Inside Asian Gaming

January 2017 inside asian gaming 35 In Focus are a proven draw. The annual League of Legends tournament filled the Staples Center this past October as tens of millions more tuned in. The 2015 finals drew 36 million viewers online. MGM Resorts is hosting a major tournament in February at the Grand Garden Arena with a top prize of US$450,000 – not bad if you’re one of the members of the winning four-player team. The regulation of sportsbook bets on these terrestrial events is what the state of Nevada has been looking at, but the real action will remain online, where total wagering handle worldwide was about US$3 billion in 2016, according to Chris Grove of Eilers & Krejcik Gaming. Annual handle by 2020 is expected to exceed US$12 billion. “Over 90% of online sportsbooks offer it,” said Grove, who added that in-play betting is a key trend. “Game integrity issues are still being worked out; regulatory issues are being wrestled with by many jurisdictions.” There is no shortage of “Wild Wild West” examples of online eSports betting around the globe, but the fact remains that eSports is an activity many people are willing to bet on. And their numbers and characteristics are of serious interest to an industry that is seeking ways to modernize its product offering. In the US, the eSports audience size (either active players or passive consumers of eSports content) is 41.7 million, said Grove. Some 70% of those are 21 or over, and 37% are willing to pay US$99 or more for an eSports event ticket. Is there a propensity to gamble? “Everything I see in my research suggests that there is,” said Grove. “They are two times more likely to gamble online than the typical online population and 60% report having used a daily fantasy or sports betting site.” About US$715 million was wagered by eSports fans in the US in 2016. “I believe 2016 marks the year that eSports makes the transition from a vibrant subculture to a truly mainstream phenomenon,” said Grove. “To underline that point, the day (G2E) kicked off, the Philadelphia 76ers announced that they had purchased an eSports organization.” Not to be outdone, the next day the Sacramento Kings announced that they too had taken a controlling interest in a professional eSports organization. At the same time, the convergence of eSports and gambling is accelerating. In the last 12 months, we saw the first eSports lounge open in a Las Vegas casino. In November, sportsbook William Hill accepted the first legal bet in the US on an eSports “eSports is an activity many people are willing to bet on … and their numbers and characteristics are of serious interest to an industry that is seeking ways to modernize its product offering.” match. And the growing conversation around skill gambling has brought eSports specifically, and video games more generally, to the front-of-mind for regulators, casino operators and suppliers. Such investments are only catching up with reality, in the eyes of video game developer Blaine Graboyes, CEO of GameCo. “Gamers are the largest underserved demographic today and a lot of that has to do with gamer stereotypes,” he said. “We’re not kids anymore in our parents’ basement; we’ve grown up. We over- index for education and income and we’re really looking for a place that treats us like VIPs. No place is better at the VIP experience than the casino.” WHAT TO DO ABOUT IT? Speaking at a separate eSports session at G2E, Adam Krejcik, principal at Eilers & Krejcik Gaming, said the commercial gambling industry in the US is engaged in no small amount of soul searching regarding the best path to the next generation of customers – and eSports is part of a larger conversation. “Some see the answer as a move away from the generally individual experience of the slot machine tomore social games; others see injecting an element of skill into games to draw Millennials from restaurants and nightclubs to the games on the casino floor,” Krejcik said. “In that context, the integration of eSports into the product mix of commercial gambling seems like a surefire strategy. “eSports is highly social, it’s dominated by Millennials with higher-than-average disposable income and also incorporates elements of skill with random elements as part of a vast gambling ecosystem. But overlap between eSports and commercial gambling has been limited to date. “International markets and traditional online sportsbooks are still in the early stages of developing eSports betting products. In the