BlueBet Secures First US Sports Betting Licence
Australian bookmaker BlueBet has secured its first gambling licence in the United States. The US sports betting market is expanding at an alarming rate, and BlueBet is now in a position to take full advantage.
BlueBet launched six years ago and is still a relatively small player in the Australian gambling sector. Latest figures show BlueBet enjoys a mere 1.5 per cent market share. Compare that figure to the 57% revenue market share enjoyed by Tabcorp, and you see BlueBet has a long way to go before it becomes a major player.
Former Sportingbet supremo Michael Sullivan founded BlueBet six years ago. Sullivan’s guidance has helped BlueBet come from nowhere to the point of listing on the ASX. BlueBet is expected to list on the Australian Stock Exchange on July 2. Sullivan hopes to raise $80 million through the IPO, selling shares at $1.14 each. This values BlueBet in the region of $220 million.
Sullivan has worked wonders in what is a very competitive market. BlueBet is profitably run despite its infancy, and Sullivan wants a five per cent market share in the next four years. It has the chance to make vast sums of money in the expanding US market.
Why BlueBet Wants A Foot in the American Door
The US sports betting market is growing exponentially, thanks to the 2018 Supreme Court ruling. Congress passed the Professional and Amateur Sports Protection Act in 1992. The act prohibited state-sanctioned sports betting. As a result, almost all US states were not allowed to sponsor, operate, advertise, or promote sports betting. The act permitted these activities in Delaware, Montana, Nevada, and Oregon only.
New Jersey fought, initially unsuccessfully, to be included in the states allowed to offer sports gambling. However, the Supreme Court granted powers to individual states to offer legalised sports betting in 2018.
The ruling sparked an explosion of gambling companies launching US operations. Up to US$13.5 billion is the expected value of the industry by 2025. So naturally, BlueBet wants a slice of this lucrative pie.
Massive companies, including Flutter Entertainment and Entain Plc, already have a presence in the United States. They partnered with established gambling brands and casinos. BlueBet will go down a similar route.
Sullivan has prepared for an opportunity like this for three decades.
“With American, gold rush is an understatement. They are behind by 20 years. They’ll catch up, but it’s hard. I’ve been training my people for 30 years.”
Investors Keen on ASX-Listed Companies With US Exposure
Investors are smart people who look for value in their investments. So ASX-listed companies with exposure to the lucrative US market are hot stocks.
PointsBet is another Australian bookie benefiting from having a foot on American soil. Its share price soared 560 per cent from its 2019 IPO. PointsBet has operations in New Jersey, Iowa, Illinois, Colorado and more.
Shares in BetMakers increased seven-fold in the space of 18-months. BetMakers joined forces with William Hill Global to helps its US expansion.
BlueBet’s initial opening price is $1.14 per share. Should it experience an increase similar to BetMakers, its shares will weigh in at $7.98 in the next 18-months. Any increase, however, is a bonus.
Proving Themselves on US Soil
BlueBet will form joint ventures with mid-tier casino in smaller states in the first instance. This is the path most gambling companies go down. It targets 2022 to be up and running in states such as Maryland, Tennessee, and Virginia.
Sullivan is yet to go on record about which state BlueBet is heading because the deal is not fully completed.
“We are virtually done. It’s basically a handshake over the telephone, and we’re just waiting on some legal documentation. The minute I take the first bet over there, my technology is proven, my people are proven, then I can go to these mid-tier casinos and say: I’ve got the licence, we’re betting, I want to talk to you about a joint venture.”
