Tiidal Gaming Group (TIDL.C) came out of the gate as a multidimensional technology company offering esports entertainment as well as technology solutions for online betting, igaming, sportsbooks, media and video gaming.
The Canadian-based entertainment and tech venture had an expert management team led by Tom Hearne who brought on in January 2022. Hearne cut his teeth as CFO of theScore which was acquired by Penn National Gaming for $2.0 billion.
Charlie Watson, the company’s chief gaming officer, sported deep experience with over a decade in the gaming industry and 18 years in business management. Watson also owned and operated Canada’s first esports team/brand, now named Lazarus Esports. Lazarus, part of the Tiidal’s diverse portfolio, is Canada’s highest earning esports team and has worked its way up the ranks to 8th in North America and 29th in the world.
On the technology side, Max Polaczuk, Tiidal CTO, brought ample experience in machine learning, tech, finance and product management to the company’s leading-edge offering, Sportsflare, a venture he both founded and led before joining Tiidal.
Too much of a good thing?
At the outset, Tiidal was ready to fire on all cylinders, but with such a widespread business focus, even its multi-talented exec team found a need to tighten the company’s vision.
Esports is exciting and a global phenomenon that isn’t going anywhere anytime soon. However, it is a game of personalities, which depends on the continuity of kid athletes who were better conditioned to the strictures of high school than the world of business.
In short, it is incredibly difficult to maintain a consistent winning esports team and revenue stream. Like professional sports, it is more a labour of love for owners than a money-making proposition.
Tiidal’s Sportsflare, however, capitalizes on humanity’s need to gamble. Whether for bragging rights or personal gain, we have been putting it on the line long before our species mastered the written word.
As such, the company announced on August 23, 2022, its intent to strategically reform its business direction by going all in on Sportsflare and beginning the process of divesting its esports asset, Lazurus Esports as well as rebranding itself as Sportsflare.
This shift allows Tiidal to focus on Sportsflare’s agnostic technologies which give the company the ability to service any and all players in the sportsbook, online gambling, igaming, media and esports spaces without the burden or risk of having to push a singular proprietary product line.
So how big is the market Sportsflare intends to address?
Traditional sportsbooks and online casino games currently top the revenue list. The global sports betting market was valued at $76.75 billion USD in 2021 and is expected to grow to $167.66 billion by 2029 while global casino gaming was valued at $13.11 billion in 2020 and is expected to grow to $19.16 billion by 2027.
However, online casino games are relatively limited to traditional offerings like roulette, card games and slots. And even though choices are growing, there are basically ten types of sports betting available to gamblers including money line bets, point spread, over/under and parlay bets.
The emerging esports betting market however is nearly limitless in the betting choices one can have and Sportsflare’s powerful backend product line allows participants to take advantage this phenomenon with:
Esports Betbuilder – Esports’ first betbuilder interface that enables same-game parlay betting, allowing participants to combine any outcome and create their own unique betting market.
Micromarkets – an esports betting product which allows participants to take advantage of ultra granular and high-frequency betting options, turning almost any action and outcome in a gaming match into a live betting opportunity.
Bet-on-Yourself – provides the infrastructure for casual and hardcore gamers to wager on their favorite games.
Esports Odds – powered by deep learning algorithms and official data, this product opens up the betting possibilities by generating odds on a bevy of unique data points involved in esports.
Just how big will esports betting get?
Although it is hotly debated whether esports and esports betting will eclipse traditional sports and the gambling surrounding it, there is no division of opinion on whether esports betting is a long-term competitor in the online gambling market.
Global esports betting was valued at $12.6 billion USD in 2020 and is expected to reach $20.7 billion in 2027 for a CAGR of 13.1%. A sizable market for Sportsflare to secure a sustainable slice of.
How is Sportsflare positioned in the market?
Since Sportsflare was acquired by Tiidal in January 2021, Sportsflare has signed some key business agreements including:
- Production and distribution agreement with GameScoreKeeper ApS, a leading global esports data provider whose clients include Draft Kings, Pinnacle and SG Digital. Dec 2021.
- Partnership agreement with Germany-based Gaming Stars, a top European skill-based wagering platform. Dec 2021.
- Partnership agreement with EveryMatrix Group, a leading B2B provider of iGaming software, solutions, content and services for casino, sports betting, payments and affiliate/agent management to Tier 1 operators. The agreement called for the integration of Sportsflare’s Bet Builder into EveryMatrix’s platform. Jan 2022.
- Partnership deal with BOA Gaming, a global provider of innovative free to play and real money betting applications. Sportsflare agreed to provide BOA with its odds and date solutions for a gross gaming revenue share of every bet placed using Sportsflare’s odds and data feed. Feb 2022.
- Partnership agreement with Skrmiish, the first gaming app to allow gamers, streamers, teams as well as brands to collaborate, compete and monetize their gaming experiences. In the deal, Sportsflare agreed to integrate its Bet-on-Yourself infrastructure into Skrmiish’s app. Feb 2022.
- Licensing agreement with Bayes Esports Solutions GmbH, a leading German-based data provider for the global esports sector. This deal will allow Sportsflare to use live data from Bayes Esports for Sportsflare’s BetBuilder, pre-match/in-play odds and player proposition markets.
Deals aside, Tiidal Gaming announced back in March that its technology division had launched the first-of-its-kind player proposition markets for Dota 2 on its platform.
Also, another important business driver was announced in March, when the company announced it had submitted its application to the Alcohol and Gaming Commission of Ontario to obtain the Gaming Related Supplier – Manufacturer’s License.
The License will enable Sportsflare to supply AGCO approved sportsbooks with its AI powered esports betting solutions. The Ontario government launched its online gaming market later in April. In June, the Ontario iGaming market was estimated at $800 million CAD. Once Tiidal receives approval, this opens a significant domestic market to the company.
Tiidal received some notable recognition in June when the company was shortlisted as a finalist for the ‘eSports Product of the Year’ award in the 2022, SiGMA/AGS Awards Americas. Sportsflare was also shortlisted as a finalist for the ‘esports betting supplier’ award category in the 2022 EGR B2B Awards.
As part of its renewed focus on Sportsflare, Tiidal announced a non-brokered private placement offering for gross proceeds of up to $500,000 at the end of August. On September 20, 2022, the company celebrated the closure of its oversubscribed first tranche for aggregate proceeds of $561,905.10.
Tiidal intends to use these proceeds for Sportsflare operations in sales, trading and development as well as general corporate and working capital purposes.
Where from here?
Markets are grim right now and the world economy is heading into a rather pronounced recession. However, Sportsflare operates in a relatively anti-fragile sector as the worse things get, the more people will need to take a break from it.
As online gaming, esports and online sports betting provide a relatively low-cost option of escape, Sportsflare could be in for an incredible growth story. The company’s success depends on its execution from this time forward.
Tiidal’s esports offering was a life lesson and yes, in retrospect, perhaps a misstep, but if the partnership agreements keep coming in, Sportsflare could find itself a formative player in the emerging esports revolution.
In the short term, obtaining the Ontario license figures prominently in Sportsflare’s progression and domestic market presence. This will continue to be a much-anticipated announcement for shareholders.
Equity Guru’s own Jody Vance sat down recently with CEO Tom Hearne to get an update on the company’s progress and renewed direction.
Our Roundtable hosts also dipped into the company and its prospects here.
If want a technical breakdown of Tiidal, Vishal Toora dives in here.
Tom Hearne released a letter to shareholders today which provided a state of the union as well as the plan forward for the company. In the letter, Hearne was quick to point out:
“As you are all aware, the last 12-18 months have been challenging times in the macro environment with global economic uncertainty remaining a key issue. We have seen a technology sector correction and a lack of financing activity in the North American public markets.
Despite these turbulent times, Tiidal Gaming Group insiders, (collectively owning 50%+ of the company’s share capital), have continued to invest in the company through participation in the current $0.10 unit financing and actively buying shares in the open market. I have invested approximately $200,000 since joining the company earlier this year.”
As you can see there is definite commitment by management to keep the flame alive and provide investors with growth and prosperity. However, even though Sportsflare is hot on the trail to build its business with a determined chin, only the future will tell, so do your own due diligence and speak with a professional before making any investment decision.
Tiidal traded for $0.095 per share for a market cap of $6.96 million.
–Gaalen Engen