Potential & pitfalls: Jersey’s first esports betting platform flopped, but would-be winners still have high hopes

A year ago, Esports Entertainment Group announced to considerable fanfare that it had become the first esports betting platform to be green-lit by regulators in New Jersey. For the first time, Jerseyans could place bets on approved esports competitions through its VIE.gg business.

In a matter of months, that betting platform was completely defunct. The company’s esports wagering system was shut down in its three main markets: Spain, the U.K. and, of course, New Jersey.

What happened?

According to those still invested in the sector after the void created by the collapse of New Jersey’s first highly touted esports wagering vertical, here’s what didn’t happen: Esports betting itself didn’t flop.

In spite of the failed first go at it, Anthony Gaud, founder and CEO of Atlantic City-based G3 Esports, said there will be another firm that will establish a foothold in a space that still holds promise in New Jersey (and, by the way, he’s hoping it’s his).

Esports and education

Anthony Gaud of G3 Esports has a seat on the advisory board at several of the colleges curating esports education in the Garden State. And each of them, he said, has its own vision for it.

Rutgers School of Business in Camden, one of Gaud’s advisory appointments, has decided that it’s not necessary to have esports-specific degree programs at every school. In order to still answer the call for more workforce readiness in this emerging area, it has built a certificate program that will be live by the end of February.

Corey Therrien. (Rutgers University)

Corey Therrien, program coordinator for professional and executive education at Rutgers, said the all-online certificate program is self-paced, but could be completed in about four months.

“Our program is aimed at those who either didn’t go to college, those who want a certificate to enhance their résumé after they graduate … or professionals considering a career change,” he said. “It’s a certificate program that doesn’t exclude individuals from pursuing a degree in the future. And it provides an opportunity to find a place to start in this new industry.”

Therrien added that the program prepares individuals for entry-level positions on the business side of the esports world. That could entail managing social media accounts, doing some event management or basic software and design work.

Just as there’s a diversity of esports educational options being unveiled in the Garden State, Therrien said there’s a diversity of opportunity for jobs in this ecosystem.

“There are some people who understand the speed of things in this industry, but a lot of people honestly still don’t take it seriously,” he said. “They might still think about it as kids playing video games. But this industry is offering real-world jobs, profitable events and big-time dollars.”

“It’s not an easy space to enter,” he said. “But it is a space that someone will enter.”

Gaud said there are “a lot of groups,” although he couldn’t talk specifics, across the gaming sector and other industries, that are vowing to do what they can to ensure the long-term success of the state’s esports wagering enterprise.

It’s a highly desired space, he added. It’s also a highly regulated one, and new enough to require a massive investment into marketing.

Gaud implied that Esports Entertainment Group didn’t account for that.

“I don’t want to talk bad about any company, but they could’ve done more to address the concerns that any company entering into a regulated space has,” he said. “In my view, that company did not have a proper plan of action for entering the space.

“The issues ran much deeper than the opportunities available (for esports in New Jersey).”

For its part, G3 Esports is attempting to pioneer the real money video gaming space, which brings together video games and online wagering. It’s working closely with state regulators, lawmakers and various organizations on a legally compliant expansion of its products.

Gaud is also head of the Esports Trade Association, which formed a committee that’s bringing together law firms, regulators and other experts for roundtables this year to help construct that compliance framework.

“I think we’re making a lot of headway and we have significant names in the field signed on,” Gaud said. “I think, over the next couple of years, we have a legitimate shot to become the defining group that can create pathways for companies to enter the space.”

New Jersey is considered to still be at the forefront of creating the model for esports wagering, with Nevada being another of the trailblazers. Gaud expects more than half of the country’s states to open up this market over the next three to five years.

“Considering the potential tax revenue for states and the need to protect bettors and players, there’s a lot at stake here,” he said. “So, states want to ensure they’re going about it the right way.”

Seth Schorr. (Fifth Street Gaming)

Seth Schorr, CEO of Fifth Street Gaming and chairman of the esports tournament-hosting Downtown Grand Hotel & Casino in Las Vegas, has been working on establishing Nevada esports wagering regulations since the state’s 2015 introduction of this new twist on betting.

What its gaming regulators have been working on since early last year is coming up with a solution to esports wagering licensees having to seek regulatory approval for every single in-person event, which has been introduced in most states’ rollouts.

“As you can imagine, that’s not really a sustainable model,” Schorr said.

Schorr considers the New Jersey Division of Gaming Enforcement and its head, David Rebuck, to be a proponent of progressive gaming policy. He’s optimistic that Nevada, as well as New Jersey, will emerge as gold standards of esports wagering rule-making.

In his view, the biggest challenge ahead for sportsbook operators interested in taking the lead on esports wagering is just understanding how they’re actually going to reach this community and start to build this market.

“Quite frankly, the regulated sports betting industry benefited in many ways from the illegal industry already betting on sports like football for many years,” he said. “That’s not really the case with esports. We’re starting from scratch.”

As Gaud mentioned, this is a costly enterprise. But his company is apparently willing to put its chips on the table.

Regardless, he’s holding off on doing any bragging about how his G3 Esports might do better than those that have tried to come before.

“Before anything, we want to make sure that we get everything right,” he said.