Colorado is once again at the forefront of a budding industry.
In 2012, it was legalized marijuana. Now, it’s esports betting.
In mid-December, it was announced that GameCo, a Las Vegas-based gambling company, had reached a partnership with US Bookmaking and Sky Ute Casino to bring the first-ever esports dedicated sportsbook to the US.
As Esports Insider said in its story about the partnership, the esports betting platform will be available digitally at the Sky Ute Casino, while also being offered to residents and visitors in the state online through desktop, mobile, and interactive devices.
PlayColorado was told by Blaine Graboyes, co-founder and CEO of GameCo, that the plan is to launch the esports betting app in the first quarter of this year.
“March 1 is our broad target. It’s going really well, so it could be a little bit sooner,” said Graboyes.
When it does, Colorado will once again pave the way for 2021.
As Graboyes said:
“That’s a great question. I would say at the end of the day, it was more about business development outcomes than intentions. Though Colorado was definitely a jurisdiction we were very excited about. And I would say a lot of the reason we were excited about Colorado was the mix of population, tourism and demographics. It’s a fairly young state. It has very young visitorship. And it has a pretty large population and tourism, so it’s a nice size market.
“What I would say that’s exciting about Sky Ute is the collaborative nature of their tribal gaming authority, who are their regulators. Particularly around in-play betting. In jurisdictions that allow in-play betting on esports, you typically see 50-70% of handle on the in-play betting side, as opposed to the prematch side of things.”
As for the partnership with Sky Ute and US Bookmaking, Graboyes made clear it was about the collaborative approach to the esports betting markets.
He also made clear that all esports betting offerings will be on the up-and-up. The Esports Integrity Commission (ESIC) is the governing body for the industry.
“We essentially have three pillars, which is we will only offer wagers in markets on top tier events and leagues,” Graboyes said. “Typically referred [to] as tier one, but I think that’s a little bit open-ended because it’s kind of a self-defining term. But from our standpoint, we’re offering wagers in markets on the top esports organizers and leagues.
“The second is that we’re only offering wagers in markets on official server data. Meaning we will never use scrapped OCR data, which is the vast majority of what is being used everywhere else. And then the last pillar is that all wagers in markets are overseen for integrity by the Esports Integrity Commission. We feel with those three pillars in place we have a very strong policy from an integrity and policy standpoint, but also a very substantive set of wagers and markets we are able to offer.”
What is the potential for esports betting in Colorado?
Since GameCo is the first and only esports betting platform in the country, what is the potential for esports betting in Colorado?
In a word, ginormous.
“We’ve done some modeling and we definitely believe it’s a seven-figure NGR market as it develops,” Graboyes said. “So I think that’s what’s possible. I think the other thing that’s really exciting about, in terms of what’s possible, is I believe GameCo and Sky Ute and US Bookmaking are really setting a precedent and a very high bar for what’s possible in the US, because as you said, it hasn’t really taken off. I also think it’s possible that Colorado is the first state in the US that esports is a top-five sport, which I also think is very exciting.”
At the same time, Graboyes, GameCo, Sky Ute, and US Bookmaking have the potential to set the standard and pave the way for the rest of the esports betting industry in America.
One of the ways that can happen is through cross-channel promotion to reach the sports bettors in Colorado.
Given how people have responded to the Colorado sports betting market since its launch on May 1, you can see why.
The November handle for sports betting set another record when it brought in $231.2 million.
“Absolutely. I’ve made my career on firsts,” Graboyes said. “We will be the first esports book in the US. I do think we will be setting the precedent and example for the rest of the US, in terms of how, what, why this is important.”
How to grow the esports betting industry
The key now is to find ways to grow the esports industry.
As Graboyes said:
“What I think is really interesting about esports betting is, it’s where consumers in esports are spending their money. So what I think is a challenge for the esports betting industry in general is consumer spending is miniscule. If the industry is a billion dollars in 2020, the consumer spending side of it is probably 15% of that. If we can’t get consumers to spend money, we are not going to grow the esports industry as a whole.
“We’ve got to start monetizing consumers. And depending on the data you look at, we are one or two orders of magnitude under consumer spending in traditional sports. Single digits compared to double or triple digits (for sports betting). We’ve just got to work on that as an industry.”
In order to make that happen, Graboyes said it’s all about esports betting.
That’s how the esports industry as a whole takes the next step, or 15.
When it comes to that consumer spending he talks about, he said it’s very clear that they want to spend their money on wagers.
“Depending on the numbers, you see all kinds of different numbers between $13 billion and $20 billion worldwide,” Graboyes said. “A lot of that is gray or black market. We’re trying to bring this into the regulated space so that it’s properly managed and regulated. Clearly it’s a much bigger consumer spending opportunity. Probably about 75 times the size of consumer spending elsewhere in esports.”
What and who to focus on
The other major issue is the people the esports betting industry should put their attention on.
Should that focus be on sports bettors and gamers at casinos in Colorado?
“I think it’s in some ways both,” Graboyes said. “There’s definitely an overlap between sports bettors and esports bettors. There’s a lot of different data on it. I would say the overlap there is somewhere between 10% and 30% between sports betting and esports betting. We believe that the overlap between esports betting and online skilled gaming or land-based skilled gaming is very high.
“That’s definitely one of the reasons we’re entering the esports betting space as a way to develop one-to-one relationships and marketing channels with these younger customers for our iGaming products as well. So I think there’s a few Venn diagrams you could create. I also do think there’s probably a large market of esports that have no overlap with anything else. At the end of the day, I would probably say it’s all three. But what’s exciting and why we are doing this is because of what we see as the future overlap from a marketing channel perspective between esports betting and iGaming.”
Need to get gamers
One of the ways Graboyes is looking to attract the Colorado sports bettor is through education.
“We need to educate them about esports and why it is exciting,” he said. “Why it is a sport. Dispel stereotypes that these are kids in their parents’ basement who aren’t athletes and that these are professional athletes competing at world-class levels.”
But if the esports industry truly wants to reach the Mount Evans (highest peak in Colorado) potential, it needs to attract gamers to esports betting.
“We need to educate video game enthusiasts, gamers, about betting, and esports betting in particular,” Graboyes said. “We need to look beyond saying, ‘Well, we need to get the esports enthusiasts into esports betting.’ It needs to be the broader category of gamers. And what I think is really exciting is there’s some amazing educational and entertainment technologies that are coming to market now and that we are working with, that really get you into the game. Help you understand what’s going on. Help you really break down the skill and strategy of these players.”
Graboyes has a plan to lure gamers to esports betting.
“I love the sports betting shows that have popped up around traditional sports, where you’re really getting into it,” he said. “Helping to explain the odds. Helping to understand the markets. Giving inside information, not integrity inside information, about the games and players that might not be common knowledge. That’s exactly the kind of entertainment and educational content that we’re partnering with folks on in terms of esports betting.”
Colorado’s remote signup played a big role
The other way to make that happen, and why Colorado is the first state to have an esports dedicated sportsbook in the US, is the remote signup capability.
“Massive. Massive. Absolutely, 100% massive,” Graboyes said. “The other was that the platform we’re using from Askott Entertainment, is an HTML 5 responsive site. Works great on mobile. Works great on desktop. But mobile funding was absolutely a critical consideration. And, in fact, other than Nevada, I doubt we will enter, at least in the next year or two, any markets for esports betting that don’t have mobile funding.
“It’s just not in alignment with this type of consumer. The Gen X, millennial and emerging Gen Z is a mobile-first consumer. Our offerings both in iGaming and esports betting are absolutely mobile-first products and experiences.”