Esports and online betting company Esports Entertainment Group CEO Alex Igelman has provided a letter to shareholders outlining the company’s ongoing restructuring plan aimed at driving accelerated growth and increased operational efficiency.
The company has been struggling since May 2022, when it admitted “doubt” regarding whether it could stay in business for another year. In November, its brands SportNation and RedZone ceased trading in the UK, while former CEO Grant Johnson exited the following month.
Igelman, who joined the company approximately three months ago, undertook a top-to-bottom review of the entire organization based on where he believes the esports and esports gambling industries are heading and then tied this into a cohesive vision for the company.
He explained that Esports Entertainment would now focus on expanding its B2C offerings, specifically through its Idefix platform. The company acquired Idefix as part of its $30 million acquisition of Lucky Dino in March 2021.
“As a business-to-consumer (B2C) igaming operator in international markets, operating under our MGA license, we plan to have a renewed focus on esports wagering through new betting content and offerings,” he said.
“Concurrently, the company is implementing strategies to expand its B2C esports wagering services through its Idefix platform, and we are in the final stages of integrating the Oddin.gg iframe solution on our platform for esports wagering. Eventually, we plan to offer an esports-first, Idefix-based B2B platform for sale and distribution to third parties,” the letter read.
Alex Igelman
Igelman noted Esports Entertainment’s multiple divestment efforts, many of which have taken place this year. Igelman said that these sales took place to “streamline” its operations.
The company recently completed the sale of its esports Spanish gaming license for approximately $1.2 million in January of this year. On the heels of this transaction, the company completed the sale of the Bethard business in February for approximately $1.7 million in cash at closing and further eliminated debt and liabilities to the Bethard business of approximately $7.5 million. In March, the company initiated the liquidation of Argyll Entertainment, an online gambling business in the UK, with recurring losses.
The firm also reduced its employee headcount by more than 37% this year. The company reduced its headcount from 158 full-time employees on December 31, 2022, to 99 full-time employees, inclusive of planned reductions. Although the company incurred upfront costs related to the restructuring, over time, these initiatives are expected to lower their operating expenses by over $4 million on an annualized basis.
Despite a rocky start to 2023, Igelman praised the company’s “achievements” as “noteworthy” in his time as CEO. “Esports Entertainment has extremely valuable and differentiated assets, which we believe will be key to the future of this industry,” the CEO said. “I strongly believe that our achievements over a short three-month span are truly noteworthy.”
“With the right leadership, direction, and financial discipline, I am extremely confident we can establish Esports Entertainment as a leader in this rapidly emerging market while unlocking value for shareholders,” he concluded.
