On Thursday, Roundhill launched an ETF to focus on the online sports betting industry. The Roundhill Sports Betting & iGaming ETF (BETZ) is the first ETF of it’s kind tracking the performance of the gaming industry.
30 companies make up the ETF. 41 percent of the companies are sportsbook operators, over 25 percent of them are tech companies, purveyors of iGaming make up 16.3 percent, and traditional casinos are 17 percent.
The ETF isn’t the first of it’s kind for Roundhill. Last year, they launched the Roundhill BITKRAFT Esports & Digital Entertainment ETF (NERD). The Egames ETF is up 28.5 percent since it’s launch.
Some of the biggest names in the gaming industry are in the newly launched BETZ ETF. First, no company holds more than seven percent of the weight.
DraftKings and Flutter Entertainment hold the most weight at 6.92 percent and 6.37 percent, respectively. Right now, DraftKings is leading the way in the U.S. sports gaming industry as they operate in seven states. Flutter Entertainment, the parent company of FanDuel and FOXBet, is a decent number two in BETZ.
Gan LTD, Kambi Group PLC, and Betmakers Technology Group LTD are the three most significant tech stocks in the ETF. Tech companies that have a strong presence in the gaming industry are apart of the ETF. The three most prominent tech companies hold 15.3 percent of the weight.
Penn National Gaming is the biggest casino in BETZ. The casino holds 4.64 percent of the weight in the ETF. Penn National Gaming partnered with Barstool Sports back in March, and their stock has rebounded from the COVID-19 dip.
Pointsbet, William Hill, Kindred Group, and Bet-At-Home round out the top-10 companies in BETZ. All four are sportsbooks, and hold 17.27 percent of the weight in the ETF. The top-10 companies hold just over 50 percent of the wight in the ETF.
With the success of Roundhill’s NERD ETF, BETZ has the potential to give investors the same returns as the sports betting industry grows.
Growth in the Industry
Roundhill now has two ETF’s in emerging markets. NERD and BETZ could be the leading ETF’s in the Esports and sports gaming industries.
Right now, projected growth in sports betting is in the billions. Some analysts are projecting the industry to be worth $7-8 billion by 2025. Roundhill stated, “Goldman Sachs expects the online sports betting market to grow 7.1% per annum from 2018 to 2022.”
More ETFs focusing on the sports betting industry will emerge. BETZ is the first of it’s kind. 18 states, along with Washington D.C., have legalized sports betting. Virginia, North Carolina, and Tennesse will all launch by the end of 2020.
With more states legalizing sports betting, the industry is going to grow naturally. Investors getting in on the ground floor are going to thrive in the gaming.
With the world slowly recovering from the coronavirus, casinos and sportsbooks will see a spike in revenue as they are slowly opening. Also, many states in the U.S. are starting to turn towards sports betting as a source of revenue.
Many states are looking at a way to reduce the budget deficit that COVID-19 has left. If states go to sports betting, then this will only increase to the industry as gaming companies, and sportsbooks take advantage.