NASDAQ-listed gambling and esports company Esports Entertainment Group has announced its Q2 financial results, ending December 31st, 2021, for its ongoing fiscal year.
Despite the company managing to secure a gross profit of $8m (~£5.9m), which is up $7.2m (~£5.3m) from the previous year, the results include a GAAP loss of $34.5m (£25.38m) to common shareholders. This is significantly higher than its net loss of $7.3m in Q2 2021.
RELATED: Esports Entertainment Group granted New Jersey betting license
The results also show a net revenue of $14.5m (~£10.7m) by Esports Entertainment Group. This is an increase of $12.2m compared to Q2 2021. Nevertheless, this is still an 11.4 per cent decrease compared to Q1 2022’s net revenue of $16.4m.
Esports Entertainment Group is an esports betting and investment company that has partnerships with both traditional sports and esports. Some of the companies EEG owns include Helix eSports, betting company Vie.GG, esports and gaming platform EGL and others.
EEG is a partner of the NBA 2K League, as well as the Denver Broncos, LA Chargers, and Indianapolis Colts of the NFL. The company also recently secured a New Jersey betting license.
Grant Johnson, CEO of Esports Entertainment Group, commented: “Our fiscal second-quarter results reflect a variety of challenges largely outside of our control, which together drove our first quarter-over-quarter revenue decline in more than a year. Despite these challenges and the collective impact they are having on our business, we remain extremely bullish about the year ahead and in our ability to reach annualized revenue of $100m (~£73.7m) from our current portfolio of offerings.”
In the financial report, the company’s CEO attributed these results to three main reasons. Firstly, the change in the Netherlands’ regulation for iGaming saw EEG shut down the operations in the country. Moreover, Johnson noted the company’s online sportsbook business in Europe experienced a ‘historically low hold’ that, in turn, resulted in a material decline in revenue.
Finally, Johnson said that the rise of the Omicron variant and the pandemic also affected business.
Prior to the financial results, Esports Entertainment Groups has been fairly active within the esports and betting landscape in 2022. The company recently appointed Stuart Tilly as COO, a veteran in the gambling industry.
[primis_video widget=”5182″]
RELATED: Esports Entertainment Group appoints Stuart Tilly as COO
Esports Entertainment Group added in a release: “The Company expects year over year net revenue growth to be in a range of 317 per cent to 347 per cent, resulting in net revenue of $70 to $75 million (£51.5m to £55m) in fiscal 2022. The updated guidance range contemplates growth driven primarily by the platform-building and strategic diversification acquisitions completed in calendar 2021.”
Esports Insider says: EEG is one of the premier players in the esports betting space, and the shaky last quarter should not significantly affect the business in the long run. The recently-acquired New Jersey license will surely help the company in the USA, and the VIE.gg platform’s growth should fuel further expanse of operations. Nevertheless, there are only so many losses that a company can take before questions start to be asked.