Bear with me here, because this is going to take a minute.
In simpler times, a young athlete — a high school football star, say — could dream of opening a newspaper and seeing their name in bold print in the sports section, as a local columnist predicted their team beating their crosstown rivals.
It’s a quaint notion. It’s also the kind of thrill Toronto-based betting company Rivalry Corp. gave a group of up-and-coming athletes last weekend, albeit in a more modern and, well, wagering-related way.
Instead of a football player, picture someone who plays video games competitively. And instead of cracking open a newspaper, imagine them opening a sports betting app or site and seeing themselves as a -200 favourite to beat their opponent in the next game.
Maybe it’s a bit of a stretch, but that’s the sort of thrill Rivalry provided to players and teams who took part in a Counter-Strike 2 tournament the company hosted in Toronto along with their partner, esports influencer Mohan "Launders" Govindasamy.
hope you guys are ready for a crazy series from fluffy aimers and for fun pic.twitter.com/Orng7aUC14
— Rivalry Canada (@rivalryca) April 22, 2024
More than 550 people attended the event, and the livestream attracted more than 55,000 unique viewers, according to Rivalry. “Launders LAN” also had a $10,000 prize pool that was fought over by 32 five-player teams (some of them from the U.S.), double the 16 who turned up for another Rivalry-hosted esports event in January who were there to duke it out over $5,000 in prizes.
But, the pièce de résistance of the latest event — at least in my mind — was that Rivalry, which caters to esports-loving bettors, taking action on titles such as League of Legends, Call of Duty, and, yes, Counter-Strike (the company even offers same-game parlays for competitive video games), set lines for the matches played between the teams at Launders LAN.
The players who participated in the event were good enough and competitive enough in Counter-Strike — a massively popular first-person shooter game that has been around for more than 20 years — that Rivalry was able to hand enough data over to Pinnacle, Rivalry's oddsmaker. Pinnacle was then able to whip up pre-match betting markets for the event.
“All these teams, when they're not playing, I can see them on their phone on Rivalry just checking the odds,” Rivalry CEO Steven Salz said in a recent interview with Covers. “And they're just laughing with each other and loving it.”
A different approach to differentiation
It was a fun moment for those teams, and Rivalry considers it a successful marketing effort for themselves, as the Toronto-based online gambling company continues to use esports and a certain vintage of internet culture to attract new customers and get them wagering on their platform.
“Over that weekend, 75% of every single dollar wagered on those games was from newly acquired first-time users on Rivalry,” Salz said. “So it works incredible for acquisition as well.”
Rivalry’s platform continues to grow, extending beyond esports such as Counter-Strike into traditional, stick-and-ball events and online casino products. The company is striving for a younger clientele than you might get at more established online sportsbooks, hoping to attract bettors earlier and keep them wagering longer. Notably, the bookmaker has said almost 80% of its users are under the age of 30.
The blending of online betting with in-person events, and the embrace of esports and the LAN party, could help Rivalry stand out from the pack for sports betting in Ontario, the only province in Canada with a competitive market for online wagering and iGaming. There are nearly 50 authorized operators and more than 70 iGaming sites active in Ontario’s market, Rivalry included, so unless you’ve got a massive marketing budget, attracting new users can take a bit of creative thinking.
“We're using eSports and gaming as a low cost of customer acquisition funnel to a demographic of bettor, and for a generation that grew up on the internet, gaming and eSports is kind of the centerpiece of their internet culture,” Salz said. “Therefore, it has been an incredible way for Rivalry to build a brand and build a funnel to users. That user, ultimately, though, is still a gambler, so they're coming in and wanting to bet on their favorite sport, but they also want to play a hand of blackjack or play ‘Cash & Dash,’ our original game, or whatever it may be.”
Party time
Rivalry recently reported a betting handle of $423.2 million for the year that ended Dec. 31, up 82% from 2022. Revenue was $35.7 million for the company last year, a 34% rise compared to the previous year. Rivalry also reported a net loss of $24.3 million for 2023, albeit shrinking that deficit by 22% compared to the $31.1 million shortfall recorded in 2022.
The bulk of betting with Rivalry last year was done through its online casino, which accounted for 52% of its total handle for 2023. The wagering growth came as the company expanded its casino offerings, such as by adding online slots in October.
Sports, however, remains a big part of the game plan for Rivalry going forward. Not every potential customer is looking for slots, at least not at first, and esports and traditional sports are a way of acquiring new users.
Part of the esports culture Rivalry is trying to tap into is LAN, short for local area network. The LAN party is a time-honoured tradition in gaming, wherein friends and foes get together in one location, connect their devices, and then compete with or against each other for hours. It’s the type of event Rivalry is aiming to replicate with events such as Launders LAN, albeit with players who aspire to go pro playing Counter-Strike.
congratulations to @FLUFFYAIMERS for coming in on top at launders lan! 🥇 pic.twitter.com/5x5HYm4p7q
— Rivalry Canada (@rivalryca) April 22, 2024
“We'll probably do another one,” Salz said. “They work for us. [It’s] great for acquisition and great for brand-building.”
There are rules in Ontario for how an operator can market themselves, and that extends to the type of promotion Rivalry did with its LAN event. There are guidelines, for instance, that prohibit public touting of bonuses and other inducements, as well as the use of influencers “who would likely be expected to appeal to minors.”
“Our understanding from [the Alcohol and Gaming Commission of Ontario]… to an extent, they want operators to use their common sense and best practice and understand the constraints of the new regulation and anything that they are a little bit iffy about,” Salz said. “Sure, you have the regulator, but beyond that, you need to just use your brain, basically.”
While Launders was there to pump up the crowd and thank Rivalry, there was no “hard sell” from the company, Salz said, as the company tries to avoid being heavy-handed with promotions anyway due to the costs involved.
The LAN event dovetailed with the company’s approach to attracting Gen Z and “digitally-native people” in general, the CEO noted, which is using creators and influencers to align the company with that audience rather than bombard them with ads.
So even if Rivalry had the marketing war chests that some of its competitors do, it would likely continue with its current strategy, which it sees working.
“It's still the way that we would approach the demographic, I think, either way,” Salz said.
