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Want To Bet On Super Bowl Fever? Here's An Odds-On ETF

Published 02/09/2022, 05:10 AM

Non-fungible token (NFT) investors have a special reason for tuning into the Super Bowl LVI next Sunday. In September 2021, the National Football League (NFL), along with the National Football League Players Association, and crypto gaming group Dapper Labs, announced the creation of exclusive digital video highlight NFTs for NFL fans.

In a press release, the NFL explained the project:

“The all-new digital collectibles will give NFL fans the unique opportunity to collect and own NFTs featuring some of the greatest and the most talked about in-game Moments.”

The game between the Los Angeles Rams and the Cincinnati Bengals will take place at the SoFi Stadium in Los Angeles, California. The stadium is named after the financial technology (fintech) group SoFi Technologies (NASDAQ:SOFI), which paid $635 million for 20 years of naming rights.

Companies To Watch During Super Bowl

For Wall Street, professional sports are big business. For instance, betting on the Super Bowl is rising, especially as more US states legalize sports betting.

In early January, New York joined 17 other states to allow online sports wagering. Initially, the Empire State approved the operation of mobile sportsbooks to Caesars Sportsbook owned by Caesars Entertainment (NASDAQ:CZR); DraftKings (NASDAQ:DKNG); FanDuel, a subsidiary of Flutter Entertainment (OTC:PDYPY); and Rush Street Interactive (NYSE:RSI).

Meanwhile, NBC has already sold out all ad inventory, with a 30-second spot for a record $7 million, up over 25% from the past year.

Among companies expected to run commercials are Alphabet (NASDAQ:GOOGL); Anheuser Busch (NYSE:BUD); the luxury auto brand BMW (OTC:BMWYY); (NASDAQ:BKNG); General Motors (NYSE:GM); Hologic (NASDAQ:HOLX); Lay’s produced by PepsiCo (NASDAQ:PEP); (NASDAQ:MNDY); Rakuten (OTC:RKUNY); Sam’s Club, a subsidiary of Walmart (NYSE:WMT); Taco Bell, a subsidiary of Yum! Brands (NYSE:YUM); Turkish Airlines (OTC:TKHVY); and Wallbox (NYSE:WBX), among others.

In addition, crypto investors might be interested in knowing that the Singapore-headquartered cryptocurrency exchange and crypto derivatives exchange FTX will feature ads.

Finally, we have to mention that millions of Americans will spend significant amounts on food, drinks, decorations, apparel, leisure, and other purchases just before or on the day of the big sporting event. According to a National Retail Federation (NRF) survey, total consumer spending will likely exceed $14.5 billion. Thus, consumer staples and discretionary stocks, and exchange-traded funds (ETFs) will also be in the limelight.

With that information, here’s a fund that could benefit from this weekend’s Super Bowl.

Roundhill Sports Betting & iGaming ETF

  • Current Price: $22.30
  • 52-Week Range: $19.82 - $33.26
  • Expense Ratio: 0.75% per year

Currently, about 30 US states have legalized sports betting. Put another way, more than 100 million Americans today can place a legal wager in their home states.

Meanwhile, the online gambling market worldwide is anticipated to exceed $90 billion by 2023. And according to the American Gaming Association, the US gaming industry supports 1.8 million jobs. Therefore, Wall Street pays close attention to companies in this leisure segment.

Our fund, the Roundhill Sports Betting & iGaming ETF (NYSE:BETZ), invests in global businesses engaged in sports betting and iGaming sectors. The ETF started trading in June 2020.

BETZ Weekly Chart

BETZ currently holds 44 stocks, and the leading 10 names comprise about 45% of net assets of $234 million. About a third of the businesses are based in the US. Next in line are companies from Malta (15%), the United Kingdom (UK) (10%), Australia (9.5%), Sweden (7.7%) and Ireland (5.2%).

Penn National Gaming (NASDAQ:PENN), Kindred Group (ST:KINDsdb), Flutter Entertainment, Kambi Group (ST:KAMBI), DraftKings, and Pointsbet Holdings (ASX:PBH) lead the names in the portfolio. In terms of sub-segments, we see sportsbook (27.4%), followed by technology (25.9%), iGaming (24.7%), and casinos (17.6%).

BETZ saw a record high in mid-March 2021, but many names in the fund have come under pressure since then. Consequently, the ETF lost over 28% in the past 52 weeks.

Year-to-date, BETZ is down 10.9%. By comparison, the S&P 500 Casinos & Gaming Sub Industry index lost only 0.3% (or flat). Given the potential growth in the sector, long-term investors could consider buying the ETF around current levels.

Bottom Line

On Feb. 13, around 100 million Americans will watch this year’s Super Bowl game. We do not know which team will be the winner. But investors are hoping a number of companies in their portfolios will score touchdowns.

In addition to the BETZ ETF, another fund to research could be the SmartETFs Advertising & Marketing Technology ETF (NYSE:MRAD). It was launched in late December 2020 and is down over 25% in the past year. Most of this decline has come in 2022.

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