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Why the World’s Top Athletes Are Investing in Esports

Thirty Five Ventures has formed a new partnership with gaming and esports company Andbox.

On Monday morning, Kevin Durant and Thirty Five Ventures announced a strategic investment in and partnership with Andbox, a growing esports organization in New York and the first to bring professional esports leagues to the tri-state area.

This investment, which grew naturally from KD’s love of gaming, is the latest in a recent series of moves by professional athletes to bridge the gap between traditional sports and gaming — and to double down on a growing market.

In December 2020, Ultimate Gaming League announced the formation of four new franchises, spearheaded by former NFL players: Chad Johnson, owner of Ochocinco Gaming; Marshawn Lynch and Josh Johnson leading Da Fam Gaming; Maxx Crosby and Josh Jacobs captaining 4 Brothers Gaming; and Sidney Jones IV, owner of Gitxh Gaming. 

WNBA stars have gotten in on the game in the early days of 2021 as well: Avid gamer and WNBA champion Aerial Powers of the Minnesota Lynx joined Team Liquid as a brand and diversity ambassador in January. Last week, Dallas Wings star Allisha Gray became a member of Gridiron Gaming Group, an organization designed to help pro athletes in the gaming space. These athletes join the likes of David Beckham, Tony Parker, Antoine Greizmann, and more in the esports landscape.

Teams Are Forming Gaming Partnerships

When the NBA and Take-Two Interactive teamed up to launch the 2K League in 2017, the concept was considered revolutionary. NBA teams were paired with esports offshoots, expanding from an initial 17 teams to 22 NBA teams and one Chinese import, the Gen G. Tigers out of Shanghai.

This groundbreaking league paved the way for other leagues and teams to make formal partnerships within the esports ecosystem. The MLB and MLBPA teamed up with Sony to launch the MLB The Show Players League, with one player from each of the 30 MLB teams participating in a tournament representing their real-life team. Then-Rays, now-Padres ace Blake Snell took home the inaugural championship, raising $30,000 for the Boys & Girls Clubs of the Suncoast in the process.

This was not the MLBPA’s first foray into this world either, as they pitted players against one another in a massive Fortnite tournament in 2018.

When compared to their NBA and MLB counterparts, the NFL is slowly toeing the esports waters, but it appears the floodgates could be opening soon. In December, the Eagles became the first-ever NFL franchise to sign an esports tournament provider in a landmark deal with Esports Entertainment Group. This month, the EEG found its second NFL client in the New England Patriots, who signed a similar deal with the group to use team branding, player appearances, and more to stage and promote esports tournaments. It’s just the beginning, but could lead to even more close partnerships going forward, especially with the annual Madden Club Championship continuing to be such a massive event annually for league partner EA Sports, even being broadcast on ESPN.

The Future of Esports

Investments into the esports economy totaled over $8.07B in 2020. As viewership grows for esports competitions, a new question arises: how can bettors wager on these competitions?

In the US last March, the Nevada Gaming Control Board approved wagers on six esports titles as sportsbooks looked to fill the void left by sports cancellations globally. As a result, esports gambling revenue grew to an estimated $14 billion in 2020. Recently, new online sportsbooks have been trying to gain a share of the growing market.

Esports Technologies, an esports betting platform, filed with the SEC for a $10 million IPO earlier this month. The company was formed in 2016 and already takes real money bets in Asia and Latin America for competitions for esports titles like Counter-Strike: Global Offensive and Rocket League. The company faces strong competition from existing online sportsbooks that allow bettors to play fantasy esports like DraftKings and Unikrn, founded in 2014 and backed by VC investors including Mark Cuban and Ashton Kutcher.

Unikrn allows registered users from international markets to place real money bets on esports, has an integrated blockchain payments system, allows US users to watch and compete against other gamers, and enter to win prizes.

Perhaps the most puzzling part about this sector is legalization. While at least 20 states in the US have legalized sports betting, gaming and esports weren’t specifically considered in those processes. Additionally, the digital nature of online gaming raises all kinds of integrity issues and the risk of fixed games.

More questions than answers are available at this time. Are esports considered sports? Can organizations like the Esports Integrity Commission keep up with the massive scale? Stay tuned.