- Esports global revenue will reach $1.6B by the end of 2024, a 21% increase from 2021.
- Crunching the numbers reported by the biggest players in the esports betting scene, we estimate the overall esports betting market to be worth around $960M by 2026.
- The biggest potential for growth in 2023 is the legalization of esports betting in US.
When the pandemic hit in January of 2020, it was unclear what its effect on sports would have. Shortly after, around March 2020, games and seasons started to get cancelled. Traditional sports would find themselves in the shadows of the pandemic. Esports, however, did not have to go anywhere. Esports was built on the online play; they did not have to cancel seasons, they just had to move them online.
The NBA missed their revenue projections by $1.5 billion, losing out on in-person game nights in arenas that amount to 40% of their total revenue. Esports lost out on money made from LAN events, but those events were a drop in the bucket for the industry as it showed stability and continued to grow.
How Big is the Esports Industry?
NewZoo’s Global Esports & Live Streaming Report for 2022 predicts that by the end of 2022, global esports revenue will reach nearly $2 billion in revenue. The report also predicts that most of the revenue – 69% will come from media rights and sponsorship, which becomes over 75% of their total market. This percentage is partial because of the lack of LAN events and revenue associated with that, but also because media rights and sponsorships were already such large parts of the esports revenue model. It is an international industry that exists through literal screen time, so sponsorships and brand deals are where the money gets made.
Thamba Tharmalingam, COO of Enthusiast Gaming, in a Forbes interview said, “Gaming is the single fastest-growing entertainment sector. These 2.5 billion gamers are not an isolated/niche segment. This is the mainstream.” 2021 proved Tharmalingam’s point. While the 2.5 billion gamers do not all watch esports, NewZoo’s reports forecast that live streaming viewership totals will hit 728 million—a 10% increase from 2020. Much of this growth can be attributed to the pandemic, in which many people were exposed to esports for the first time. With the pandemic nearing an end, this growth should stabilize, but NewZoo’s report predicts that the live streaming audience will clear 830.3 million by 2024. The bulk of this audience, according to a May 2020 EveryMatrix report is between the ages of 18-35.
Estimating esports betting market size
The esports gambling market is a small subsection of this larger esports industry. Most of the esport viewers that will gamble are between the ages of 26-35 and are high-income, full-time professionals, so the target audience is narrow but deep. There aren’t many reports out for 2021, but there has been a lot of action that indicates it’s growing at a similar rate to the entire esports industry.
If we look at the biggest acquisitions and sponsorships during 2022, it’s hard to estimate the global esports betting market at more than a few hundred million dollars. However, things changed with US betting regulation in 2022 and mobile esports expansion, which is still ongoing, so this industry is expecting to have a great hit to $1.6b by 2024.
Better Collective, one of the largest sports betting media groups, acquired HLTV.org for $40 million. This will bring betting promotions and media to one of the most popular websites for CS:GO and surely enlarge the esports betting market. Intema Solutions just purchased Livestream Gaming Ltd—the owners of loot.bet—for $14 million to invest in their esports betting ecosystem. Luckbox CEO Quentin Martin told Esports Insider that, “Lockdown really accelerated esports betting years into the future. It’s been a period of hyper-growth for sure.” They have been listed publicly for about six months through their parent organization Real Luck Group, and after going public in December of 2020, they have a market cap above $30 million. Even Astralis has gotten in on the action partnering up with Unibet as their title sponsor and “Official Betting Partner.” Orgs in the esports world are making esports betting a part of their future.
Combine this with the quick introduction of sports gambling in states across the USA, and the esports betting market will have plenty of uncharted territory in the US market. Not only was sports gambling as a whole just legalized in 2018, but states are searching for new ways to make money after an expensive pandemic, and one of the most appealing has been sports gambling. FansUnite Entertainment announced in December of 2020 that it would partner with GameCo LLC and Sky Ute Casino to develop the first esports focused sportsbook in Colorado. There is money to be made in the esports betting industry and investors have noticed.
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