Investors looking for access to the online betting and gaming industry have a new option thanks to a new sector-specific ETF.
The so-called Roundhill Sports Betting & iGaming ETF ($BETZ) launched last Thursday on the New York Stock Exchange. More than $17 million was poured into the ETF on its opening day, according to Bloomberg.
Bloomberg senior ETF analyst Eric Balchunas said that figure was likely a record opening for an independent or themed ETF.
Then on Friday, the ETF was the most-added asset among Robin Hood traders.
What’s in $BETZ stock fund?
$BETZ currently includes 30 companies. The top 10 by weight are as follows:
Weight Name Ticker Thematic Relevance Country 7.02% DRAFTKINGS INC DKNG Sportsbook United States 6.53% FLUTTER ENTERTAINMENT PLC FLTR LN Sportsbook Ireland 5.79% GAN LTD GAN Technology Britain 5.36% POINTSBET HOLDINGS PTY LTD PBH AU Sportsbook Australia 4.78% KAMBI GROUP PLC KAMBI SS Technology Malta 4.57% BETMAKERS TECHONOLGY GROUP LTD BET AU Technology Australia 4.45% WILLIAM HILL PLC WMH LN Sportsbook Britain 4.16% PENN NATIONAL GAMING INC PENN Casinos United States 4.12% KINDRED GROUP PLC KINDSDB SS Sportsbook Malta 3.76% GVC HOLDINGS PLC GVC LN Sportsbook Isle Of Man
Holdings are fairly equally split between large-cap, mid-cap and small cap, with US companies making up 28% of the ETF.
US investors are hungry for sports betting
The sports betting sector is growing increasingly popular among US investors. On June 1, DraftKings was the most added stock among Robin Hood users.
Around 80% of the company’s shares are now held by non-institutional investors, helping it to a lofty $13 billion market cap.
GAN too recently enjoyed a very successful US IPO.
“There’s a ton of pent up demand for exposure to sports betting,” Roundhill CEO Will Hershey told LSR. “And because the ETF is listed on the New York Stock Exchange, it’s an interesting way for US investors to get exposure to companies listed in the UK and Europe. You saw with GAN how much demand there was for that.”
Online gambling ready to explode?
Roundhill charges an annual 0.75% fee on investments. The New York firm previously launched an esports-focused ETF (NERD) that is up 28% since its inception a year ago.
“We try and find secular trends in technology that appeal to a younger investor base,” Hershey said. “Timing-wise, it’s good and bad with the crazy run-ups going on. We think actually this is an opportunity for anyone who missed the run-up in DraftKings to buy into a diversified basket with exposure to the betting and gaming industry.”
Roundhill noted in the ETF prospectus that the global gaming market recorded gross gaming revenues (GGR) of $449 billion in 2018. And online was a growing part of that, up to 11.3% in 2018 and rising quickly.
ETFs also on the rise
ETFs are also an increasingly popular option for US investors.
Year to date, net cash flows for ETFs are near $188 billion, according to Douglas Yones, head of exchange-traded products at the New York Stock Exchange.
An ETF tracking US airliners called $JETS for example has seen 66 straight days of inflows, despite wider economic turbulence.