CRDA’s Investment Into Esports In Atlantic City Might Be A $700K Gamble

Posted on December 27, 2018 - Last Updated on February 19, 2020

The Casino Reinvestment Development Authority (CRDA) has pledged to invest $700,000 into advertising for esports tournaments. The group hopes that the investment will build loyalty for future generations of visitors.

Esports is the umbrella term for competitive video gaming. Teams from across the world come together to compete against each other in almost every type of video game.

During the next 18 months, the CRDA will help InGame Esports Inc. promote a series of events in Atlantic City. InGame plans to host numerous competitions at Jim Whelan Boardwalk Hall and the Atlantic City Convention Center.

Adults may snicker, but large swaths of people are legitimate spectators of these events. Last year, more than 300 million people watched at least one of these competitions through streaming services or other electronic means.

Esports investment may be gamble

Naturally, there is some money following these millions of viewers.

In fact, according to a study by research firm Newzoo in 2017, the industry likely grew to $906 million this year (although actual returns are not available yet).

Assuming Newzoo’s prediction is correct, that means that esports as an industry is nearly three times the size of daily fantasy sports. Of that $906 million, $345 million of it occurred in North America.

Sounds good, right? Unfortunately, a closer look at the numbers makes the CRDA’s move potentially much riskier.

For one thing, only 11 percent of that projection relates to merchandise and tickets to events. So, InGame Esports’ revenue potential immediately reduces to a ninth of its previous size.

The esports target market is also one of the poorest demographics in America. The 18-34 bracket struggles to make ends meet more than any of their predecessors.

They are also stingier with their luxury spending, underlining the difficulty of drawing large swaths of fans to Atlantic City casinos to spectate.

So, drawing a physical crowd to these events may be a taller order than it seems.

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Esports events are happening in AC, anyway

However, regardless of the difficulty, Atlantic City has several esports events slated for the next six months or so. In fact, Ocean Resort Casino is hosting one this very weekend.

The N3rd Street Gamers are hosting the $30k Cougar Open NSG Championship Grand Finals from Dec. 21 until Dec. 23. 32 teams of gamers will descend upon America’s Playground to battle for the $30,000 prize pool.

That’s not a typo. The first place team in the contest will earn $21,000 for itself — a good payday for three days of playing video games.

Ingame Esports is also planning to hold an event in April or May, an event during the summer, and a meet for the 221 schools in the East Coast Athletic Conference, which began sponsoring esports in 2017. InGame will present its plans to the board in January.

So, while there are some questions about the CRDA’s investment, there’s no doubt that there will be events to promote. Perhaps the CRDA is simply bowing to the inevitability of esports’ coming wave.

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Bart Shirley

Bart Shirley is a writer and poker player from Houston, Texas. When he's not teaching high school math and business, Bart writes about the NJ online casino industry and US online poker. He has a master's degree in business administration from Texas Christian University and a degree in English from Texas A&M.

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