Some may find it hard to believe that video games are a major spectator sport with professional players, but this new development takes it to a whole new level: Starting today, you will be able to place real-money bets on the games, too.
After operating under the radar for the past five months, Seattle-based Unikrn (pronounced Unicorn) is finally ready to reveal what it has been working on.
Today, the company is announcing a brand new online gaming arena, where spectators will be able to watch and chat about major tournaments — and place bets for a chance to hit the jackpot. The major caveat in today’s launch is that betting is restricted to jurisdictions where online gambling is legal, and very broadly speaking, that’s almost everywhere but the U.S.
In an interview yesterday with GeekWire, the company’s co-founder and former general manager of Microsoft Ventures Rahul Sood outlined the massive opportunity he sees in front of the company.
“eSports is one of the largest sports globally, attracting viewer numbers that are on par with traditional sports such as American football and basketball,” he said. “We see this huge opportunity for people who spectate or watch to bet on games.”
While the company is officially launching today, it has gotten a head start by acquiring two companies over its short history.
First, in December, it acquired PlayAll, a Berlin-based online betting platform that Sood helped start back in 2007. Second, in February, it confirmed the acquisition of Australia-based Pinion. Pinion operates an ad-supported eSports community, which will become the basis for Unikrn’s launch. It already reaches an audience of 10 million viewers across 100 countries, and generates $1 million in advertising revenue annually.
Sood first became acquainted with Pinion in 2012 when Microsoft’s Bing Fund invested in the company.
To date, Unikrn has raised $3 million in seed funding from a high-profile list of angel investors, which Sood says includes people from around the world and one undisclosed A-list celebrity. Unikrn is in the middle of raising another round of funding, which could close as soon as this summer, he added.
So far, despite these two acquisitions, the company has continued to stay scrappy. At its South Lake Union headquarters in Seattle, it has only 12 employees, and worldwide it has another six located in Berlin and Australia.
“I came from a startup world, and then went to Microsoft and I saw what it was like to have a gigantic organization. I want to create a company that’s really lean. I don’t believe in raising a lot of money and hiring a bunch of people. It’s a bad idea to hire a bunch of people and then hope for the best,” he said.
In addition to the two acquisitions, Unikrn is also announcing a key partnership today with Tabcorp, a publicly held company in Australia that is one of the largest wagering companies in the world.
Tapcorp’s partnership is crucial because it is giving Unikrn all the essential licensing information required to operate legally, which would have taken years to achieve on its own. Additionally, Unikrn will be the exclusive provider of eSports information on Tapcorp’s website Luxbet.com. Tapcorp is also Unikrn’s largest and only disclosed investor.
Today, 60 percent of Unikrn’s traffic on Pinion comes from international markets, where viewers will be able to gamble, but Sood says just because betting isn’t legal in the U.S., it won’t mean people here won’t be interested.
“It’s important that we have international traffic, but it doesn’t mean people in the U.S. won’t be using our system. You can register, you can win prizes, and you’ll be able to watch and see the odds and chat,” he said. “You just won’t be able to bet.”
Today’s launch will only mark the beginning.
For now, all bets are placed against the house, which is Unikrn, and participants will only be able to bet on the outcome of the match — not on any events along the way. And, the only game that people will be able to bet on is the popular multiplayer game League of Legends. Although that’s no small market — in total, the League of Legends World Championship saw 288 million cumulative daily unique impressions across all stages last year.
Sood said that he is hoping to appeal to the very large eSports community, but also to people who enjoy betting on games for fun. Very few companies have started to initiate betting in eSports, but he said eSports is the 7th largest sector in volume after golf and rugby, according to Pinnacle, a UK-based wagering company that has gotten into the busines.
As a media and entertainment company, he said a share of the company’s revenues will come from sponsorships and advertising, but the vast majority will come from the house winning the odds. “Ads and sponsorships are a business in itself, but I think betting will explode,” he said. On day one, however, he’s more concerned about the little things. Sood: “I just hope things don’t beak and we aren’t up all night fixing it.”