Rivalry CEO doubles down on increased spending to secure future profitability

Rivalry CEO Steven Salz has reiterated his commitment to sustained investment to drive future profitability despite posting a net loss of C$12.8m (£8.4m) for H1 2022. Responding to a LinkedIn post arguing the difficulties of navigating the journey to profitability for esports betting firms, Salz dismissed fears of short-term losses with a focus on long-term gain. Despite the C$12.8m loss for the first six months of the year, the operator posted H1 revenue of C$10.2m and gross profit of C$2.7m. The firm also expanded into both its home market of Ontario and Australia, with Rivalry ramping up spend as part of its growth roadmap. For H1 2022, Rivalry recorded operating expenses of C$15.5m, up from the C$6.1m spent in H1 2021. Salz drew comparisons between the relatively young firm and industry heavyweights when noting the commonness of losses. He said: “Building for market leadership requires investment, and investment means risk of near-term loss on the path to future cashflow. This is just business building. “You could look at any growth sector over the course of history and you would be hard pressed to find a P&L that was profitable in the early years. Even in our sector you have operators like DraftKings that are over a decade in and burning $1bn a year still,” he added. Salz went on to argue that as markets continue to mature and spend levels out, a route to profit will become clearer. He continued: “Specific to Rivalry, we are early in our life. Therefore, we have more new markets than mature. The mature ones are profitable on a standalone P&L basis. “New ones require investment to grow, so they are not [profitable]. In time, the weight of mature markets will be greater than the new, and then Rivalry will be profitable,” Salz concluded.