Interview With CEO Grant Johnson
Question: Now, Esports continue to gain in popularity with nearly 400 Million Fans globally and growing for our viewers today, let's start with, what are Esports, and where does Esports Entertainment fit into this rapidly growing market?
Answer: Okay, effectively Esports is professional video game play. Where players play either in a one on one environment, or they play on teams, and they play against each other in organized tournaments for cash prizes. Where we fit into this huge growing sector of the entertainment market is, we offer a number of different options, for people to place bets on their favorite player or their favorite teams, in areas where it's legally allowed online wagering.
Question: What's the essential value proposition why should investors take an interest in Esports Entertainment today?
Answer: For those investors who have been following any of the news on our company, we recently closed our first round of commercial investment, with some wall street banks. J. Gunnar and Dinosaur Securities. These funds are going to be used for the first time to allow us to, raise awareness in the market attract players to our platform, so its, now is the perfect time. Because, for the first time we're going to be able to really get out there and put our message out to this huge market.
Question: Grant, how many affiliates do you have today?
Answer: Currently we have nearly 600 affiliates, and they come from two different categories, we have about 180 teams. These are professional teams. These would be tier 3, tier 4 teams, which are local teams, that have signed on as affiliates, and the remaining affiliates are what you would consider YouTube personalities or streamers. that they broadcast, whether they're gameplay or commentary on Esports, they've signed on with us to do revenue share arrangement.
Question: Grant, what makes your platform different, or better than the competition?
Answer: We offer something unique, in that we have the only, what is referred to as a bet exchange. And a bet exchange, unlike a traditional sports betting set where the player bets against the house, the players bet against each other. So, player A decides that they like team Liquid, and they want to give whatever odds they want to give 1.5, 2, and then player B, they may be a fan of Energy and they don't believe liquid is going to win, they believe those are good odds, they would match that odds. And we also have pool betting so we're the only company that offers exchange, and pool betting.
Question: Grant, let's talk about your business model how do you make money?
Answer: Okay, as I just explained we have the two different platforms, on each platform we take a percentage, a commission if you would off the winner's pot. Like in a poker room environment where the house takes a rig, from the winner's purse. So that's how we make revenue on the exchange, and on the pool betting, where the fans of team A bet in X number of dollars into the pool against the fans of team B they bet X numbers of dollars into the pool, whichever team wins we take a percentage of their winnings as well. So, we're player agnostic we don't care which team wins, which team loses in our environment. We never take exposure, so for our investors that's probably important the investors to know, we could never be offside like a bookmaker can. And we have multiple revenue streams we will also be launching a third product next year, but currently, that's how we make money.
Question: In May, the U.S. Supreme Court ruled in favor of online sports betting, opening up a significant market opportunity, how big is the opportunity globally, and what's the timeline for changes in the U.S. and will you be able to take advantage of those changes?
Answer: Well globally, the market is expanding so quickly it's hard to keep tabs on the numbers. It depends on which groups you look at the approaching 400 Million in terms of the fan base, currently. Some analyst project that number will eclipse, half a billion by 2020. Forbes, recently came out and said that they anticipate that the online gambling, on that market, from that fan base in 2020 will hit $23 Billion. So this is a rapidly expanding space, globally, as far as the U.S. is concerned, with the Supreme Court ruling, that definitely cracks the door open for opportunities as the states are now setting up their regulatory boards for online gambling I think there are six states, that are at the final stages now, expected to be 15 next year, and in a few years, eventually it will be around 30 some odd states. For us it's a little early stage to, bring a gambling product into the American marketplace, so what we're going to do, our strategy for the U.S. in the new year, is we're going to be launching a Skill Blaze platform, which is acceptable in 40 states. Where people will be able to play in cash tournaments for prize money. And, that will be our first U.S. facing product.
Question: Grant, tell us about some of the key players on your management team.
Answer: Christopher Malone recently joined the company, that really strengthens our financial team, he's got twenty years experience as a CFO for publicly traded companies, which as you can imagine takes great stress off me, when it comes to audits, and managing the financial back end of the company. From an Esports perspective, we have Randy Greenback who's 25 years in game design, started his career with Electronic Arts. He is our creative genius, Brian Cordry, has been a professional Esports team owner. He's our head of Esports, on the gambling side, we have Yan Rozum, he's our chief technical officer, he's built over 60 online gambling, sports gambling sites, and Sandra Osterlund, she's been a gambling affiliate manager for over 5 years. So we've taken, you know people who have extensive, experience financially, a wealth of experience from Esports, and married that with people who have gambling expertise. So the management that is the big asset, and we've been able to bring in experts from those three different areas, under one roof.
Question: And you will begin generating revenue in the first quarter is that correct?
Answer: First quarter, next calendar year, yes.
Question: To recap what's the main takeaway for investors, why should they consider owning your stock today?
Answer: We're the only publically traded company that's focused on gambling in the Esports sector, Esports sector is the fastest growing sector in the entertainment industry, we recently secured a substantial investment from the banking community. To allow us to now, start to execute our marketing plan. We have the only Esports bet exchange, so we don't take exposure and for our investors there is less risk. And we offer, also pools as well, with the new product coming, so if people are interested in the sector, to be frank, we're the only company that they can invest in.