Rivalry CEO Steven Salz on the Economic Future of Sports Betting
The world’s most engaged sports and esports betting brand may have just gone live in its home market last spring — after Ontario became Canada’s first province to allow regulated internet gaming by private operators — but the roots of Rivalry can actually be traced back six or seven years ago to a Toronto basement.
A spirited gamer who competed in his first esports tournament over a decade ago, Rivalry CEO Steven Salz was working as an analyst at a boutique investment bank, preceded by forays into the defence industry and asset management.
Along with fellow Rivalry co-founders Kevin Wimer (now COO), Ryan White (now CTO), and Steve Isenberg (now Chairman), he found himself energized by what was happening in the video game space in 2015 and 2016. A wave of in-game monetization had started up, with video games allowing players to buy and sell in-game aesthetics with each other.
“This felt like the first big leap of connecting physical and virtual worlds, and identities, in a while,” Salz recalls.
At the time, the group was operating a third-party marketplace, which extended customers an easy way to buy and sell these goods. What quickly happened was that these goods, which had real money value, began to be used as currency.
One of the uses that became prevalent on the internet? Betting. Using in-game items as casino chips, essentially.
It was soon clear that demand existed for a new generation that grew up online to participate in this consumer experience. Salz, Wimer, White, and Isenberg were confident they could deliver precisely that, except within a fully regulated environment.
“The in-game item betting was mostly not legal, had no age-gating, and no responsible betting tools. We were confident we could build a great user experience that was legal, age-gated and had a culture of responsible betting,” Salz explains. “That eventually led to the creation of Rivalry, and our focus on building great products and experiences in a regulated framework for the next generation of bettors.”
Though operating a global team in more than 20 countries and still expanding, Ontario is Rivalry’s second fully regulated market following the approval of its Australian licence. As the country’s largest province, with a population upwards of 15 million people, the size of its online gaming market is estimated to be $1 billion annually.
Salz is quick to highlight the benefits of building in Ontario’s capital: Toronto. He hails it an “incredible tech hub,” boasting a “high density of technically skilled people who are a great fit for what Rivalry does.”
What’s more, he credits Ontario’s newly regulated environment with not only allowing Rivalry to grow organically in the province; to build great products for Ontarians and generate job opportunities locally.
The economic impact doesn’t end there. At a more general level, Salz says that industry regulation enables Rivalry to help bring revenue onshore versus all activity previously happening offshore, with zero percent revenue capture by the province.
“Now Ontario cannot just capture revenue that was otherwise lost, but enforce more stringent marketing regulations to protect customers, and enforce higher quality responsible gambling practices by law,” he elaborates. “It’s a net benefit across the board as a result.”
With no shortage of interest in the Ontario sports-betting market from operators, Salz acknowledges how critical the need will be for Rivalry to evolve and continue differentiating itself from the competition. Regarding new avenues that he expects Rivalry to one day explore, he cites the three core pillars that Rivalry focuses on.
There’s product. Rivalry owns and develops its entire product in-house, which is highly atypical for its industry, where most operators white-label multiple pieces or the entire thing.
“We will continue to innovate across the user experience,” Salz promises. “New products would be a possible enhancement to our Quest system, which functions almost like a mini role-playing game layered into the entire Rivalry experience.”
There’s media. Rivalry has 20+ social properties. That collective engagement puts it among the most engaged esports betting brands in the world.
“We are likely going to go much deeper on creating original content and media properties to deliver more value to our brand partners and communities,” he adds.
And there’s gaming. Rivalry has an in-house games team that builds original casino game IP. These games are much more entertainment-heavy versus something rapid, such as a slot machine. They are designed to create engaging content with Rivalry’s partners and customers, as well as enhance Rivalry lore and overall IP.
“We are developing additional original game titles as we speak,” he teases.
Looking even further ahead, Salz indicates how excited Rivalry is by the potential of more rapid in-play betting products, or what some call micro-betting. This permits users to bet on every pitch in baseball or snap in football, for example. Betting on politics and other global events might also be of interest in the future.
With all this in mind, and a report by Deloitte Canada projecting that the legalization of single-event sports betting in Canada could grow to close to $28 billion within five years, the theme behind Rivalry’s current marketing campaign would appear to offer a convincing conclusion.
Bet on Canada. Bet on Rivalry.