Some loyalty programs reward you with free coffee, others with cheaper travel. But in the not-too-distant future, one plan could allow video game-loving sports bettors and iGaming players to get a better price on a Counter-Strike match or to try to win casino jackpots.
Toronto-based Rivalry Corp. is announcing on Tuesday that it plans to launch a blockchain-based crypto token later this year that customers can earn by wagering and referring their friends to the online sports betting and internet gaming operator.
Rivalry users — albeit not those in Australia or Ontario, at least not for the time being — can now start amassing an interim form of currency by using its site. That currency can then be converted into the new token when it launches, which Rivalry expects will happen in the second half of this year.
Exactly when has yet to be announced, but when the token debuts, loyal Rivalry customers will also receive them based on their history with the operator. That could keep bettors around or give them a reason to return if they’ve left.
“Our customer has to lose for us to generate revenue,” noted Steven Salz, co-founder and CEO of Rivalry, in an interview with Covers. “That is a very odd dynamic for a product. And I think that's part of why building consumer brands in online gambling is really difficult.”
IEM Dallas IS NOW. better lock in those bets before it’s too late pic.twitter.com/U8igJu4hxp
— Rivalry Canada (@rivalryca) May 27, 2024
But going forward, Rivalry users will have a little something to show for even their losses with the operator. The company says its token could be used for bet boosts or jackpot entries, among other things.
While exactly where is still to be determined, Rivalry says its token will be tradable on several crypto exchanges, using the symbol $RVLRY.
The tokens are part of a broader crypto push by Rivalry, which says it plans on making it easier for users in certain jurisdictions to bet with Bitcoin and other digital currencies. Using its Isle of Man license, Salz says Rivalry has access to more than 100 online gambling markets, all of which can have their various quirks for payments. Crypto adoption helps there, as it works similarly everywhere, can be cheaper for operators than traditional payment methods, and is always available.
Rivalry’s crypto efforts are themselves part of the company’s broader plan to appeal to a certain category of bettor who is younger and more steeped in internet culture, especially those with an affinity for esports.
'Nut jokes' incoming
In other words, the new token could be right up the alley of Rivalry’s target demographic of 30-and-under online sports bettors and casino gamblers. So, too, could the easier acceptance of other cryptocurrencies, which the company says is estimated to make up around a quarter of betting handle around the world.
“This demographic and psychographic is much more interested in receiving crypto or tokens for activity rather than fiat,” Salz said. “They don't want money. It's not as exciting for them.”
To further underscore the demo Rivalry is going after, the interim currency users will earn ahead of the token rollout is called "nutz."
“There's lots of nut jokes coming,” Salz said.
It’s time to get NUTZ 🌰🥜🌰🥜🌰🥜
— Rivalry Token (@RivalryToken) May 28, 2024
Discover more at https://t.co/SyAPlBMA3P pic.twitter.com/NLkyIIwIuc
The hitch at this point is that Rivalry’s token will not be available for use in the markets where it is under local regulation, Australia and Ontario. It will also not be available for use in the rest of Canada or the United States, as the company does not do business there.
Salz said Rivalry discussed its plan with its regulators before announcing it to ensure they remain onside of the rules for publicly traded companies and gambling firms. Yet crypto is mostly something regulated markets in Canada and the U.S. have avoided. In Ontario, where Rivalry is based, players can't deposit using crypto.
“Note: Cryptocurrency is not legal tender and shall not be accepted," the province's iGaming standards say.
But the token doesn't give you a share of Rivalry's ownership or pay you dividends, Salz said, which might raise the eyebrows of securities watchdogs. There is not even a “crypto” aspect to it yet that could run afoul of Ontario’s rule, although Rivalry is not going to test that theory in the province.
Instead, Salz said it will have all the "typical things" one could expect from a loyalty program with a gambling company.
“There's lots of these different pieces that will tie to it, and it's just going to be essentially the unit of value for rewarding behavior in and around our business and our community,” he explained.
That may ultimately persuade regulators of legal sports betting in Ontario, but there is no guarantee. So, for now, Rivalry will run its crypto campaign outside the province.
“The ‘nutz’ are essentially just loyalty points at this point,” Salz said. “I'm not saying they will approve, and we just have an open dialog with them. But I will give them credit. They weren't like, ‘No thanks,' and ‘This is crazy.’ They've been listening and engaging in some kind of dialog with us on it, for sure.”
Follow the leader
The loyalty angle has been used by other operators, albeit in different ways. For example, companies such as Caesars Entertainment Inc. have used reward programs to nudge online bettors toward brick-and-mortar casino properties, giving them points they cash in for hotel stays and shows.
Rivalry noted in its preliminary results for 2023 that it was working to unlock what Salz described as “two of the most material developments to our business model” since the launch of the company in 2018. Those are a business-to-business vertical to license Rivalry’s in-house developed games and a deeper dive into crypto.
Perhaps one obstacle in the way of deeper crypto adoption in regulated gaming is the stigma attached to it as the payment method of choice for some unregulated operators. Salz argues that while it can make that funding easier, that’s more of a byproduct of the technology itself, not something it was specifically designed to do.
“Canada follows the U.S., so I just think the more the U.S. gets comfortable with it … it will continue to help to make the case for this,” Salz said. “And I do think it'll be a great way to capture a segment of the gambling population that has a pretty large [total addressable market] that would then be more likely to pass their wagers through regulated, licensed operators.”
