Esports Entertainment Group posts $7.3m Q4 loss on increased expenses and Argyll Entertainment audit

Esports Entertainment Group (EEG) has posted record revenue for Q4 2020 after its acquired Argyll Entertainment arm was consolidated into the business. The Malta-based operator reported revenue of $2.4m in Q4, up from the $0 posted in the same period of 2019, on top of a near 1,000% increase on the $222,392 posted in Q3. EEG reported total handle for December of $20m, while revenue during the month amounted to more than $850,000. Expectedly, operating expenses for Q4 2020 increased to $8.1m following the onboarding of several new subsidiaries, with EEG citing increased payroll, marketing and legal services as core reasons for the rise. EEG posted a $7.3m loss in the reporting period on a combination of measures taken following the UK Gambling Commission audit of Argyll, as well as depreciation and change in value of warrant liabilities which totalled $3.5m. The esports operator said it had increased its revenue guidance for fiscal year 2021 from $13m to $18m following the addition of Lucky Dino, Helix esports and ggCircuit via acquisitions. The group also expects to record $70m revenue in 2022. Elsewhere, EEG confirmed it had successfully raised $30m in capital via the sale of two million shares at $15 apiece. Grant Johnson, EEG CEO, said the group’s M&A strategy would put it in good stead to make gains in the growing US market. Johnson said: “The Covid-19 pandemic has absolutely accelerated the rapid growth of esports with mainstream broadcasts to national TV audiences on ESPN and Fox, as well as growing interest from traditional professional sports franchises, including top NFL, NHL, and MLS teams. “We believe the diversified esports and online gambling company we are building is ideally positioned to capitalise on these trends, providing investors broad exposure to the rise of competitive gaming and the legalisation of online gambling in the US.” “Looking ahead, we are building on our momentum, and with today’s capital raise of $30m, we have the resources to further accelerate the monetisation of our robust three-pillar strategy. The foundation we have built is primed to generate rapid growth in the quarters ahead,” he added. EEG stock was up 4.8% today to $15.72.