The Roundhill Sports Betting & iGaming ETF (BETZ) debuted in early June and is already one of this year’s most successful new thematic ETFs. That success could continue with Major League Baseball (MLB) back and more “normal” sports soon returning.
BETZ is designed to offer retail and institutional investors exposure to sports betting and iGaming industries by providing investment results that closely correspond, before fees and expenses, to the performance of the Roundhill Sports Betting & iGaming Index (“BETZ Index”).
MLB returned last Thursday and there already signs some BETZ components are benefiting.
“Sports betting sites in New Jersey were aggressive in offering attractive odds to bettors on the opening games for Major League Baseball on Thursday, according to an analysis by Morgan Stanley analyst Tom Allen,” reports Andrew Bary for Barron’s.
Betting on BETZ
BETZ is a play on disruptive technologies being applied to an old industry. The old guard casino business is being disrupted by technology, but many related investments don’t adequately capitalize on that trend.
The ETF includes (i) companies that operate in-person and/or online sportsbooks (ii) companies that operate online/internet gambling platforms and (iii) companies that provide infrastructure or technology to such companies in (i) or (ii). Boosting the near-term case for BETZ is pent up demand among bettors to have action on regular, American sports.
“A spokesman for DraftKings (DNKN) said the number of bets on Thursday night’s game between the New York Yankees and Washington Nationals was the highest for a baseball game in the history of DraftKings Sportsbook. The previous record was the seventh game of last year’s World Series, between the Nationals and the Houston Astros,” according to Barron’s.
DraftKings, which went public in April, is a top 10 holding in BETZ.
iGaming and sports wagering are in the early innings of growth, and as such, there will be some bumps in the road. Estimates run as high as $20 billion apiece for the respective market sizes of online casinos and sports betting over the next several years, assuming more than 30 states come online.
“Baseball is the first of the major professional team sports to begin to play with the NBA and NHL due to resume in about a week,” according to Barron’s.
The return of the NBA, in particular, could be beneficial to BETZ because, in the U.S., basketball is the second-most wagered on the sport after football.