In apost announcing the change, Riot’s president of publishing and esports, John Needham, outlined why Riot is changing its stance.
The Perpetual Revenue Problem
“We know sports betting isn’t for everyone, and that some fans have strong feelings about it, and we respect that,” Needham writes. “However, the reality is that betting activity already exists around our sports and will continue whether we engage with it or not.”
Needham asserts that Riot should regulate the betting markets surrounding its game, rather than unlicensed bookmakers.
“With any new endeavour, there will be challenges, and if we need to make adjustments, we will. Please know our overall commitment is to do right by our players, teams, and fans as well as the world-class esports experience that we’ve built together and want to see thrive for years to come,” the statement concludes.
Generating revenue has always been a sticking point with esports, as, despite its popularity, teams can’t profit from gate receipts or television rights agreements, the main source of revenue for traditional sports teams.
As these esports grew in popularity, teams turned to venture capital to fund the inflated costs of their player rosters. However, after several years of failing to generate a return on investment for these backers, this money has largely dried up.
