Steven Salz, co-founder of Rivalry Corporation and its CEO is confident about the future growth potential for the sportsbook operator and igaming provider despite reporting a higher net loss in Q1 and lower revenues. He cites the introduction of the new native cryptocurrency token by Rivalry as an important development.
The net revenue for the quarter ending 31 March was $4.5m ($3.5m/euros4.2m). The $4.5m (PS3.5m/EUR4.2m) is a decrease of 16.7% compared to the $5.4m that Rivalry reported in Q1 last year.
The net revenue is the total gross gaming revenue after subtracting operational deductions. Gross gaming revenue was down by 35.8% in the first quarter of this year to $7.7m. This decline included both igaming and sports betting.
Salz, however, was mostly optimistic when he reflected on the results. Salz spoke of the record-breaking revenue margin, which was 58.5%. This is the highest ever in Rivalry’s history. Salz noted that player spending increased by a third quarter on quarter during the first three months of 2018.
Salz stated, “We’re very encouraged by our improvement in net revenue margins experienced during Q1, which hit an all-time high. This proves that our strategy delivers results. It also represents a significant improvement compared to average levels throughout 2023.”
We are eager to provide more details in the future about B2B opportunities.
Rivalry releases new cryptocurrency token
Salz has also been focusing on Rivalry Token, the new crypto-token of the operator. The operator claims that this will increase functionality, economy and user experience across the product range.
Salz said that Rivalry Token will launch in the second quarter and is one of many initiatives Rivalry has in store to better position itself in the crypto gambling industry, as well as to serve the core audience of bettors under 30.
After the launch of the Rivalry token, customers will have access to it in all active Rivalry markets except for Ontario and Australia.
Salz stated that “Rivalry has a strong position to take advantage of the crypto growth opportunities with its proven product, brand and captive audience. These digitally-native users are fueling this economic revival.”
The launch of cryptocurrencies along with a wider expansion in the market strengthens product-market match among an audience under 30. This allows us to be competitive and capture a significant share of the fast-growing, highly lucrative segment of the market.
Quarter-on-quarter growth for Rivalry
Rivalry still has work to do in order to improve its Q1 performance.
Net revenue as well as gross gaming revenue decreased year on year. The main reason for this was the 39.8% drop in gross gaming revenues from sportsbooks, to $6.2m. The gross gaming revenue for igaming also fell, but less dramatically. It was reported at $1.5m, down 11.8% compared to last year.
Salz emphasized that there were reasons for optimism in the Q1 spending by players. The total betting handled during the first quarter was $94.7m. This is up by 11.3% on Q4 last year.
In addition, gross and net gaming revenues were both higher quarter over quarter. Gross gaming revenue increased by 20,3% while net revenue rose 50.0%.
Increased Net Losses in the First Quarter
The operational deductions of gross gaming revenues reached $3.2m. The $6.5m that was deducted from Q1 2023 has been improved to $3,2 million.
The total operating costs increased by 6.7%, to $9.6m. This was due to an increase in marketing, promotions and technology, and a higher expenditure on content. Net financial costs for Rivalry were also $141,083.
Without tax, the net loss was $5.2m compared with $3.3m for Q1 of last year. Rivalry’s Q1 net loss was $5.7m after accounting for the negative impact of foreign currency exchange of $498.111. This is higher than last year’s $3.9m.
