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Sharplink, Inc. (SBET)

Sharplink, Inc. (Nasdaq: SBET) operates at the intersection of performance-based marketing and regulated gambling. The company’s core business is acquiring customers on behalf of sportsbooks and online casinos through its affiliate network, PAS.net, earning commission-based revenue whenever a referred player makes a deposit or generates action. A relative newcomer to public markets, Sharplink also holds a secondary cryptocurrency-staking operation. The company’s evolution reflects both the boom in U.S. sports betting legalisation and the speculative appetite for companies with exposure to digital assets.

The history of PAS.net stretches back to 1995, when it began as a digital affiliate network matching online gamblers with gaming operators. For more than two decades, it operated in the largely unregulated grey market of global iGaming, building traffic-generation expertise and publisher relationships across Europe, Latin America, and other regions. The network accumulated operational know-how—how to identify valuable players, optimize conversion funnels, and manage relationships with both affiliates and operator partners. It also won industry recognition, earning repeated awards as Europe’s top affiliate platform and programme.

That long history gave PAS.net deep credibility within the iGaming world, but it also tied the business to an uneven legal landscape. When U.S. states began legalising sports betting and online casino gaming in the late 2010s, a regulatory-compliant vehicle was needed. Sharplink Gaming, Inc. was incorporated in 2019 specifically to capture the U.S. opportunity with clean corporate governance and compliant operations.

The U.S. market opportunity and competitive positioning

Sharplink’s incorporation in 2019 was precisely timed. By then, New Jersey, Pennsylvania, and other states had opened their online gaming markets, creating a wave of new sportsbook and online casino licences. Each of these operators faced the same fundamental problem: how to acquire players efficiently without large marketing budgets or established customer bases. That problem is where Sharplink excels.

The company operates a network of state-specific websites and digital properties that funnel players to licensed operators, generating revenue through cost-per-acquisition deals or revenue-share arrangements. When a player signs up through a Sharplink affiliate and deposits money, Sharplink earns a commission. This model appeals to operators because it is performance-based—they only pay when a real, paying customer arrives. It appeals to Sharplink because the business scales with a relatively lean cost structure compared to traditional advertising.

The competitive landscape includes other affiliate networks and direct marketing players, but Sharplink claims an advantage through scale (PAS.net’s two-decade operating history), specialisation (it focuses on regulated markets rather than grey-market or unregulated operators), and a portfolio of branded properties rather than just a platform. Operators have many affiliate options, so Sharplink’s survival depends on proving that its players are genuine, retain longer, and deposit more than the average referred customer.

The divergence: From pure affiliate to diversified speculation

By the early 2020s, Sharplink faced a strategic question common to many specialised marketing firms: could affiliate commissions alone justify the company’s valuation? The sports-betting market boomed in 2021 and 2022, but competition intensified as established marketing firms and sportsbooks’ own direct advertising crowded the channel. Operator margins compressed, which meant smaller commissions for affiliates. To that backdrop, Sharplink announced a second business segment: cryptocurrency staking.

In 2022 and 2023, the company began holding Ethereum and participating in Ethereum’s staking protocol, earning yield on its treasury. This move was somewhat jarring—it shifted the company’s identity from a narrowly focused marketing business to something closer to a holding company with dual exposure: performance-dependent marketing revenue and speculative cryptocurrency holdings. The staking segment may be profitable in high-yield environments, but it also exposes shareholders to cryptocurrency volatility and regulatory uncertainty around digital assets.

The aftermath of the 2024 restructuring

In 2024, Sharplink undertook significant changes. The company sold off its fantasy sports and sports-game development business units, narrowing its focus back toward the core affiliate and staking operations. This retreat from product development suggested that management concluded the company was not positioned to compete against established fantasy-sports providers and game studios. Sharplink’s edge lies in traffic generation and relationships with operators, not in building consumer entertainment products.

The 2024 actions also saw the company optimise its cost structure and double down on the affiliate segment’s fundamentals: driving qualified traffic to sportsbooks and casinos, optimising player quality, and expanding into new regulated markets as states and countries open their gaming sectors. This is a return to focus after a period of diversification that some investors saw as distraction.

Sharplink faces two distinct competitive battles. In affiliate marketing, it competes against other networks, media buyers, and the in-house marketing teams of sportsbooks themselves. Larger sportsbooks like DraftKings and FanDuel have spent billions on brand advertising; they have less need for Sharplink. Smaller operators and newer market entrants are Sharplink’s real customers, and as markets mature, those operators consolidate and require fewer affiliates.

In cryptocurrency staking, Sharplink is a marginal player. It holds digital assets rather than running a protocol or managing institutional capital like larger staking services. The staking segment appears to be a treasury allocation rather than a core business; if crypto markets turn, it becomes a significant drag on the stock price.

Sharplink’s 10-K (SEC CIK 0001981535) breaks out the affiliate segment’s revenue and the staking segment’s holdings and yields. Watch the affiliate-segment revenue closely—that is where the real business lives. Monitor the number of active operators Sharplink partners with and the average revenue per operator; a shrinking operator base or declining commission rates signal structural weakness. The company’s cryptocurrency treasury is a matter of financial engineering, not operational strength. Quarterly calls reveal management’s thinking on market expansion, operator mix, and the company’s ability to compete as the sports-betting market matures and consolidates. For an affiliate-marketing company, retention of operator relationships and quality of referred players are more meaningful than headline revenue growth.