New Jersey players in ETF markets are showing unprecedented interest in backing sports betting primary funds. Following a huge interest in Super Bowl betting, sports wagering throughout the Garden State is enjoying a record run and primary funds companies are going along for the ride.
Never heard of an ETF and how it relates to sports betting? Let us explain.
For many years, mutual funds have offered professional portfolio management and convenience to investors who lack the time or means to do the study required to trade their portfolios in order to optimize their returns. As a result, in recent years, a new generation of mutual funds has popped up, offering many investors the same advantages of traditional open-ended funds. These funds, are commonly referred to as exchange-traded funds (ETFs) and they trade on public exchanges being bought and sold just as stocks can.
One of the best things about ETFs is that they are low-cost ways get become involved with passive index investing. As many sports betting industry experts have explained in the past, the growth of the nascent U.S. sports betting industry and its leading state in New Jersey is heavily rooted in estimates and expectations of an as yet history to unfold.
Those expectations and predictions are driving the increase in two ETFs in New Jersey, VanEck Vectors Gaming ETF (BJK) and Roundhill Sports Betting & iGaming (BETZ), which have both recently been registering record high after record high.
BETZ has bounced 96% since its launch last summer on the back of its high exposure to online sportsbooks in the United States and in New Jersey in particular. Leading New Jersey sportsbooks like Canada’s theScore Bet and innovative Aussie online sportsbook, PointsBet, lead the BETZ exposure to digital gaming while Penn National Gaming (Barstool Sportsbook’s major partner) and DraftKings are also heavily featured. BETZ has seen $146 million filing into its fund in 2021 and now has more than $350 million in total assets under its management since its June 2020 launch.
According to BETZ spokesperson and Roundhill’s co-founder, Tim Maloney;
“We continue to see a wide range of estimates for the ultimate size of the sports betting and iGaming opportunity in the U.S. While we’re partial (perhaps obviously) to the higher-end estimates, what this really highlights is how challenging it is to project the size of an industry that was illegal at a federal level until two years ago and is at varying stages of legalization across the 50 states.” Maloney explained.
Of course, any projections to how large the sports betting revenues may eventually become across the United States are ultimately tied to how many states eventually find for sports wagering legalization. One of the most optimistic estimates finds that be turn of the next decade in 2030, 96% of the U.S. population may have access to legal and regulated online sports betting.
BETZ CEO, Will Hershey puts it forward simply with no-nonsense language;
“Gambling is the largest form of entertainment globally. The excitement is all about the U.S. market. This is a new phenomenon in the U.S. It’s a gold rush. Sports betting, esports and entertainment are all a play for eyeballs at the end of the day,” he said.
The figures back up Hersey’s optimism. U.S. sports betting revenue is forecast to reach $2.5 billion in 2021 and projected to grow to $8 billion by 2025 and New Jersey will do a lot of the heavy lifting required to meet those forecasts.
As Hershey concludes, everybody wins;
“We expect as the U.S. market matures and more states come online…it’s going to mean more revenues for sports book operators, but maybe more importantly, it’s going to mean tax dollars for state’s legislators”.