Last Friday night I won $250 watching two kids beat the hell out of each other in vintage Street Fighter II. I personally give odds to whoever uses the karate duo, Ryu or Ken, proficiently over any of the other fighters. Mostly because of the diversity of their defensive capabilities and the ability to throw fireball after fireball at their opponent, especially in SF2 when one hit means a knockdown and there are no aerial blocks. As far as gambling goes, it’s a sure bet.
It was a friendly bet between buds over beers and after refusing to go double-or-nothing, the money landed in my account and I realized in my weirdly tangential way that this right here is how e-sports bettors feel.
Full disclosure: I don’t like watching people play video games.
My wife likes watching me play Cyberpunk 2077 and periodically she’ll suffer through one of my many sports games, but when the tables are turned I’d rather drink bleach. I also feel the same way about baseball and soccer, but betting on them? Oh, that’s a different story. Give me the stat sheets, let me set my limits, and we’ll see what we can do.
I began to understand the appeal.
My little Friday night SF2 victory also helped me understand the appeal of the esports and gambling sector broadly. It wasn’t about watching other people play for the sake of it. It was all about sizing up your horse and jockey for the race.
On a more micro level, it also helped me understand the appeal of companies like Tiidal Gaming Group (TIDL.C).
What is Tiidal Gaming?
Tiidal Gaming is a media and tech platform in the e-sports and gaming sector. They bring together three convergent sectors in gaming, media and betting, and give their partners the opportunity to craft their own engaging fan and consumer experiences through their media and tech.
They operate with two subsidiaries
Lazarus Esports was founded in 2010 and has grown to become Canada’s first established esports team. They’re a professional esports organization working on developing the global gaming market and supporting pro-gamers at the highest levels. They boast over 50 digital athletes in 10 countries.
Sportsflare: Sportsbook Gambling
Sportsflare is the company’s betting platform. In addition to the usual spate of gambling options, including esports, normal sports, they have an option to bet on yourself as you play your favourite game. The technology involves powers sportsbooks offering immersive and on-demand experiences for the gambling crowd.
The Bet On Yourself option is the eye-catching part of the platform.
The company offers cross-platform, high-margin betting where betters can place bets on their own performance across select objectives. Challenge yourself to get better and get your gambling on while you’re at it. Sounds devious. I’m in.
The Developments
The latest developments include a deal made by Sportsflare regarding getting into player proposition markets for DOTA 2 (that’s Defense of the Ancients for all of you non-gamer types) on its platform. It’ll make Sportsflare the first odds provider to offer player proposition markets for DOTA 2, which is one of the biggest esports titles out there.
Here’s what Equity Guru’s own Kieran Robertson had to say:
“Just how big are we talking here? According to Steam Charts, there were 632,007 active players as of 10:00 AM EST. At its all-time peak in March 2016, DOTA 2 saw 1,291,328 active players. With this in mind, DOTA 2 is an immensely popular Multiplayer Online Battle Arena (MOBA) video game, ranking third just behind games like League of Legends and Valorant.”
The second latest development is the partnership with Skirmish (Skrmiish), which is an app-driven community gaming platform operating out of the Isle of Man in the United Kingdom.
They’ve been around since January 2021, and they’re the first gaming app to bring together gamers, streamers, teams and brands in a collaborative environment, where each can make money off of each other’s experiences. The app is built primarily for tournament competitors, where folks can bet on player versus player and player versus environment games.
Here’s an overview what features the app carries:
- Featured games currently include Fortnite and Call of Duty: Warzone;
- Available on Android and iOS; 80,000-plus downloads to date;
- Accepts fiat and cryptocurrency payments for wagers.
Finally, the bottom line.
The Numbers
If all you do is look at the stat-sheet and the raw numbers without diving into the context a bit, the numbers don’t look great. Tiidal has a poor cash position and their assets to liabilities almost overlap showing only a small amount of shareholder equity. It also shows two different types of debt: convertible debentures and government loans.
But if you cycle down to where they explain the specifics, you’ll discover that the stat-sheet itself shows life back in October, which doesn’t represent life in mid-March at all. The debentures, originally for 7% interest, were taken out back before Tiidal’s reverse takeover, and contingent on conversion into shares of the company post-RTO (or May 31, whichever came first). Well. The company performed their reverse takeover months ago, which meant conversion happened months ago and the price-action dip we’ve seen reflected in the chart was probably folks cashing out.
As for the poor cash position: the stat-line tells a story of a company in search of a revenue engine. Well. They have one now in Sportsflare and the subsequent partnerships it’s picked up in terms of gaming platform Skrmiish, Maltese business to business sportsbook operation Boa Gaming, and EveryMatrix technology platform.
Their next financial-drop won’t look the same.
The government debt here doesn’t look as bad as the convertibles did. The company took out a Canada Emergency Business Account (CEBA) loan with the Government of Canada, which offers up to $40,000 in interest free loans to businesses until the end of this year. If the debt is paid before the due-date at the end of this year, they’ll waive 25% of the debt. If the balance isn’t paid before the date, the remaining balance will be converted into a three-year term loan at 5% annual interest to be paid monthly. The full balance must be in, though, no later than December 31, 2025.
So naturally the company took two loans.
The second was on October 31, 2021, and they received an extra $20,000, and if they manage to pay it off by the end of this year, then half of it will be forgiven. If the balance isn’t, then the same issues apply as with the first.
That’s not too bad. Companies have to raise funds somehow and if you’d rather not get dilutive with your paper at this stage in your development then a government loan is probably the best way to move forward.
Gambling on the Future
My $250 was nothing compared to some of the gambling amounts I’ve seen. Even over Street Fighter 2.
If you had have told me twenty years ago that large amounts of money would regularly change hands over the games I grew up playing, I would have laughed and wondered what you were smoking. But as kids I guess we couldn’t exactly foresee what technological turns were around the corner, because frankly, I used to absolutely kill at SF2 and if I knew there would be money made as a streamer or gambler, I would’ve kept it up.
I still think back to when I was a kid and my father told me there was no money in playing video games. Nobody’s going to pay you to play video games all day—basically an exact quote. Granted, the conditions those kids are under, I probably wouldn’t want to play after a few fifteen hour shifts, but it beats scrubbing toilets. Maybe.
Let that be a lesson to all of you would-be entrepreneurs out there with your pogs and your NFT’s—never listen to your parents.
—Joseph Morton
Full disclosure: Tiidal Gaming is an equity guru marketing client.
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