For those who need some refreshing on what an ETF is, it stands for Exchange Traded Fund. It is a specific investment fund that trades on an exchange. It is sort of like a stock where they will be bought and sold throughout the day. Many are now beginning to tune into the online gambling and sports betting scene with how much it has taken off in 2020 and already in 2021.
The Two Main Funds
Two main funds are centered around gambling and sports betting. One is Roundhill Sports Betting and iGaming (BETZ), and the other is VanEck Vectors Gaming ETF (BJK). BETZ has some holdings from companies like DraftKings, PENN National Gaming, and PointsBet. They now have over $350 million accumulated over the last year. BJK isn’t as invested within sports betting compared to BETZ but does have Wynn Resorts under their belt, which Wynn Bet has launched this past year in the sports betting world.
Why The Record Highs?
With the Super Bowl just wrapping up from over a week ago, the NFL playoffs and lead-up to the Super Bowl brought new record highs for revenues and handles in legalized states. We saw New York post a record high in gross generated revenue for their four resorts, and that is without mobile and online sports betting. Illinois also posted record highs, and states like Tennessee have seen a very strong start since legalizing. There were over $400 million in wagered bets on the Super Bowl, and it is expected to go up in the next one.
When the Supreme Court struck down the federal ban on sports betting, it was open season for states to decide how they wanted to handle sports betting. Some were early and favored it, while others took a slower process and hammered out the details. We still see over half the country not being allowed to bet on sports, but that number is starting to dwindle. At the start of 2021, multiple states are looking to legalize sports betting, and the industry projects to hit over $2 billion in revenue this year. States are in need of some sort of revenue, especially as most are feeling the effects of a covid-19 economy.
This Is Only The Beginning
Both funds and the overall market expect massive growth over the course of 2021, but in a further out forecast, they are expecting to see 4x growth by 2025. There is a public desire for online and mobile gambling, which is the main draw of legalized sports betting. With still over half of the country not having any sort of legalization plan in place, there are already a few eyeing to get in on the market. ETF investors see a big opportunity within a new market that has gained a lot of buzz over the last few years. Some were planning ahead as daily fantasy sports were blowing up just a few years ago. Both FanDuel and DraftKings have their own respective sportsbooks that are now considered one of the best in the industry.