solutions for gaming centers. facilitating talent identification, broadcast analytics, and more. ➢ Serves over 1,000 connected locations globally with 1.9 mil unique ➢ Has worked with FIFA and the NBA 2K League to power activities users & 60 mil hours of usage. like combines, drafts and data-driven business decisions. ➢ 50+ universities on the platform. ➢ B2C opportunities include creating combine-style scouting reports for players who come to ggCircuit connected centers. ➢ Primary revenue model is per seat subscription fee. On screen advertising represents major expansion opportunity. ➢ In the future, Genii's analytics will enable VIE.GG to offer tighter lines on more esports events than any other wagering platform ➢ Will serve as the back-end for our player-vs-player wagering platform. Enterprise & University Customers STEM Programs & School Leagues Stadium Seating for 500+ 11 Pillar 2: Esports Wagering Vie.gg: Esports wagering platform LANduel: Player-vs-Player Video Game Wagering ➢ Only esports focused wagering platform with a Nasdaq-listing / Tier 1 ➢ LANduel is a proprietary player-vs-player platform, built in Unity, licenses (Malta, UK and Ireland). that allows for skill-based wagering on third-party video games both in gaming centers and eventually remotely. ➢ New Jersey license pending. Secured market access through Twin Rivers, awaiting approval from NJ Department of Gaming ➢ Strict 4 factor authentication ensures fair play and ID verification Enforcement. Anticipate NJ launch late 1Q21. ➢ Close relationships with several major game publishers to ensure ➢ Acquired naming rights and jersey logo placement for Dignitas’ CS:GO events/wagering follows community guidelines. team. ➢ LANduel is working alongside the New Jersey Department of ➢ Total addressable market of > $3.5 bil as the market matures. Gaming Enforcement on a pilot program that is expected to be launched early in 2021. Combining LANduel with Helix, Vie.gg, and ggCircuit—we offer a turnkey solution for casinos looking to attract millennials into their locations STEM Programs & School Leagues Stadium Seating for 500+ 12 Pillar 3: iGaming & Traditional Sports Betting Argyll Entertainment: Traditional sports book & iGaming Further M&A Opportunities ➢ Argyll operates under the brands SportNation and Redzone.bet. ➢ We have engaged Akur Capital to help with our aggressive M&A strategy, targeting mature iGaming operators. ➢ Tier 1 licenses in the UK and Ireland ➢ Deals provide access to licenses in strategic jurisdictions as ➢ Covid-19 has proven that traditional sports bettors will bet on well as a pool of players to cross-sell our esports offerings Esports. into ➢ Provides gambling operations and regulatory expertise that helps ➢ Create operational synergies with both Vie.gg and Argyll differentiate our esports offerings from the competition Entertainment ➢ Expanding to Malta license, will allow SportNation to expand to 150 additional jurisdictions including Canada, New Zealand, Finland and Japan. STEM Programs & School Leagues Stadium Seating for 500+ 13 Financial Information Key Company Info Revenue Guidance Fiscal 21: $13 mil Nasdaq: GMBL We intend to provide an update to this once the transaction Recent Price $4.43 has closed. Market Cap $57.1M Fiscal 22: $25 mil Shares 12.9M Outstanding Fiscal 22 Proforma ggCircuit/Helix: $42 mil Cash $8.9M As of November 13, 2020 **We expect to be EBITDA positive in F22** Comparable Company Benchmarking Esports Entertainment Group (GMBL) trades at a significant discount to pure-play online gambling and Esports competitors despite strong early-mover advantage in the rapidly growing Esports vertical. Sources: FactSet Investment Research, Skillz, GNOG, RSI based on proposed SPAC valuations *GMBL based on management’s updated Proforma F21 revenue guidance Esports Comp Group = EGLX.TO, SLGG, AESE, G-Loot 14 .