Esports Entertainment Group considering sale
Online betting company Esports Entertainment Group, which is situated in Malta, is considering the sale of its iGaming business after confirming the exit of its Chief Exec Grant Johnson. The company has ties with illustrious worldwide sports organisations such as the NFL, NHL, NBA, FIFA and other esports platforms while being the owner of two well known betting websites in the UK. The company is also the official esports provider to the Indian Gaming Esports Association which allows them exclusive access to a large part of the North American casino industry.
As recently as October this year, the company announced that it was “at the mercy of a creditor” as business funds ran low. Esports Entertainment Group struggled financially in 2021, and even defaulted on notes issued last year which had a principal value of £35m.
The business has initiated a process to “evaluate strategic options”, including a sale of iGaming assets due to “increasing regulatory burdens and competition.” The new CEO will be tasked with assessing the value of the online gaming assets and determining the next steps, said the company.
The announcement comes after the company faced a stretch of rocky times. Back in May the company said in their quarterly financial report that there had been “substantial doubt” about its ability to continue for at least a year. And in November, their owned brands SportNation and Redzone ceased trading in the UK, with the brands stating that they were “closing for a variety of reasons including the economics of operating a small iGaming business in the UK Market” and its inability to make a profit.
The company also revealed that it has received a “non-binding” letter of intent from a third party in relation to a potential merger. The identity of the merging company has not yet been revealed; however, it was confirmed by Esports Entertainment Group that if the deal does go ahead that they will focus on “growing esports revenue”, and the company also stated that they are confident that an agreement can be reached to benefit of both parties soon.
A few of their brands have already felt the brunt of the company’s downfall this year, with gambling websites SportNation and Redzone, which became part of Esports Entertainment Group in 2020 when the group acquired Argyll Entertainment, folding completely. Both websites were popular brands in the UK and were featured on findbettingsites.co.uk. Redzone.bet was formed in 2016, while SportNation relaunched their website in the summer of 2017, and back in the summer of 2022, was recognized for having the best UK football odds at the 2022 Bookmaker Awards. The company said last month after the announcement of Redzone and SportNation’s closure:
“In recent months, the company has reduced its spending on marketing and has been focused on retaining existing customers and reactivating past customers. We believe these efforts will have a positive effect on our results of operations.”
Regarding a new head, The Esports Entertainment Group board asked Grant Johnson to depart the company, and it was confirmed earlier this week that Mr Johnson has now left.
Esports Entertainment Group said its board has identified a preferred candidate to serve as acting CEO and will make a formal announcement regarding the appointment soon, pending formal approval.
The group then announced Jan Jones Blackhurst as the new chair of its board to try and guide the company through choppy waters.
Mr Blackhurst said: “Grant recognised the value of esports and online gambling and founded EEG on that basis.
“On behalf of the board, we wish him well.
“The company is looking forward to bringing in new leadership to work with the board to realise the full potential of our acquired esports businesses.”
The financial strife of Esports Entertainment Group will come as an alarm bell to other betting companies which operate within the UK, as governmental and societal decisions on gambling have cropped up repeatedly in the news over the past few weeks, with online bank Monzo revealing that it has seen 50,000 of its customers utilise its gambling block tool for the first time over the past six months. Football clubs have also been urged to stop gambling firm sponsorships by a fan-led campaign group, while it was also confirmed this month that celebrities and football stars will no longer be allowed to appear in gambling adverts. These decisions could have a knock-on effect to betting companies which could be restricted by new laws. It would not be a surprise to see other gambling firms struggle financially like Esports Entertainment Group.