Esports betting operator Luckbox prepares Toronto listing

Esports betting operator Luckbox is preparing to list on Toronto’s TSX Venture Exchange, having accelerated its plans due to “booming business” during the novel coronavirus (Covid-19) lockdown.

The Isle of Man-based business has signed a letter of intent with capital pool company Elephant Hill, a TSX-listed shell company through which private businesses can go public.

According to the agreement, Luckbox’s shareholders will receive 32,200,142 Elephant Hill shares, priced at CAD$0.42 per share, and 2,076,143 Elephant Hill share purchase warrants.

The companies have appointed Gravitas Securities as lead agent bookrunner for a brokered private placement of subscription receipts, though which it aims to raise at least CAD$2m, with a CAD$1m over-allotment option.

Gravitas, alongside Beacon Securities, has also been appointed by Luckbox to lead a short funding round ahead of the combination.

Upon completion of the transaction, Elephant Hill’s existing directors will resign, and be replaced by a five-member board jointly appointed by the two companies.

Luckbox said that it had moved forward with its plans to list, after seeing esports betting activity spike amid the disruption caused by Covid-19. At a time when almost all major competitions have been suspended or cancelled, it has seen total bets increase 500% since countries began going into lockdown.

“All of our key performance indicators have been through the roof in the past three months,” Luckbox chief executive Quentin Martin said. “We’ve seen a huge uptick in KPIs across the board.

“As well as an increase in customers and betting activity, we’ve seen a huge level of interest from potential investors, who are realizing that esports is resilient to many of the forces that affect traditional sports, not least Covid-19 and a potential recession.”

Luckbox pointed out that esports was seen as the sport with the highest grow potential, and one which had flourished under lockdown. It noted that Amazon-owned streaming platform Twitch had reported an 80% increase in viewership since January, with gaming platform Steam reporting record user numbers for the year to date.

Luckbox, which is licensed by the Isle of Man Gambling Supervision Commission, offers real-money betting on popular esports titles such as League of Legends, Counter-Strike: Global Offensive (CS:GO), Dota 2, Overwatch, as well as sport sims Fifa and NBA2K.

“The potential of esports betting is well documented and these past few months have brought that into sharper focus, accelerating the numbers,” Martin added.

“Many fans of traditional sports have been exposed to the excitement of esports for the first time and, hopefully, they like what they see and will be sticking around.”