Toronto, On.-based Rivalry Corp. announced a whopping 98% year-over-year growth in handle in its Q2 2022 earnings report, hitting $38.4 million.
Not only that, but the revenue for the legal sports betting operator also reached $5.3 million, a 60% jump over last year, and its gross profits were $2.1 million — a 206% increase over Q2 2021.
"With a number of impactful product releases, marketing, and operational initiatives slated through the rest of year, we are hungry to demonstrate to the market the inherent operating leverage in our model," Steven Salz, Rivalry Co-Founder and CEO, said in the press release.
Compared to last quarter, Rivalry also saw some strong growth in reporting an 11% increase in revenue and a 201% jump in gross profits. The handle, however, shrunk by 4%.
New Markets
Rivalry, which has held a license with the Isle of Man since 2018, was part of the launch roster when sports betting in Ontario went live this April, while having also started taking bets in Australia as of May.
Despite being the hometown market, Ontario’s handling of sports betting has been a challenge for Rivalry: When questioned about the difficulty in working in the province, Rivalry officials simply said "it's been OK," as some of the layers of regulation and marketing were more challenging than anticipated.
"We are not overly disappointed," they concluded.
Crawl, Walk, and Run Strategy
Unlike most sportsbook operators, Rivalry takes a different approach in its promotional efforts in a new market. While larger operators have approached launching new markets by unleashing a large budget in boosts and free bets to gain customer acquisition (something that we are now starting to see scaled back), Rivalry has taken a cost-effective customer acquisition strategy: spend low at the beginning and ramp up based on the market.
Rise of esports
While it does offer 'traditional' sports betting, Rivalry has a strong emphasis on esports (League of Legends, Dota 2, CS:GO, etc), and just like the professional sports calendar — where every state in the U.S. has reported lower handles in Q2 — Salz noted that April-June is also a less popular time for esports.
However, it didn't slow down enough to prevent the operator from posting record numbers — with even bigger things expected.
"We are very encouraged by our performance in Q2, putting up significant year-over-year growth across all core metrics, and sequential growth on a number as well, despite what is a seasonally quiet quarter in the esports calendar."
Rivalry also sees its customer base for esports as more forward-looking, due to the younger betting audience compared to the more traditional sports bettor.
The operator also forecasted Q3 as shaping up to be a "strong seasonal period," with July the best month yet for the company with $23.3 million in handle — up 66% from June.
"Looking ahead, we are excited about the second half of the year," said Salz.
Despite being a brand with a strong esports focus, the NFL is still king in the North American betting market and Rivalry expects to see its handle increase at the start of football season, although it was mentioned during the earnings call that Rivalry’s spending will have to jump in order to grab market share.
