Rivalry reports 12% YoY decline in Q2 GGR but crypto push yields results

Rivalry has reported a 12% year-on-year (YoY) decline in Q2 GGR from C$8.5m to C$7.4m, with bosses citing a strategic shift to attracting VIPs as a core reason for the decline.

The reduction in GGR followed betting handle slumping 22% YoY to C$87.8m, down from C$112.2m.

A combination of a quieter US sports calendar and the TSX-listed firm noting a prioritisation of its margin led to the decline.

Rivalry said that as the focus on margin comes into view, it can “negatively impact betting handle as players turn over their balances less”.

On the VIP front, Rivalry said it was now shifting resources to the segment as a “course correction of our historical strategy” to better capture the smaller portion of players that drive revenue.

However, net revenue for the quarter landed at C$4.7m, a 22% YoY jump, with Rivalry highlighting that the GGR net revenue margin of 62.5% was the highest in company history.

The operator said: “The improvements reflect ongoing initiatives to increase margins through innovation and adjustments to the product offering.”

The firm’s casino segment generated 60% of betting handle and 24% of GGR for the quarter, which Rivalry said reflected the expansion of the casino product line, including the original game Cash & Dash released in the second half of 2023.

Product gains were also cited by management during the reporting period, with pre made combos, or pre-packaged parlays, resulting in 500,000 wagers since its release in January.

Rivalry said pre made combos were driving “strong upticks in user activity for higher margin products”.

Net loss for Q2 stood at C$5.4m and this included C$520,000 in interest expense accrued on the convertible denture that is not due until the end of next year. Therefore, the company considers net loss for the quarter to be C$4.8m.

The company reported C$4.6m in cash as of 30 June 2024.

Alongside the release of the Q2 report, Rivalry championed initial success it had seen following the release of its proprietary cryptocurrency, the Rivalry Token.

The token was first announced in May and forms part of Rivalry’s concerted shift towards crypto-users.

The TSX-listed firm shared in its results statement that Rivalry Token delivered an additional C$1.7m in revenue since Q2 closed.  

While Rivalry Token is yet to officially launch, customers have access to it by connecting their digital wallets, earning rewards through on-site activity, and more recently off-site through a mini experience called a “faucet”.

The “faucet” was described by the group as an on-site, pre-farming session to drive connected wallets and acquire new players.

Rivalry is also in the process of developing a social-based product, due to launch in September, to further expand its geographic footprint.

The operator also shared that more than half its customers that opted-in to receive Rivalry Token are reactivated users while another 15% are new, marking the company’s most successful reactivation campaign.

The firm added: “Rivalry Token customers are more engaged users and play consistently during all days of the week with casino driving two-thirds of betting handle.”

The company also said it expects to enter a licencing agreement for its first-party casino games in the next few months, which would open up a new revenue stream for its B2B vertical.

Steven Salz, Rivalry CEO, expanded further on the company’s VIP and crypto aims in his comments alongside the report.

He said “At Rivalry, we have narrowed our focus primarily to two areas that are showing the highest potential for growth in our history: crypto expansion led by tokenisation and VIPs.

“Rivalry has also been shifting resources toward VIP’s, which is closely aligned with our push deeper into the crypto segment.

“I have extreme conviction that the significantly above-market KPI’s we have driven for that majority of players, led by our obsessive dedication to their success, when now directed toward the smaller percentage of high-value players, that within this industry drives multiple times the value, will lead to a sizeable change in Rivalry’s business outcomes.”

“Rivalry Token is uniquely positioned to serve a number of our near and long-term goals to expand our geographic footprint and acquire and retain high-value players, which we are beginning to see signals of.

“In just a few months, Rivalry Token has attracted new customers who are twice as valuable as our average user and marked the most successful reactivation campaign in the company’s history,” he added.