Canadian esports betting site, Luckbox has reported a net loss of $4.57 million for 2020 just days after CEO Quentin Martin announced his departure from the company.
Red Luck Group, the parent company of Luckbox in their financial statement for the year 2020 revealed they had a net loss of $4.57 million, down from the previous year’s $17 million net loss. The drastic cut in losses was possible because of the company’s increased revenue and a result of share-based compensation being reduced.
In 2020 the revenue increased almost 18 times over to $61,300 but remained low and amounted to a gross loss of over $170K against the cost of sales amounting to $238K. Salaries and director fees were the largest expense at $867K, followed by legal and professional fees of $750K and share-based compensation of $734K, and $430K in general and administrative costs. This led to an operating loss of $4.57m.
CEO Quentin Martin said,
Our focus throughout fiscal 2020 was on developing our proprietary esports betting platform and, despite nominal marketing spend, we were able to organically and efficiently increase our audience as the global pandemic brought esports betting into focus during early 2020,
However, the calendar of esports events was adversely impacted, particularly in the second half, due to the postponement of the biggest esports event of the year – the Dota 2 International. This year’s esports calendar looks much better, and our strong balance sheet positions us for healthy growth in 2021 and 2022. As we continue to grow our team, enhance our product, and spread the word about Luckbox with a comprehensive marketing strategy in place, we look forward to offering our customers the opportunity to wager on several highly anticipated events.
As per Martin, the business’ low revenue was due to the fact that it was still primarily focused on developing its platform and due to the 2020 calendar for esports being adversely impacted by Coronavirus Pandemic.
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