Gambling in China – it’s a big no no. But with the underground industry hugely lucrative in the mainland, many businesses are finding more legal means to monetise the gambling psyche within the Chinese population with sports tech company SportsHero (ASX: SHO) the latest to join the movement through the eSports predictor competitions.
Just because you cannot gamble in China, it doesn’t mean you can’t predict winners of sports or eSports matches and be rewarded. And through SportsHero’s newest integration with super-app WeChat, residents of China won’t even need to change apps from their smart device to place their predictions on eSports outcomes where rewards can be won if they are correct, or at least more correct than their fellow fans through predator competitions.
SportsHero will offer these prediction competitions in both amateur and professional eSports tournaments where the tipping functionality will be built into WeChat. A super-app, WeChat has more than 1 billion active users per month and SportsHero will utilise the messaging functionality to have links to their prediction tournaments shared quickly, encouraging more people to join to increase their pools.
“I am delighted to report significant progress with our China strategy in the biggest eSports market in the world,” said SportsHero CEO, Tom Lapping.
In addition to launching their eSports tipping platform within the WeChat app, SportsHero has further advanced their strategy to target eSports in China through a co-operative agreement with Wuhan Esports Association (WEA), the second largest gaming association in China.
WEA owns and operates the official Wuhan Universities Esports Games, an annual competitive esports event that hosts semi-professional teams from 64 universities with in excess of 2,000 teams and over 10,000 players competing in ~5,000 matches a year that are broadcast live to millions of viewers.
Working with WEA, SportsHero will run prediction competitions on WEA tournaments to promote them throughout Wuhan, seeking to grow their presence in the Chinese market where the country now accounts for a third of global eSports revenue.
“It is a huge credit to our recently appointed Head of eSports China, Chen Fang Hui (Sherry), that she has been able to secure SportsHero’s first gaming agreement with the second largest esports association in China,” added Lapping.
“This initial agreement is expected to fast track the onboarding of eSports gamers and potential commercial partners.”
No strangers to eSports, gambling odds and predictive analytics, the targeted expansion to capitalise on China’s eSports market comes just months after SportsHero launched their eSports predictor which they promoted after it correctly predicted 125 match winners out of 189 head-to-head matches (66.14%) with the average winning odds of $1.78.
While gambling is technically illegal in China, Government crackdowns have been taking place with an Asian Racing Federation 2021 report identifying USD $145 billion exiting China to offshore websites and casinos every year, threatening economic security and social stability.
For the quarter ended 31 March 2022, SportsHero reported just $2,000 in customer receipts but are hopeful that increased users of their eSports prediction competitions will pave the way for advertising revenue in China.
Alfred Chan is an Analyst at Emerald Financial, specialising in ASX-listed small cap companies.
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