Toronto-based esports betting operator Rivalry Corp. released its second-quarter 2024 results for the period ended June 30, reporting a betting handle of CA$87.8 million (US$65.1 million), down 22 percent versus the same quarter in 2023.
Gross gaming revenue was CA$7.4 million (US$5.5 million) for the quarter, a 12 percent decrease from Q2 2023. Net revenue was CA$4.7 million (US$3.5 million) in Q2 2024, a 22 percent increase from Q2 2023.
The company said in a statement that as a percentage of GGR, the net revenue margin of 62.5 percent in the quarter was the highest in company history. As a percentage of betting handle, the net revenue margin of 5.3% was the highest out of the past six quarters.
“At Rivalry, we have narrowed our focus primarily to two areas that are showing the highest potential for growth in our history: crypto expansion led by tokenization and VIPs. Alongside these focused efforts, we’re tightly managing working capital, rationalizing our teams, and cutting spend in areas that fall too far outside of these priorities,” said Steven Salz, Co-Founder and CEO of Rivalry. “Our efforts to improve margin are also driving results, achieving record margin levels for two consecutive quarters.”
A highlight for the company was in the crypto arena. Rivalry Token delivered $1.7 million in additional revenue in the quarter, with the company focusing on expansion efforts there in Q3.
Rivalry announced in May that the native cryptocurrency would be integrated into their entire product suite. That’s expected to launch in the second half of the 2024 fiscal year. Prior to the release, customers have been able to engage with Rivalry Token by connecting their digital wallets, earning rewards through on-site activity, creating more engagement that is driving upticks in site activity.
“Rivalry Token is uniquely positioned to serve a number of our near- and long-term goals to expand our geographic footprint and acquire and retain high-value players, which we are beginning to see signals of,” Salz said.
“In just a few months, Rivalry Token has attracted new customers who are twice as valuable as our average user and marked the most successful reactivation campaign in company history. Behaviorally, we see that Rivalry Token users are more active and engaged and we’re confident in the opportunities being unlocked through this technology.
“We have an extensive roadmap ahead for Rivalry Token, including new social-based products and games to drive more connected wallets and create engagement loops for players that will extend our momentum in the crypto gambling segment.”
Casino generated 60 percent of betting handle and 24 percent of GGR in Q2. The company expects to enter into a licensing agreement for its casino games “in the coming months,” creating a new B2B revenue stream.
In the statement, Rivalry also said they’ve seen success via upticks in user activity for higher-margin product offerings like Pre Made Combos, which has recorded over 500,000 wagers since its release last January.
“Rivalry has also been shifting resources toward VIPs, which is closely aligned with our push deeper into the crypto segment,” he added in the statement. “This emphasis on VIPs marks a course correction of our historical strategy that delivered exceptional outcomes for the vast majority of our player base, but under-indexed on the small percentage that drives the lion’s share of revenue in an online gambling business.
“I have extreme conviction that the significantly above-market KPI’s we have driven for that majority of players, led by our obsessive dedication to their success, when now directed toward the smaller percentage of high-value players, that within this industry drives multiple times the value, will lead to a sizeable change in Rivalry’s business outcomes.”