Esports betting and sportsbook operator Rivalry has recently laid off around 10 employees, sources told The Esports Advocate, as the publicly traded company (TSXV: RVLY, OTCQX: RVLCF, FSE: 9VK) enters a phase of strategic realignment. Coupled with the company’s decision to secure a new line of credit and launch a formal strategic review, these moves appear to reflect deeper challenges in Rivalry’s operating environment and financial performance.
Financial Pressures Signal Need for Restructuring
Rivalry’s most recent financial results revealed several key factors that may have contributed to the decision to streamline operations and reevaluate strategic priorities:
- Reduced Gross Gaming Revenue (GGR) & Handle: For the three-month period ended September 30, 2024, Rivalry’s gross gaming revenue (GGR) declined to $5.66 million CAD ($3.99 million USD)—from $8.74 million ($6.15 million) in the same period in 2023—while total Handle (the total amount wagered) dropped to $79.96 million ($56.31 million) from $105.73 million ($74.45 million). This downward trend is largely driven by lower sportsbook performance, which saw its GGR dip by $3.14 million ($2.21 million) over the same three-month comparison.
- Lower Net Revenue: Rivalry’s net revenue—defined as wagers minus payouts, cancellations, corrections, and promotional costs—also declined for the three-month period, dropping by over $1 million to $2.95 million ($2.08 million) compared to the prior year’s same quarter. Over the nine-month period, net revenue was down by over $1.1 million to approximately $12.11 million ($8.53 million), reflecting the impact of reduced marketing and an organizational overhaul in Q3.
- Operating Expense Adjustments: While total operating expenses also declined for the three-month period—from $9.23 million ($6.50 million) to $8.47 million ($5.97 million)—the drop primarily came from cost reductions in general administration (down $0.50 million) and marketing (down $0.94 million). Rivalry’s strategic pivot to preserve resources in brand and campaign development may have simultaneously impacted revenue-generating opportunities in the short run.
- Shifts in Market Focus & Seasonal Esports Dynamics: The esports calendar’s inherent seasonality, combined with Rivalry’s lowered marketing expenditures, led to subdued sportsbook GGR. However, Rivalry did see modest gains in its gaming (casino) segment, suggesting user adoption in non-sports offerings.
Strategic Review and New Financing
Against this backdrop, Rivalry’s Board of Directors initiated a formal “review of strategic alternatives to maximize long-term stakeholder value,” enlisting boutique investment bank XST Capital Group to evaluate various options. The company also secured a $650,000 USD senior unsecured loan from an existing lender, maturing Sept. 30, 2025, at a 10% interest rate—providing additional liquidity amid its ongoing reorganization.
Positioning for Growth Amid Challenges
According to Rivalry Co-Founder and CEO Steven Salz, this strategic review is a “natural step” for the company as it seeks to maintain its trajectory in esports and online gaming while creating a sustainable path toward profitability. Management notes that Rivalry’s overarching strategic pillars include:
- Market-Leading Product Innovation: Continuing to invest in unique offerings, such as originally developed casino games (e.g., Cash and Dash) and proprietary technologies that resonate with Gen Z bettors and a digitally native demographic.
- Regulatory Expansion: Leveraging its existing Isle of Man and Ontario licenses to enter new regulated markets, with plans to secure additional licenses and broaden its global footprint.
- Global Brand Resonance: Developing impactful marketing properties, branded content, and on-site products, including its native crypto token NUTZ, to differentiate Rivalry in a competitive digital betting landscape.
A Path Forward
Despite recent setbacks, Rivalry remains committed to aligning expenses with near-term profitability goals and to fortifying its operational base for sustained growth. Management emphasizes that focusing on technology-driven innovation, expanding into new jurisdictions, and building a strong brand identity will help sharpen the company’s competitive edge.
The decisions to reduce headcount, consolidate marketing activities, and take on new financing are part of Rivalry’s broader plan to stabilize cash flow and shift resources toward areas with the highest potential return.