One of the few glimmers of hope our industry saw during the lockdown was the rise of esports betting.
Massive spikes in viewership and player acquisition have meant that some may now be viewing esports wagering as ‘Corona Proof’ and a sure thing for the future.
Eirik Kristiansen, Chief Executive Officer at Pixel.bet shared his perspective with iGF on the future of esports betting and what our industry should be doing to ensure this sector reaches its full potential.
What was the biggest lesson you learned because of the pandemic and how will you use it to your benefit in the future?
“With the whole world facing a global crisis, we regretfully saw a lot of hardship in many sectors. The remaining companies had to rethink the way that they operate.
Some sectors got hit harder than others, and even though most of the world is severely impacted, the online sectors, when all things are considered, is doing quite well.
As a forward-leaning endemic esports operator, we were already taking advantage of different technologies to enable us to pretty much work from anywhere in the world.
This gave us the ability to continue our day to day business, as we did before the pandemic hit.
We did, however, have some challenges with other verticals outside of esports, as well as the obvious constant worry for all our employees and their family’s well-being.
We implemented clear guidelines and are continuously following up with each person working within Pixel.bet, to ensure that we do what we can to decrease the impact of the pandemic.”
Esports was one of the few product verticals that experienced an increase in activity during the lockdown. Why do you think that is? Is Esports ‘Corona proof’?
“COVID-19 put traditional sports on hold for several months, which is likely to be the main reason for the sudden and parabolic uptick that esports betting had; immediately after the more traditional betting options disappeared.
Esports also saw a huge increase in viewership, partnership, and participation, which naturally correlated to betting on esports seeing a huge surge.
The viewership reports from Twitch show that they grew more than ever during the Q1 of 2020 and continued this growth into Q2.
It is important to note that esports viewership, partnership and participation has continuously grown over the past years, month on month. However, this rapid increase we are now seeing is definitely ‘out of the ordinary’.
The fact that esports is ‘immune’ to social distancing, since games can be played from anywhere in the world, makes it incredibly resilient in a time where most are confined to their homes.
Obviously, larger offline tournaments were affected, but since there is no need for physical contact between the players, it clearly holds an advantage over traditional sports.
Overall, the lasting uncertainty of the pandemic will require all companies to present agile and innovative solutions, and this is already in the blood of anyone that truly lives for esports.
Though nobody could be prepared for a global crisis as we see now, esports is surely in a great position to continue to grow and evolve due to its inherent forward-leaning and innovative nature.
The impact of the pandemic is surely something that will have long-lasting effects on society, and whether esports is ‘Corona proof’ or not is probably up for debate, but I do know that esports continuously brings people together, even when we are apart.”
Despite the rise in activity, esports still has a way to go before it matches mainstream sport levels of betting activity. How long before it reaches these levels and what will it take to get it there?
“Esports is one of these words that’s on everybody`s lips, and it’s hard to have a conversation about the future of sports without mentioning the largest growing segment of them all.
Not only is the growth disproportional to all other traditional sports, but it is also growing so fast that it’s projected to become the biggest of all sports within a decade.
It thus makes sense that the betting on esports will follow with the immense increase in viewership, but there are still some key parts that need to improve for esports to reach its true potential.
Firstly, there is a clear need for stricter regulation and control to combat match-fixing and fill other gaps within the competitive scene.
Pixel.bet initiated a partnership with the Esports Integrity Coalition (ESIC) back in 2018, to both aid the coalition in providing a fresh perspective, but also to collaborate on the challenging and inevitable future of esports betting becoming ‘mainstream’.
We are also a part of a suspicious betting alert network to reveal match-fixing as it happens, and this is a responsibility Pixel.bet takes very seriously.
This is not only important to us as an operator but also to help guide the evolution of esports in the right direction for everyone.
Secondly, there needs to be better markets for betting on esports, and specifically in-play or live offerings.
The clear number one in esports in terms of betting volumes over the past few years is CS:GO, and much of the reason is that it has a larger volume of viewers, players, and also offerings for the game.
One of the challenges other games in the 5vs5 category (like LOL or DOTA2) have had is that it is incredibly hard to set accurate odds in real-time for these games.
Where a game like CS:GO has a limited amount of variations in weapons, and no different characters to pick from to affect the flow of the game, a game like DOTA2 has ‘endless’ combinations of items and heroes.
Just changing one hero will change the synergy of their entire team, and the same goes for changing certain builds or items.
This makes it nearly impossible for any human to accurately predict the outcome of a game at any given time, which is why we used to only see pre-match offerings and live odds that were less than favourable for the bettors.
All of this is changing due to innovative companies using A.I and machine learning to set the odds and manage the risks.
So, even if the game changes every two weeks due to an update and has close to endless combinations of heroes and items, the computers predict the outcome of games both faster and more accurately than a human ever could.
This enables us to provide higher odds, broader markets, more live offerings and create a significantly better experience for the end-users.
Lastly, it is harder to convert the older generation to watch and bet on esports, whereas the next generation has grown up with both esports and accessible betting aspects.
Almost no games today are without aspects of gambling, loot boxes, crate drops, pack openings etc. In many ways, you could say that the average player of any computer or video game has been groomed by the game creators to become bettors.
This means that every year there will be a new surge of viewers, participants, and players, which eventually will result in huge adoption of esport betting as well.”
Did you see a rise in traditional sportsbook customers crossing over to bet on esports when the live sport was off? If so, do you expect to retain this demographic, or have they all gone back to normal sports betting as live sport returns to our screens?
“Pixel.bet is an endemic esports betting operator, so we could not see crossing from traditional sports within our own platform, but there was a huge influx of new players.
We could see that the average age of the ones placing bets on esports grew along with the amounts of new players that signed up.
Now that most sports have returned to ‘normal’, we do not see any signs that betting on esports will slow down, rather the opposite.
The growth in the esports betting segment continues with an even higher pace than before, even though it is not as parabolic as it was in April and May.
The rise of esports participation worldwide during this global pandemic surely had positive impacts for esports betting. So even though esports is still in its early days, it has been becoming more mainstream and its evolution was propelled during this pandemic.
I also believe that esports is making people more comfortable with the idea of online socialization.
Additionally, traditional sports fans may now be more comfortable with using Twitch or YouTube, which in turn is breaking down barriers for the older demographics and resulting in more people getting their eyes up for esports.”
The game publishers hold most of the power when it comes to how a game is integrated with a betting platform and/or brand. Historically they have been very hesitant to make these sorts of partnerships. Why do you think that is and is this stance likely to change soon?
“Data is everything, and if the game publishers do not want to partner up with betting platforms it surely creates a lot of challenges for the operators.
I’m certain this hesitation in partnering up with betting operators is mostly due to the bad reputation that gambling still struggles to rid itself of; due to both companies disregarding player safety and targeting minors.
The media have also painted an inaccurate picture of how betting is today, where we now know how gambling can be both safe and fun in a controlled environment.
Frustration regarding the lack of regulation and how the underage betting market seemingly grew without any form of intervention, was one of the main reasons that we founded Pixel.bet in the first place.
We strive to be a shining light in the process of shielding minors, achieving a fully transparent and safe betting experience, while making sure we do not remove the joyful aspect responsible gaming provides. I am confident that the game publishers eventually will see the huge potential that comes with partnering up with betting operators.
I believe it’s up to all of us to prove to the game publishers that responsible gambling and player protection is the most important responsibility we as betting operators hold.
We can show them that betting on esports can be not only fun but completely safe for the players.
So, let us all do our part to make sure the future of esports is not only bright but a quasar of hope for a safe and responsible evolution of gaming.”
Editor’s Note: From catching up with Eirik it seems clear that the future of esports is very promising and it’s perfectly positioned to be the number one sport in 10 years; representing excellent news for the operators.
This sector has some obvious, innate advantages that cannot be matched by any other sport. However, without the complete backing of the game publishers, it will never reach its full potential.
It’s up to us as an industry to continue making forward steps in consumer protection and game integrity, allowing outside entities like game publishers to view the business of gambling as a more attractive proposition to partner with.