Can Esports Be the Next Big Thing for Sports Betting?

Can Esports Be the Next Big Thing for Sports Betting?
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Esports debuted in a traditional online sportsbook back in 2009. Since then, Esports has developed into a billion-dollar industry, thanks to the growth of streamers leading to increased audiences and more sponsorship revenue. 

There are now Esports-dedicated sportsbooks, and many of the more well-known sports betting brands such as bet365, FanDuel and DraftKings now offer Esports betting markets on some of the biggest games. 

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FanDuel Started With League of Legends

In 2019, FanDuel sportsbook became the first U.S. online sportsbook to offer wagering on Esports when it took bets on the League of Legends World Championships. 

But since then, the Esports betting market hasn’t seen the same growth in the United States as the sport itself. 

“Where we seem to have faltered is really in the United States,” Brett Abarbanel, Director of Research of the International Gaming Institute at UNLV, said at the Global Gaming Conference in Las Vegas on Monday. 

“That’s where we are now, where we are kind of slow to the uptake. In Nevada, we were the first to permit wagering on Esports, but we haven’t really gone too much further past that. There are some elements like player-to-player, but we haven’t particularly innovated.”

Online Sportsbooks Have Edge Over Retail With Esports

Abarbanel sees online sportsbooks as currently being more user-friendly for betting Esports than retail options. The learning curve for casual fans can be steep in certain video games, especially action strategy-based games such as Dota 2 and League of Legends. 

Esports broadcasts typically don’t commentate in a way that can explain the action to newcomers or casual fans. Therefore, if you’re sitting in a sportsbook and ask for an Esports event to be broadcasted, it’s unlikely you’ll understand what’s going on if you aren’t already familiar with the video game. 

Abarbanel sees dedicated Esports sportsbooks as the most user-friendly option for betting on video games. Rivalry, a dedicated Esports book based in Canada, is one that has stuck out to her. 

“They’re built not just in terms of having events, but they also have the language that you might speak if you’re a gamer or an Esports fan,” Abarbanel said. “Everything (Rivalry) does is centered around the Esports community. It’s not necessarily centered around Esports bettors, but they built not only just wagers on Esports, but also their own game that mimics a video game. It’s basically like betting on the outcome of an event that has a predetermined outcome. 

“But the other thing they do is everything they do in outreach and marketing. The marketing is focused on Esports and games, it’s not focused on bettors. It really does set them a part in terms of how they access the demographic that is interested in games and Esports, and it’s really not something that our gambling world has managed to do.”

Sportsbooks Yet to Capitalize on Esports Growth

When asked what part of the gaming industry has the biggest challenge with the growth of Esports betting, Abarbanel and Nevada Gaming Control Board member Brittnie Watkins picked the regulators. 

Both cited the difficulty that comes with regulating something as unique as Esports which requires a different set of knowledge and understanding of how a product works and then the specifics of Esports and betting. 

But Seth Schorr, CEO and Co-Founder of Fifth Street Gaming believes it is the sportsbook operators who face the largest task when it comes to Esports wagering.

“(Sportsbook operators) know (Esports) is big,” he said. “The big question is if the gambling industry knows how to leverage this massive sport, and I think sportsbook operators are conflicted. 

First of all, they have a lot going on with getting into new jurisdictions, trying to get their customer acquisition and dealing with all sorts of things, and bringing in a new sport may not be on top of their lists.”

Lack of Esports Interest in Nevada

Nevada sportsbooks have yet to look to capitalize on the increased interest in Esports. 

According to Watkins, there have not been any Esports applications this year sent to the Nevada Gaming Control Board. 

Overall, the number of applications sent has been minimal, with the most coming in 2020 as a result of the pandemic and traditional sports leagues not playing because of COVID-19. 

“While that may surprise a lot of people knowing that Esports is a big deal everywhere else, but we have just not seen one application that would allow for certain organizations to be whitelisted, but we don’t have any of those,” Watkins said. 

Twitch Popularity and Esports

Twitch is one of the leading video game streaming platforms on the internet, and it features a predictions feature that allows viewers to vote on the outcome of a game or an event. 

It’s essentially a euphemism for gambling, but the predictions feature does show the interest in gambling on Esports. 

Schorr noticed the popularity of the predictions aspect while attending TwitchCon in San Diego. According to Schorr, 95% of the audience was in their mid-20s to mid-30s — the legal gambling age. 

“They predict the outcome of these tournaments,” Schorr said. “This is an audience that I guarantee the majority would love to replace a wager betting on the outcome of an event and actually more likely to bet in-game. And I see that, and I’ve seen that for so long, but have yet to see a sportsbook operator take advantage of that opportunity as a way to tap into a new demographic and introduce them to the world of gambling.”