Esports Entertainment Group losses widen in Q3 as Lucky Dino boosts revenue
Revenue rises 129% quarter-on-quarter to $5.4m as Q3 operating losses reach $5.6m
Esports Entertainment Group has announced revenue of $5.4m during its fiscal 2021 Q3 financial results.
Revenue climbed 129% on the previous quarter, where net revenue was significantly smaller at $2.4m.
The same trend was found for gross profits, which reached $3.1m for Q3, up from zero in the previous quarter.
The upticks were driven by the acquisition of online casino operator Lucky Dino.
Due to the purchase, the number of Unique Active Players throughout March jumped upwards by 40,000 across the operator’s igaming brands, where average revenue per player surpassed $80.
Further boosts to Esports Entertainment Group’s income arrived from the launch of SportNation and Vie.bet brands into new markets after they obtained a Malta Gaming Authority (MGA) licence.
The purchase of Esports Gaming League was also completed, adding a provider of live and online events and tournaments.
Despite the revenue upgrades, an operating loss of $5.6m was revealed by the group’s statement, and this was down only by $0.2m from the previous quarter.
Operating expense rises were attributed to payroll, stock compensation, marketing, legal and professional services fees related to increased business activity.
Overall, a net loss of $12.4m was also revealed.
Adjusted EBITDA for the three months to 31 March this year was -$2.1m, in contrast to -$0.6m for the same period a year ago.
“We continue to execute on our organic growth strategy as well as acquire additional strategic esports and egaming assets,” said the firm’s management in a statement.
“The imminent close of the previously announced GG circuit/Helix acquisition, combined with the recently announced intention to acquire Holodeck Media, will enable us to exponentially expand our technology-driven esports wagering, tournament play and egaming focused entertainment company.”
While the group is banking on the future popularity and success of regulated esports betting, Regulus Partners analyst Paul Leyland suggested the business was operating in the esports arena in name only at present.
He said: “Esports Entertainment marks itself as a ‘leader in esports betting and entertainment’ yet, to date, derives no revenue from esports operations.
“Despite the company announcing various partnerships in the esports/sports space, an extremely broad “spray and pray” M&A approach has yet to reap rewards.
“With cash not as plentiful, and the esports wagering space still yet to be anywhere near as substantial as some may want to believe, 2021 is a pivotal year for Esports Entertainment to begin to show shareholders that a return could be forthcoming.”