Will Hershey is the co-founder and current CEO of Roundhill Investments. His recent take on the US sports betting market is bullish to say the least. He is also excited by the growth potential in the coming years.
This translates to a very favorable outlook for anyone looking to invest in the legal US sports betting industry. Hershey is not alone in his recent assessment. With more and more states entering the market with some form of legal sports betting within their borders, the overall growth rate has been phenomenal.
Roundhill Investments has two ETFs related to the industry. The first is Roundhill Sports Betting & iGaming ETF. This ETF trades on the New York Stock Exchange as BETZ. Another NYSE ETF is NERD. This is the Roundhill BITKRAFT esports & Digital Entertainment ETF.
Adding esports and other entertainment venues tied to the US market, the upside is extremely high. The US market is filled with new players such as DraftKings Sportsbook and FanDuel Sportsbook along with certain established international sports betting firms such as William Hill.
Penn National Gaming was also mentioned as a US pioneer. The company’s partnership with and substantial investment in Barstool Sports is looking to create a digital-first betting platform. This has the potential to quickly drive market share for the company.
Certain estimates predict that more than half the states in the US will offer legal sports betting in some form by the end of next year. The lure of added tax dollars to address budgetary shortfalls is far too tempting for cash-strapped states.
The wide-scale acceptance of sports betting is another driving force. Land-based sportsbooks are popping up in established casinos and horse racing tracks. The growth of online sports betting is even more impressive. The majority of bets being placed today are through a mobile platform.
New Jersey sportsbooks just posted a record sports betting handle of $668 million for the month of August. This is the biggest handle ever for a single month. It broke the Nevada sportsbook’s record for November of last year.
Other states have been putting up some big numbers as well. This was ahead of the start of the 2020 NFL season. Hershey mentioned pent-up demand and easy mobile access as two reasons behind the sudden surge.
GAN Limited (NASDAQ: GAN) and Flutter Entertainment (Pink: PDYPY) were two gaming companies mentioned by name.
GAN is a third-party provider of gaming software solutions for online casinos. Flutter Entertainment is a product of the merger between Paddy Power and Betfair. More recently, the company purchased FanDuel along with Pokerstars, Sky Bet, and FOX Bet.
Hershey sees Flutter as an undervalued global player. The company offers some solid growth potential as it relates to the US market. DraftKings has gotten most of the headlines since going public in April of this year. However, FanDuel has the potential to become the US market leader.
The Roundhill Sports Betting ETF now has more than $100 million in assets. It remains the only ETF with pure sports betting exposure.