Sharpr revealed yesterday that one of the most famous North American Esports organisations, OpTic Gaming, and a number of other partners are backing a new venture that sees them seeking to raise funds to establish a brand-new betting service.
As a founding partner, OpTic Gaming has already signed a letter of intent to work with former EBET executives Bart Barden and Jason Finch, as well as RedZone Digital, to kick start a new company, which will operate under the name NextGen Wagering.
The inclusion of Barden and Finch in the process is not unexpected, given that EBET moved away from esports in August 2021, and both Barden and Finch were let go by the company as a result.
Presently, the idea is being offered to a number of potential investors who will be reassured to learn that the enterprise looks to be backed by Hersh Family Investments. This company has been long-term backers of both OpTic Gaming and Envy Gaming.
Image credit: OpTic Gaming
Idea Germinated at October Meeting
Sharpr reported that the idea for the new business was germinated at a meeting back in October between Bart Barden and the CEO of OpTic Gaming, Hector Rodriguez.
Their idea was for NextGen Wagering to become a “one-stop-shop for fans to wager on the events that matter to them.”
This would not only mean traditional forms of sports betting but would also allow fans to bet on esports, as well as other influencer events and more besides.
The idea of the partnership is for NextGen Wagering to use OpTic Gaming’s standing with younger audiences to allow them to “tap into younger audiences via social content”.
The design of the product will see several different divisions of the company:
- A content wing to acquire customers and seek affiliates
- A prediction, fantasy and skill-based gaming section with both free-to-play and real cash gaming options.
- A quality new sportsbook with in-house trading teams, data and odds feed etc.
- A white-label solution that can be offered to other top professional esports teams, streamers and influencers.
Funding Sought & Projections
To set up the company, the team behind it are seeking to raise around $7.5m in a “seed convertible preferred stock A offering”, with the closing date for the first round of funding set for April 30th, 2023.
If the fundraising is successful, then the new company aims to have its NextGen Wagering service fully operational within 24 months of the completion of the fundraising.
A significant proportion of the funds raised will go towards purchasing technology and other assets from EBET’s former esports vertical, which is now no longer in operation.
These assets and tech will then be used to develop the new company’s own esports betting products and more besides.
Early estimates from the company, revealed by the presentation obtained by Sharpr, saw the company claim that it would generate around $73.1m over five years, of which $60.9m will be required for the costs incurred.
That would give the company total projected EBITDA of 15%, around $10.4m.
To achieve that, the new company would need 200,000 monthly active users by 2027.
One issue that Sharpr points out could be an issue is the fact that the new company has indicated it wants to initially focus on esports within the United States.
As Sharpr point out, the fragmented state of esports betting in the USA at the moment could make this a difficult and somewhat costly option.
This is especially the case with the requirement to procure licenses in the few states that offer esports betting. An issue which could quickly become expensive.
With big names such as EEG moving out of the US esports market, to move back in at such a time is certainly a risk, but one that could pay off if the esports betting situation in the United States improves over the next couple of years.