Esports Entertainment Group (EEG) reported a significant decline in revenue of 71.9% to $2.7m in the first quarter of the year after selling its Bethard business. The sale, which was completed in February for €9.5 million, resulted in the complete offloading of the business.
Additionally, the winding down and eventual liquidation of Argyll entities resulted in the cessation of revenue-producing operations in December, affecting year-on-year comparisons. Despite the decline in revenue, CEO Alex Igelman remains optimistic about the long-term growth prospects of EEG, following the recent restructuring of the business to support growth and reduce costs.
After the first quarter, EEG also agreed to acquire a 30% minority interest in esports content producer Drafted.gg, further supporting its long-term ambitions. Igelman stated that the company thoroughly reviewed its operations, identifying unprofitable operations and contracts, and taking decisive actions to set the stage for a bright future. Despite incurring one-time expenses, the company expects a yearly reduction in operating expenses of more than $4.0m.
In Q1, revenue was down across both core segments, with igaming revenue falling 76.7% to €2.0m and gaming revenue dropping 27.3% to €733,768. EEG attributed the decline to worsening investment and market conditions, as well as regulatory changes in Finland and the UK. Geographically, US operations drew $733,768 of all revenue, with interactional activities generating $2.0m.
Cost of revenue was slashed by 81.3% due to the sale of certain assets, and total operating expenses fell by 51.0% to $7.7m. Despite significant cost savings, the pre-tax and net loss widened compared to the previous year.
Igelman emphasized the company’s long-term vision to develop initiatives that expand esports and igaming solutions and create a more comprehensive, end-to-end offering of online betting options for customers. He also highlighted the company’s commitment to maintaining gaming integrity and audit processes and supporting expected rapid expansion within the US market. Overall, Igelman expressed confidence in the future prospects of EEG, fueled by strategic investments.