The group behind one of the largest esports establishments in the western United States may sell ownership of the arena and exit esports altogether.
HyperX Esports Arena Las Vegas owner Allied Esports is considering options for the company’s future that could include selling the arena, according to Claire Wu, CEO of the company, in a conference call on Aug. 16.
Allied has hired investment bank Lake Street Capital Partners to advise them on the future of the company’s esports business and to search the potential acquisition market, Wu said.
These options include the sale of the 30,000-square-foot facility located in the Luxor Hotel & Casino on the Las Vegas Strip, Allied spokesman Brian Fisher told the Las Vegas Review-Journal on Aug. 16 in an email that no buyer had been identified or negotiations started.
Allied had sales of just $ 824,000 in the second quarter of 2021, according to its quarterly report released Aug. 16. The company lost more than $ 3 million in the second quarter of 2021 compared to $ 2.2 million in the second quarter of 2020. The publicly traded company’s stock is valued at $ 1.94 per share starting at 1 p.m. CT today. Exploration of a possible sale of the Las Vegas arena came after the company also sold its subsidiary World Poker Tour to Element Partners for $ 105 million in July.
Since opening in 2018, the arena has been a hub for amateur and specialty gaming events in Las Vegas. It hosts a number of weekly events for the Las Vegas locals, but previously hosted the 2019 annual League of Legends All-Star Event, an official tournament of the NBA 2K League, a special livestreaming event starring Ninja in 2018 and award ceremonies. Esports Arena Las Vegas announced an extension of its HyperX naming rights contract in January 2021.
However, due to the COVID-19 pandemic, the company saw a drop in pedestrian traffic amid lockdowns, fewer travel and stay-at-home orders – although it is slowly recovering after increased vaccinations and the lifting of restrictions. However, the company said the average visitor to Arena 16, well below the average Las Vegas visitor and unable to spend on alcohol, is a high revenue driver for most casinos and casino-adjoining attractions.
Outside of its Las Vegas Arena ownership, Allied owns a traveling gaming truck, also branded by HyperX, and operates an affiliate network of venues that once included venues in Oakland and Orange County, California. It also has an investment in the Esports Arena company, which has venues in certain Walmart locations across the United States.
