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Last Update: 25-Feb-2022 Article Status: Public
HouseMaster combines decentralized finance (DeFi) with igaming and web2 gaming with web3 properties. The traditional gaming world has a large balance of unutilized assets sitting in the gaming accounts in fiat. Moreover, igaming incurs high transaction costs from payment providers (PSPs) in fiat, have low player retention, and generate income only from the gaming business. Ultimately the players lose to the house over time, with the exception of, for example, some poker P2P high-rollers.
HouseMaster allows the players to “become the House” by offering a variety of unique benefits:
👉 DeFi yield from staking the native $MASTER token and other crypto assets
👉 $MASTER token owners share the profit of the partner casinos ****and benefit from the token burn from gaming margin
👉 Play-to-earn benefits (see section Gameplay)
👉 In-game benefits such as metaverse integrations, NFT avatars, community, and streams
👉 Community enablement; P2P transactions, chat, personalized profiles, player achievement badges, competitions
HouseMaster’s vision is to become the turnkey Web3 platform for online gaming in its post-IDO phase (see Roadmap). $MASTER will be used and staked by players in multiple partner casinos. Partner casinos will use $MASTER and the HouseMaster platform will expand via:
👉 Franchising $MASTER DeFi vault to external casinos
♠️ Thought leadership in technology is at the core of HouseMaster.
♠️ The team has previously built, integrated and exited online gaming platforms with significant scale (for example, FTR Poker, now Blitz Poker, by Dan Bilzerian).
♠️ HouseMaster has assembled an industry-leading team consisting of industry veterans with backgrounds from Goldman Sachs, Accenture, Tesseract, and leading web3 companies.
♠️ The team has also previously built financial services technology for large financial institutions - and integrated 3rd party games on the gaming side for a full-suite online gaming platform.
♠️ Over the years, HouseMaster has built industry-leading products in online gaming setting its apart from its peers
♠️ The latest addition to the product suite is interest-bearing DeFi product, which will utilize direct connections to decentralized lending protocols (Aave, Compound, UniSwap, PancakeSwap, etc.) as well as a yield-optimizer partnership with Tesseract Investment, which is a regulated crypto lending platform
Link to presentation: HouseMaster Investor Presentation (short-form)
HouseMaster operates a well-proven online gaming business model.
Note: The below estimates are for a single partner casino operation.
👉 Casino & Sports Betting Revenue:
🔸The casino collects GGR (gross gaming revenue) which reflects the difference between the amount of money players wager minus the amount that they win. HouseMaster will collect GGR both from its casino operations as well as Sports Book. The launched casinos are each expected to generate $7m of GGR in the first 12 months after launch and $64m during the 3rd year of operation.
🔸 NGR (Net Gaming Revenue): measured as GGR minus player bonuses, cashback, and jackpot contribution. The launched casinos are each expected to generate $6m in the first 12 months after launch and $55m during the 3rd year of operation.
👉 Gross Profit (contribution margin, after marketing costs)
🔸 Gross Profit is defined as NGR less: Casino Game Suppliers cost (GGR share), casino bonus allowance, Sports Suppliers cost (GGR share), Platform Provider cost (GGR share), payment service provider costs (PSP % of deposits / withdraws), chargebacks, gaming tax, marketing, and affiliate costs. The launched casinos are each expected to generate $1m gross profit in the first 12 months after launch (reaching 24% gross margin at year-end) and $55m during the 3rd year of operation (reaching 39% margin)
🔸 HouseMaster team has previously run casinos at 35%-40% gross margin in a model where 3rd party providers provide the games.
👉 EBITDA & Cash Flow
🔸 OPEX: The casino operations operational expenses consist mainly of general manager, marketing head, customer support operations. Further, there is a (team) lead for acquisition, retention/content, marketing, vip clients, affiliates, data analytics, creative designer, copywriter, HR manager, technical development and accounting. The overheads consist of office rent & utilities.
🔸 EBITDA: The launched casinos are each expected to generate $15m of EBITDA in the 3rd year of operation (reaching 26% margin)
🔸 Required upfront investment: each casino requires around $0.5m investment to be operational and reach profitability
👉 KPIs & Unit Economics
🔸 Deposits: Average deposit in HouseMaster target market is on average $250 at inception going up to $300 in the latter years of operations
🔸 Players: In the first year, the launched casinos will reach avg. 5,000 players after 12 months and +25k monthly actives after three years of operation
🔸 ARPU: average revenue per user per month is expected to be $130-$160 in the first year of operation of each casino and $230/month after three years
➡️ The positive cash flow will partially go to the treasury and partially be burned in the future, increasing the token price.