This past year has seen esports’ popularity in the casino gaming world explode and we have witnessed many casino and gaming companies embracing esports on a number of levels.
Below you will find my top 10 list of noteworthy casino and esports industry initiatives in the past year, why I think they are important from a commercial business perspective and my take on each of them:
1) MGM and ESP Gaming: In April 2018, at the Aria Hotel in Las Vegas, ESP Gaming and its sister production company, Poker Central announced a soon to be opened studio facility located inside Aria. The 10,000-square-foot facility will accommodate 300 people, will be located inside the casino hotel and will be designed to host both esports and poker events. While commercial terms were not disclosed, it seems as if this is a landlord-tenant type of arrangement between MGM and ESP. My personal opinion is that the studio will be busy with both poker productions and esports events since ESP Gaming has quickly established itself as a leading Las Vegas based esports production company and Poker Central is already the leading poker production company in town.
2) Caesars Studios: In July 2017, Caesars was an early entrant in the esports space when the company announced the opening of a 48,000-square-foot production studio behind Bally’s on Koval lave. The studio while not exclusively built for esports was designed with esports in mind. Caesars is the only property with a studio of this caliber on the strip. So far it seems to be a good decision as numerous TV and esports events have been filmed there.
3) MGM and Allied Esports Arena. In March 2018, MGM welcomed Allied Esports Arena into the former LAX space at Luxor. While it is unclear as to the commercial arrangement between the parties, it appears that MGM is in a landlord-tenant relationship with Allied. Noting the LAX space is a prime piece of casino real estate, one can assume the rent there is pricey. Add to that the costs in building the beautiful space, and Allied has reason to succeed. My take is that this type of arrangement can be lucrative for a casino property like Luxor. Hopefully it will all work out but we will wait and see.
4) MGM and Leven Up. While not strictly Esports, MGM partnered with Hakkasan and others in November 2017 to develop a “millennial gaming playground” in the former space that once housed tigers at the MGM Grand. This facility includes stadium gaming, skill- based games, and Golfstream, to name just a few of the amenities. Unikrn also announced that they would be operating esports tournaments out of the space. Unfortunately, execution and other issues seem to plague the space. The jury is out on this particular set up and we will wait to see what eventually happens with the space. The potential is definitely there.
5) Downtown Grand Casino. Beginning in 2016, the Downtown Grand was the first Las Vegas casino property to truly embrace esports. Working closely with its neighbor Millennial Esports Corp. and others, the Downtown Grand built an esports lounge, hosted various esports events and activities on property, held the first major after party event hosted by a professional esports team, and with William Hill, took the first ever sports wager placed in Nevada on an esports tournament. Great work Downtown Grand!
6) Melco and Grow uP eSports: This was one of the first esports tournaments hosted at a Macau casino property in September 2017 at Studio City in Macau focusing on “girl gamers.” Although the event was an invitational open only to women, this event opened the door for future events in Macau as esports came to be seen as a spectator sport. Because of the success of this event, Macau operators saw the potential to draw bodies to the property as a legitimate business opportunity.
7) Melco and Garena– In August 2018 Melco announced a 274-seat esports arena built at Studio City—the first of its kind in Macau. After successfully partnering with outside tournament organizers, such as Grow uP eSports on previous esports tournaments, Melco obviously saw a business opportunity and seized upon it. I commend Melco on taking this bold initiative. If executed properly, the Macau eStadium could prove to be a lucrative venue and draw for Melco and the mid-market it aims to attract.
8a) Caesars and Gears of War (MSFT and UMG): Beginning in 2017, Caesars was already hosting esports tournaments in their properties in Atlantic City and Las Vegas. In 2017 Bally’s AC hosted a Gears of War tournament and in April 2018, the Gears of War Pro circuit Las Vegas was held at the Caesars studio behind Bally’s LV. Both these events were likely studio rentals and as a casino business unit it seems as if the studio can succeed as a special purpose venue. Of course, the added draw is in attracting the numerous spectators and participants to the property. My only comment here is due to the location of the current studio behind Bally’s, getting people inside the property seems to be an issue.
8b) Caesars and H1Z1 (Daybreak Games and Twin Galaxies): In April 2018, Caesars scored a coup with the first “major” esports league to operate exclusively in Las Vegas and on a Caesars property. Again, while commercial details are unavailable, it is safe to assume that Caesars rented the studio space and services to the league and tournament operator and revenue was generated as a result of this. The event was also unique because it was the first time an esports league (H1Z1) made up of 15 teams had made Las Vegas home. To what extent this event will contribute to the local economy is yet to be seen, but in the future look to the ancillary economic benefits and trickle down effect of having professional esports leagues operating out of Las Vegas.
9) Caesars and the Wall Gaming lounge: In June 2018, the Rio opened a 30-station PC gaming lounge in the Masquerade Village area of the casino. Partnering with PC manufacturer Alienware, the space is big enough to hold small tournaments but will operate as a LAN center. Initially a relatively small space, the lounge has plans to expand to 25,000-square feet of prime real estate on the casino floor. Food, drinks and other amenities are offered in the lounge to gamers and non-gamers. Caesars is the second major casino property to build a lounge catering to the gamer demographic. If the right marketing and activations are conducted, this space has a chance to be a profit center for the property. Hopefully Caesars got it right with this space. I suppose we will be able to judge the commercial success of the space if it expands to the space in the near future.
10) MGM and Foundry IV. Ultimately one of the stealthiest and in my opinion noteworthy deals of the past year was the seed investment by MGM in a company called Foundry IV. All we know so far of this Foundry IV is that it was founded by Tobias Sherman and a group of colleagues , all formerly with WME-IMG. In November 2017, Foundry IV announced that they were developing a new game purpose-built for esports You can rest assured that this game will have gambling elements embedded in the game play and that this will be the beginning of a new era of esports titles and video games purpose built with gambling in mind. Kudos to MGM for this out of the box thinking and investment.
