Rivalry CEO: Profitability is edging closer despite recent losses
Steven Salz says recent losses are narrowing and the company’s nimbleness opens path to profitability
Rivalry CEO and co-founder Steven Salz has said the esports betting operator is looking to secure profitability by the end of 2023.
Speaking to EGR following the release of the company’s latest financial update, Salz said that despite losses for full-year 2022 and Q1 2023, the path to profit was clearly defined and the group was on the way to achieving its goal.
Net loss in full-year 2022 amounted to $31.1m compared to $24.3m in 2021, but the CEO remains confident it is a process that needs to be undertaken by a growth company.
He said: “I think building a business requires opportunity cost. We are getting better at determining the decisions we want to make, like launching in a new market and taking a risk that may lose money in the short term but make money in the long run.
“Every quarter our net losses have been narrowing, and we are finding more operating leverage in the company with the things we are doing.”
Salz went on to note the nimbleness of the group’s operations allowed it to shoot for profitability before larger companies in the space.
Salz continued: “When you look at DraftKings, they lost $1.51bn last year and probably aren’t going to be profitable for a very long time, and they’ve been operating eight years longer than us; so although there’s a way to look at what we do negatively, people have to contextualise the trends of what we are doing, which is going the right way.”
The CEO also pointed to the sustainability of the business with its focus on millennial and Gen Z customers.
Salz explained the operator had created a casual player culture to avoid high rollers, which had led to safer environment for players.
He said: “We are pretty confident within our niche, but also in the ethical decisions we have made along the way. For example, before you had Rivalry, and before esports betting hit the mainstream, you had people illegally skin betting, and many of those were under 18.
“When we put Rivalry together, one of the original thesis points was that we saw there was a clear appetite in this niche, and we wanted to create a fully regulated environment for those people who wanted to bet on esports. So, it was from that initial decision tree that led us down the path we are on now,” the CEO added.