Canadian Gaming Company, Rivalry, Announces Big Changes

Toronto-based Rivalry Corporation has announced a recent round of private funding, layoffs, and technological improvements to its sportsbook and iGaming platforms.

Paradigm Shift

Rivalry was started in 2017 by Steven Salz and Steven Isenberg, and its niche in the sports betting market focused on esports and cryptocurrency. However, a recent shift in strategy has seen its mobile sportsbook expand to 40 new sports equipped with embedded live streams while its dashboard boasts a simpler interface.

Its iGaming interface has also been improved and now includes Casino Races, a head-to-head competition involving casino games. The company announced it pre-released the backbone of its crypto-focused and high-value player (HVP) strategy, NUTZ, formerly known as Rivalry Tokens.

Betting on the Future

The Q3 report was disappointing, revealing a betting handle of C$79.9 million, which was down from its second quarter handle of C$87.8 million and Q1’s C$94.7 million handle. However, this was not unexpected and has been chalked up to the company’s growing pains as it shifts direction for a brighter long-term outlook.

Rivalry’s press release stated, “The immediate financial results of this high-conviction business evolution is that short-term net revenue is down; however, we are beginning to go back on the offensive with a completely evolved product, brand, and marketing approach, as well as an operating footprint that presents a much smaller gap to profitability to close.”

The company also announced layoffs to roughly half of its workforce while trimming marketing expenditures by 30% in the third quarter that is expected to increase to previous levels in December. Three C-suite executives took voluntary pay cuts as well.

“Despite this transitional net revenue impact, we are already observing high signal from our work: in just the two short months since we began to deploy the initial set of crypto and HVP-targeted product releases, our average net revenue per user has hit all-time record levels, increasing by 51% as compared to the 2024 year-to-date average, and by 70% as compared to the trailing three-year average,” the company stated.

Capital Funding

Bringing in more cash to grow the business was one of the company’s priorities, and according to a press release on November 26, 2024, that’s precisely what they did. Approximately $1.94 million was raised by issuing 12,930,707 units at $0.15 per share, and it may issue more closings that will increase the total proceeds, including the initial tranche, to $3 million.

A company press release stated, “The purchasers of the units and the extent of such participation were not finalized until shortly prior to the completion of the offering. Accordingly, it was not possible to publicly disclose details of the nature and extent of related party participation in the transactions contemplated hereby pursuant to a material change report filed at least 21 days prior to the completion of such transactions.”