SharpLink Gaming Issues CEO Letter to Shareholders
MINNEAPOLIS, MN / August 28, 2023 / Rob Phythian, Co-Founder and CEO of SharpLink Gaming Ltd. (NASDAQ:SBET) (“SharpLink” or the “Company”), a pioneer of targeted, data-driven fan activation and conversion solutions for the U.S. sports betting and iGaming industries, today issued the following letter to the Company’s shareholders outlining SharpLink’s growth strategies and providing key performance indicators (“KPIs”) by which the Company’s progress can and should be measured as SharpLink continues to evolve. Phythian states:
“SharpLink is on a mission to have a profound impact on the U.S. sports betting industry – not just by improving prevailing methods for reaching and converting sports fans into sports bettors, but by fundamentally changing how we:
- connect with and entertain fans wherever they are;
- seamlessly tap into each fan’s affinity for the sports, teams and players they love through quality articles, free-to-play games, real money fantasy sports and contests, polls, quizzes and other content that deeply resonates, educates, entertains and inspires fans to return again and again; and
- invoke calls to action that result in highly personalized and ‘sticky’ user experiences, quantifiable conversions to sports bettors and active sports product consumers and, of course, profitable revenue growth for SharpLink and our valued customers and business partners.
“Over the past 18 months, our team has focused on executing defined strategies to acquire or organically produce vital, foundational building blocks, significantly advancing our tech-driven growth platform. Chief among these strategies was acquiring an affiliate marketing company with proven experience in performance-based marketing and methodologies; completing the merger with SportsHub, which brought SharpLink a powerful line-up of proprietary fantasy sports gaming assets; and expanding our technology development team with hand-picked IT specialists and industry respected leadership.
“SharpLink has invested considerable time and money to bring together strong assets, technical capabilities and leadership to build our intelligent C4 solution. As we and our investors look to measure the accretive nature of these strategic moves, we are sharing our internal KPI’s that align directly with each C4 component:
- Connect is measured by AUDIENCE – reaching more fans across our owned and operated properties as well as reaching more sports fans through our league, media and operator partners;
- Collect is measured by ENGAGEMENT – gathering and categorizing fan interests, intents and delivering a more personalized experience;
- Convert is measured by CONVERSION – upon reaching and engaging sports fans, we deliver new, sports bettors to sportsbooks; and
- Capitalize is measured by FINANCIAL PERFORMANCE – this is the ultimate value that we deliver to our investors and partners.
“Through our proprietary portfolio of fantasy sports games and direct-to-player affiliate marketing websites, the total audience of sports fans that SharpLink reaches either directly or indirectly stands at an estimated eight million users today. We are avidly working to expand this number through an aggressive marketing approach and through expanded state licensing initiatives that continue to fuel growth of the total addressable market within U.S. sports betting. Our state regulatory initiatives have resulted in SharpLink being licensed and/or authorized to operate in 24 U.S. states, the District of Columbia, Puerto Rico and Ontario, Canada, representing nearly 100% of the current legal online betting market in North America. As more states legalize online sports betting, SharpLink intends to pursue licensing in those states, as well.
Fan Engagement and Retention
“Fan engagement has become a sort of buzz word in the sports betting industry, but what does it actually mean? The competitive landscape is crowded with solution providers hoping to assist sports media companies, leagues, teams and sportsbooks in achieving better fan reach, engagement and retention rates, as measured by visitor traffic, visit frequency, time spent on the site or app, and average revenue per user.
“SharpLink’s business units now combine to provide superior fan engagement and retention rates. For instance, when an operator provides us with its betting market data and access to PAM data, SharpLink’s C4 recommendation engine, powered by our generative AI-enabled BetSense, will surface the most relevant bets to a user based on several factors, including betting preferences (teams, players, types of bets, size of bets), considerations such as ‘games starting soon,’ in-play opportunities, et al), or specific bet types that can be matched with an appealing offer. Through data-driven decision making, the C4 engine can increase user engagement and satisfaction leading to decreased churn. Moreover, based on the insights we capture in our data analyzation process, we can also deliver fans integrated offers for highly targeted sports merchandise, game tickets and other digital commerce products.
“While generic ads and promotions drive momentum in legal betting states, they disregard those in non-betting states and give those potential customers no direct call to action. Our free-to-play games extend to all states, regardless of legal betting laws, and can be applicable to all teams, leagues and media operators. In turn, this builds brand recognition and promotes loyal fan engagement, higher visitor frequency and stickiness to a particular operator. Moreover, SharpLink’s free-to-play games give our customers an opportunity to collect valuable data insight on personal preferences and individual behaviors, which in turn can enhance targeted messaging for new users.
“One of the most critical findings from Variety Intelligence Platform’s research report on sports gambling, released in December, 2022, is that betting on a sport ramps up consumer engagement with that sport. In fact, the report revealed that two-thirds of those who bet on NFL games say they watch more than usual when betting. However, SharpLink has determined that getting sports fans converted to sports bettors is turning out to be more of a science rooted in the art of personalization, rather than simply serving up an onslaught of generic ads on websites and apps, commercials on televised events and sports book offers splashed across in-field jumbotrons.
“From Netflix to Amazon, we’re surrounded by extreme personalization every day. Personalization is powering the future of the media industry, helping businesses stand out from the competition and nurture a loyal fan base. However, when it comes to sports betting, fans are still faced with static interfaces devoid of any personal relevance. SharpLink’s C4 technology platform has taken a fan-centric approach to development of our conversion capabilities with a heavy emphasis on personalization of content. As a result, we are not only capable of delivering greatly enhanced user experiences, but we deliver materially higher retention and conversion rates when compared to prevailing industry standards. Through ongoing innovation of our C4 platform, we fully expect that our conversion rates will prove to be among the best, if not the best, in the U.S. sports betting market.
SharpLink’s KPI related to our financial performance will be the one that you, our investors, will be tracking closely. We recognize the importance that revenue growth, expense discipline, positive cash flow and achieving sustainable profitability. Every step we take in the building of our business will be taken with the aim of strengthening our financial results quarter-over-quarter.
“Why should you be optimistic about the future of sports betting in the U.S. and the future of SharpLink? While there are no foregone conclusions, and SharpLink has much to prove, we will be focused on leveraging technological innovation and performance across all of our business units, to extend our leadership in this rapidly growing new industry and to build an important and lasting company that each of you are proud to hold in your investment portfolio. 2023 has proven to be a pivotal year for SharpLink, thus far – and one in which we have achieved several key milestones that we believe will position us for dynamic growth as we move forward. We plan on becoming much more vocal by way of a steady stream of press releases to provide greater visibility into our progress in the weeks and months ahead.
“In closing, everyone at SharpLink remains grateful to our shareholders for your trust and ongoing support and encouragement. We are working very hard to ensure that your belief in us in well rewarded.”
About SharpLink Gaming Ltd.
Founded in 2019, SharpLink is a leading online technology company that connects sports fans, leagues and sports websites to relevant and timely sports betting and iGaming content. SharpLink uses proprietary, intelligent, online conversion technology to convert sports fans into sports bettors for licensed, online sportsbook operators. In addition, SharpLink specializes in helping sports media companies, leagues, teams and sportsbooks develop strategies, products and innovative solutions to drive deep fan activation and engagement with highly interactive free-to-play games and mobile applications. Further, SharpLink owns and operates a variety of real-money fantasy sports and sports simulation games and mobile apps on its platform; and is licensed or authorized to operate in every state in the United States where fantasy sports and online sports betting has been legalized. SharpLink’s proprietary fantasy sports platform reaches more than two million fantasy sports fans who spend almost $40 million annually on its portfolio of digital gaming experiences and contests. For more information, please visit the SharpLink website at www.sharplink.com.
This release contains forward-looking statements that are subject to various risks and uncertainties. Such statements include statements regarding the expected growth in the online betting and iGaming industries, the Company’s ability to grow its business, the potential benefits of the Company’s products, services and technologies and other statements that are not historical facts, including statements which may be accompanied by the words “intends,” “may,” “will,” “plans,” “expects,” “anticipates,” “projects,” “predicts,” “estimates,” “aims,” “believes,” “hopes,” “potential” or similar words. Actual results could differ materially from those described in these forward-looking statements due to certain factors, including without limitation, the Company’s ability to achieve profitable operations, government regulation of online betting, customer acceptance of new products and services, the demand for its products and its customers’ economic condition, the impact of competitive products and pricing, the lengthy sales cycle, proprietary rights of the Company and its competitors, general economic conditions and other risk factors detailed in the Company’s annual report and other filings with the United States Securities and Exchange Commission. The Company does not undertake any responsibility to update the forward-looking statements in this release.
SHARPLINK MEDIA AND INVESTOR RELATIONS:
SharpLink Gaming Ltd.
Dodi Handy, Director of Communications
Email: [email protected]
SOURCE: SharpLink Gaming Ltd.
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