Esports Entertainment Group CEO Grant Johnson believes esports has found its heyday during the COVID-19 lockdown and has now entered the gaming “limelight”.
Johnson was cautious not to suggest there were any real positives from the pandemic that has killed over half a million people globally to date and destroyed many businesses, emphasizing that he was commenting only on the resulting changes to the igaming and esports industry.
He added that the pandemic has also hastened states’ ambitions to set up regulatory regimes and that many have been positive towards esports.
Speaking on a panel at the CasinoBeats Malta Digital conference yesterday afternoon, Johnson said: “It did absolutely bring esports into the mainstream, you now have esports tournaments broadcast on TV in the states, which never would have happened if the NBA and NHL finals were on. For our business plan, it’s really brought esports into the limelight”.
Other panels members, in particular Net Gaming Europe CEO Robert Andersson and Flutter Malta chief financial officer Cormac O’Brien, said they had seen notable upticks in the online poker vertical while sports betting was decimated due to the shutdown of sporting events across the world.
O’Brien highlighted the benefit of Flutter’s presence in the US and Australia, where behind-closed-doors racing continued throughout the lockdown, helping to counteract the loss of revenue from sports betting in Europe.
RB Capital Advisors co-founder Ben Robinson said that they had been seeing a lot of engagement from companies looking to explore M&A opportunities, but was careful to point out that true valuations can be difficult during a crisis.
Robinson said that, while upticks in certain verticals may be helping companies to weather the storm, they are likely to level out once the crisis has abated. Only then, he said, can true valuations be made.
Johnson added: “As long as you have two willing partners, you come up with a structure and it’s going to be a combination of future benchmarks, valuations on revenue or EBITDA and then cash ad equity, so that when we come out of this the owners are going to participate in the upside multiple when things get back to normal – whatever normal is.”
Having launched an IPO during the crisis, Johnson said that being listed on the Nasdaq had enhanced the company’s access to capital during the crisis, a sentiment that O’Brien agreed with.
Grant also pointed out that with US and Chinese relations currently under pressure, US investors are looking for alternative investment options, opening doors for igaming and esports providers as there’s “excess capital looking for places to go.”
For all the silver linings, however, Robinson argued that publicly listed companies will ultimately come under more pressure after the coronavirus crisis eases.
“The real winners here will be cash-rich private businesses who are able to move more rapidly, they’re more agile and, obviously, can take advantage of slightly reduced competition,” he said.
