E-sports has new publicly traded company putting on a poker face

The rapidly expanding world of e-sports has a new publicly traded company, one that is hoping to learn from the business model of another online gaming predecessor: poker.

Black Ridge Acquisition Corp has agreed to purchase Allied Esports International, an e-sports entertainment company, and WPT Enterprises, the creator of the World Poker Tour, from Hong Kong-listed Ourgame International Holdings for about US$150 million.

The new company, called Allied Esports Entertainment, will have an initial enterprise value of about US$214 million and trade on the Nasdaq under the symbol AESE.

The aim is to bring the World Poker Tour’s business model for live events and media distribution to the burgeoning world of competitive video gaming, which is projected to grow to a US$1.7 billion industry by 2021. The new company plans to operate venues, sell the content generated by those events, and then move viewers onto a new online tournament platform to be launched in 2020.

“There’s a gap in monetisation in e-sports right now,” said Black Ridge chairman Ken DeCubellis, who will be chief financial officer of the new company. “It’s a big buzzword, but the main way companies and investors are approaching e-sports is by investing in the game publishers or acquiring the teams that compete. We see an opportunity to monetise the viewership right now.”

There are 40 million people playing online poker globally, according to DeCubellis. By contrast, there are 2.2 billion video gamers, with 380 million viewers of global e-sports contests.

“E-sports is such a bigger market,” DeCubellis said. “And the growth rates are so much higher.”