ETF overview: Take a chance on sports betting and iGaming

10/04/2021 | 11:51am

Increasingly criticized for its offensive marketing and the addiction it creates, the online betting and gambling industry remains very interesting from an investor's perspective. The sector has been growing strongly for several years and, according to several studies, will continue to do so for a few years. So, since a good investor always stays on top of trends, let's take a look at this industry and how to get exposure to it.

Why invest in the online gaming industry?

As previously mentioned, this is first and foremost a market that has been growing exponentially for the past few years. Since its launch in June 2020, the Solactive Fischer Sports Betting and iGaming Index has offered a performance of +130.27% as of October 4, 2021, the date of writing this article.

Coming back to the sports betting market, the market is currently worth $9.5 billion. Morgan Stanley predicts that by 2025, it could reach $15 billion. Goldman Sachs also forecasts strong growth in the sports betting industry, which could reach $53 billion by 2033. Globally, the industry is expected to grow at 11% per year over the next five years, according to H2 Capital. In short, studies differ on the numbers, but all point to strong growth.

In addition to the regulatory environment, growth is also driven by an increasing social acceptance of sports betting as an entertainment activity. Support from sports leagues, teams and media companies, as well as technological improvements, are also contributing.

Finally, as Luke Lloyd, Wealth Advisor and Investment Strategist at Strategic Wealth Partners explains, "Every play and move in sports has an outcome we can bet on [...]. Sports betting allows people to get more involved in the game, more specifically in each game, which generally makes it more fun and entertaining to watch."

How to simply invest in this industry?

The Solactive Fischer Sports Betting and iGaming Index focuses on companies that derive significant revenues from sports betting and iGaming (poker and online casinos). The index does not only contain companies with well-known brands and platforms such as Unibet, XXX or XXX. The exposure of the index is much broader and includes, in addition to B2C platforms, service providers that provide companies with infrastructure such as technology platforms or player account management systems. Finally, sports data providers, media and affiliate marketing companies are also included in the Solactive index.

Fischer Sports Betting & iGaming UCITS ETF - Acc (+27.70 YTD)

Information:

Ticker: BETS ISIN: IE00BNTVVW33 Price: 6.5620€ Expense Ratio: 0.69% Currency: EUR/USD/GBP Distribution Policy: Accumulation Reset Frequency: Semi-annual Assets under Management: $3,838,700.67

Objective:

The HanETF Fischer Sports Betting & iGaming ETF seeks to replicate the Solactive Fischer Sports Betting and iGaming Index. The companies in the index have a capitalization of at least USD 100,000,000. The average daily traded value must be at least USD 250,000 over the last three months, in order to guarantee a good liquidation. Excluded from the index are Chinese stocks and companies that generate more than 50% of their revenues from horse racing and lottery. Finally, the maximum weighting per line is 8% for Pure Players and 5% for Non-Pure Players.

Main Positions:

Entain Plc - 9.31% Draftkings Inc - 8.56% Flutter Entertainment Plc - 7.75% Evolution Gaming Group SEK 0.03 - 6.72% Scientific Games USD 0.001 - 5.71% Caesars Entertainment Inc - 5.4% MGM resorts International - 5.32% Churchill Downs USD NPV - 5.2% BOYD GAMING CORP - 4.69% PENN NATIONAL GAMING INC - 4.62%

Geographic Exposure :

United States - 54.94% United Kingdom - 16.41% Others - 11.78% Sweden - 8.48% Malta - 7.05% Australia - 1.33

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