Esports Entertainment Group posts $34.5M loss in latest quarter
Gambling company and tournament platform provider Esports Entertainment Group has revealed its financial performance for the second quarter of its current fiscal year, ending December 31, 2021.
The basics: EEG has seen a growth in revenue but also recorded hefty losses for shareholders. It's a public company, trading as GMBL on the Nasdaq.
- EEG posted net revenue of $14.5M, up from $12.2M in the same quarter of the previous year but down from $16.4M in the first quarter of its current fiscal year.
- It posted a gross profit of $8M, up from $7.2M in the same quarter of the previous year, but recorded a net loss of $34.3M (a loss of $1.53 per share for common shareholders).
- The loss adjusted for earnings before interest, taxes, depreciation, and amortization (EBITDA) totalled $6.8M, up from $3.8M in the second quarter of the previous fiscal year and $4.3M in the current year's previous quarter.
Recent developments: The gambling company kept busy in recent times, making developments in gambling and acquiring new businesses.
- EEG received a transactional waiver in January 2022 that allows the company to legally accept bets in New Jersey through its VIE.gg platform.
- The public company has partnered with a host of sports franchises to help them host competitive gaming tournaments, including brands like Denver Broncos, Indianapolis Colts, Los Angeles Chargers, and New England Patriots.
- Back in 2020, Esports Entertainment Group went on an acquisition spree to bring betting and casino operator Argyll Entertainment, tournament organizer EGL, venue specialist Helix eSports, and software provider ggCircuit under its umbrella.
The reasoning: EEG CEO Grant Johnson spoke on the difficulties the business faced during the quarter.
- Johnson stated that a "significant change in the Netherlands regulatory environment" led the company to exit the country's betting market.
- "Our online sportsbook business in Europe experienced historically low hold which, while in-line with the broader European and U.S. market, resulted in a material decline in sportsbook revenue," he continued.
- The CEO also noted that the "ongoing issues with the global pandemic" had a significant impact on the company, including the delay of "our LANDuel launch and the opening of our Helix esports center in California."