Initiatives Expanding Esports and iGaming Offerings, Focusing on End-to-End Betting Solutions
High Standards and Regulatory Compliance Remain at the Forefront; Ensuring Solutions Meet State-by-State Standards to Support Expected Rapid Expansion within Sizable U.S. Market
Julians, Malta--(Newsfile Corp. - November 21, 2023) - Esports Entertainment Group, Inc. (NASDAQ: GMBL) (NASDAQ: GMBLP) (NASDAQ: GMBLW) (NASDAQ: GMBLZ) ("Esports Entertainment", "EEG", or the "Company"), a leading, global iGaming company and business-to-business (B2B) esports content and solutions provider, today provided strategic, financial, and operational updates for the fiscal first quarter ended September 30, 2023.
"In recent months, we have thoroughly reviewed our Company, focusing on the expected trends in esports and iGaming," said Alex Igelman, CEO of Esports Entertainment. "This review involved a detailed analysis of every aspect of our business, identifying unprofitable operations and contracts. We have taken firm actions, setting the stage for a bright future. While this restructuring incurred one-time expenses, the long-term benefits will far outweigh these costs as we continue to expect a yearly reduction in operating expenses of more than $4 million. This is a transformative time for the Company, marking a fresh start and forging a path towards maximizing our success potential, which we believe will lead to substantial revenue growth and increased long-term shareholder value."
"During the quarter, the Company announced its latest strategic partnership within the online gaming industry, the integration of a sportsbook supplied by Delasport to its customers on Vie.bet. Partnering with Delasport opens up exciting prospects for EEG to expand its services to new customers in key markets where sports betting is already extremely popular. We are enthusiastic about the potential growth and positive impact this integration will have on our business. Additionally, this partnership sets a solid groundwork for EEG to venture into esports betting in the near future where our plans include offering betting options on traditional esports tournaments and introducing wagering markets on short-cycle esports content."
"Furthermore, we have partnered with Oddin.gg, a top provider in esports betting solutions, to incorporate their iFrame solution for our bettors. This expansion of our partnership with Oddin.gg is a crucial step for EEG, enabling us to offer betting markets on a variety of esports events, including seasonal high-profile events, annual tournaments, and short-cycle wagerable events. Oddin.gg stands out among esports odds providers with their specialized statistical models and algorithms. We believe these tools, combined with their deep understanding of game dynamics and player preferences, will provide the Company with the ability to create a superior user experience. Their system also allows for predicting in-game outcomes, facilitating live betting within games. We are excited to add these new features, all of which will further enhance the integration of the Delasports betting platform. This launch is pending final approval from the Malta Gaming Authority and is targeted for Q1 2024."
"Recently, the Company signed a binding Letter of Intent for a 30% minority stake in Drafted.gg, a key player in wagerable esports content, initiating a broader strategic collaboration and revenue-sharing plan. Drafted.gg, known for its high-quality esports content, features popular titles in eSoccer, eBasketball, and eCricket, operating two content production studios in the United Arab Emirates and Prague, Czech Republic. They provide live streams on platforms like Twitch and YouTube, catering to audiences in Europe and Asia. This move aligns with Esports Entertainment's strategy to integrate wagerable content into its growing esports and iGaming offerings. We foresee expanding our partnership with Drafted.gg, potentially acquiring the remaining 70%, based on the success of their content and our successful onboarding of a U.S. sportsbook. We are confident in the appeal of Drafted.gg's content, particularly its thousands of monthly, short-cycle games, many concluding in under 8 minutes, to the U.S. esports betting market."
"The Company's recent focus has turned towards developing initiatives to further broaden our esports and iGaming solutions in order to create a more comprehensive, end-to-end offering of online betting options for our customers. Through our various partnerships, we have established a robust ecosystem that benefits our clients and customers, alike. A key priority for us is maintaining the highest standards of gaming integrity and audit processes, and we remain committed to ensuring that our content adheres to strict regulatory requirements for skill-based wagering. Our intention is to commission a thorough integrity audit of Drafted.gg by a third party to meet state-by-state standards and support our expected rapid expansion within the sizable U.S. market. We are excited about the future prospects of Esports Entertainment, fueled by the potential of our strategic investments, and are confident that the future is bright."
Financial Results
Revenue totaled $2.7 million for the three months ended September 30, 2023, compared to $9.6 million recorded for the three months ended September 30, 2022
Cost of revenue totaled $0.6 million for the three months ended September 30, 2023, a decrease of $3.2 million, or 84%, from the $3.8 million recorded for the three months ended September 30, 2022
Sales and marketing expense totaled $0.9 million for the three months ended September 30, 2023, a decrease of $1.5 million, or 63%, compared to the $2.4 million recorded for the three months ended September 30, 2022
General and administrative expense totaled $6.2 million for the three months ended September 30, 2023, a decrease of $3.3 million, or 35%, compared to the $9.5 million recorded for the three months ended September 30, 2022
Net loss for the three months ended September 30, 2023, was $4.8 million, compared to $4.2 million for the three months ended September 30, 2022
The Company had approximately $0.3 million of available cash as of September 30, 2023
The Company's complete financial results are available in the Company's Form 10-Q, which has been with the Securities and Exchange Commission and will be available on the Company's website.
About Esports Entertainment Group
Esports Entertainment Group is a global MGA-licensed, "esports-focused" iGaming B2C operator and a US-focused B2B provider of esports solutions. The Company owns and operates the world's leading esport venue management system, currently deployed in over 800 global locations, including more than 100 colleges and universities. The Company's strategy is to capitalize on the multi-billion-dollar market for esports and esports wagering by leveraging its leading position in the industry. The Company is also targeting the rapidly growing market for short-form esports wagerable content, which features competitive, short-cycle head-to-head leagues that are optimized for betting. In addition to its plans to distribute esports content, the Company currently provides B2C-focused wagering through its MGA-licensed suite of brands. For additional information about the Company, please visit www.esportsentertainmentgroup.com.
Forward-Looking Statements
The information contained herein includes forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements generally can be identified by words such as "anticipates," "believes," "estimates," "expects," "intends," "plans," "predicts," "projects," "will be," "will continue," "will likely result," and similar expressions. These statements relate to future events or to our strategies, targeted markets, and future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements, including the Center serving as a hub for competitive gaming communities, bringing together the brightest minds from all stakeholders to develop bespoke software and hardware solutions that equip both students and educators to thrive in the digital age. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in our most recent Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q, and those discussed in other documents we file with the SEC, including our ability to maintain compliance with Nasdaq Listing Rules and stay listed on Nasdaq, our obligations under our preferred stock outstanding, and our ability to continue as a going concern. Any forward-looking statement reflects our current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to our operations, results of operations, growth strategy and liquidity. We assume no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future, unless required by law. The safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 protects companies from liability for their forward-looking statements if they comply with the requirements of such Act.
