Rolling the Dice on Rollbit Fundamentals

Introduction

Established in February 2020, Rollbit has recently become a prominent player in the online gambling sector, providing a diversified platform that spans casino games, sports betting, crypto-asset futures, and a marketplace for NFTs.

Rollbit has surpassed many crypto businesses in revenue performance, establishing itself as a noteworthy contender. Rollbit boasts an impressive annualized 30-day average revenue run rate of ~$680M, a figure that’s grown by ~18% MoM over the past three months.

Notably, a portion of Rollbit’s revenue is passed onto token holders via an hourly buyback and burn mechanism. The buyback as a % of revenue varies slightly depending on which sectors are driving revenue, but it typically ends up being roughly ~15%, so the two grow in tandem. Based on trailing 30-day metrics, the current annualized buyback equates to ~$104M. RLB has a current market capitalization of $536M, meaning it trades at 5.75x P/E and 0.79x P/S.

Although the trajectory of Rollbit’s revenue growth has been impressive, there’s still a lot of room for further expansion. The Online Gambling industry has grown considerably in recent years, and is expected to continue growing at an annualized rate of 9% through 2027. In addition, Rollbit’s closest competitor, Stake, did $2.6B in annual revenue in 2022.

This report delves into Rollbit’s key metrics and product offerings, including a competitive landscape analysis, and explores the implications of these dynamics on the Rollbit Coin (RLB). We also dive into the risks, which are important to understand and not be overlooked.

A Primer into Rollbit

Rollbit’s three core offerings are an extensive casino experience, sports betting, and leveraged futures trading. All three of these are enhanced by Rollbit’s loyalty program, which we’ll dissect further a bit later.

The crypto futures product is compelling for several reasons. For starters, the fees are highly competitive with other trading platforms. It’s also very easy to use, with one-click trading, compared to an index price where you’re quoted an entry/exit fee that already has slippage baked in.

Under their flat fee structure, fees will vary based on swap size and market volatility, but generally, you’re able to trade mid 7-figures in size while paying a mid-single-digit basis point fee (that’s inclusive of slippage). The fee scales down for smaller positions and can be further reduced by up to 60% when paid in RLB.

They also offer a PnL fee model that charges nothing until a gain is realized, with the fee varying based on the leverage used and size of the move — which can also be reduced depending on how much RLB you hold.

They provide an ROI calculator where you can toggle inputs to understand what the effective fee will be for a particular trade.

Source: Rollbit

The Casino product is also very competitive. Live Dealer casinos are a rapidly growing sector of the online gambling market. Rollbit uses Evolution Gaming as its Live Dealer. Evolution Gaming is the global industry leader for Live Dealer software, used by incumbents like FanDuel and DraftKings. Live Dealer limits on Rollbit are also higher than many other platforms.

The sportsbook is the weakest product of Rollbit’s three verticals, but they’ve hinted multiple times at potential future improvements. They have a decent core offering that’s competitive with other providers, but there are some instances where the odds are a bit worse. There’s also room for improvement when it comes to increasing the depth of the bets they provide. The sports betting industry is large and growing though, so an improved sportsbook product would drive more users to the platform, providing a tailwind for all its segments.

It’s difficult to assess the effectiveness of Rollbit’s loyalty program from the outside, but it seems to be designed well and serves its purpose. It keeps users coming back to the platform often as they feel like they’re building up their standing and achievements.

On top of offering a rakeback (more on this below), they provide daily and weekly rewards that unlock multiple times throughout the day, or over a period of a few weeks. Users can also get NFTs to supplement this loyalty program. Rollbit has two NFT types: Rollbots and Sports Rollbots. These NFTs afford holders unique benefits such as rollbacks, enhanced lottery odds, and a 10% share of the buyback.

The Rollbit Coin