Is The Super Bowl a Big Deal For The Gambling ETF?
In case you did not know, the San Francisco 49ers and the Baltimore Raves are set to tussle for NFL supremacy Sunday in the latest rendition of the Super Bowl.
The Super Bowl, America's most popular individual sporting event, is also the most heavily wagered on sporting event in this country.
The NCAA men's basketball tournament, also known as March Madness, is close to the Super Bowl in terms of dollars wagered, but the comparison is apples-to-oranges. The Super Bowl is one game while March Madness involves nearly 70 contests.
Investors that do not want to bet may still be thinking of ways to profit from the Super Bowl and that means evaluating the dominant gambling ETF, the Market Vectors Gaming ETF (NYSE: BJK).
BJK debuted in January 2008 so Sunday's game will be the sixth Super Bowl the ETF has been around for. That gives investors a decent track record with which to work to see if the big game has any significant impact on BJK.
Here is BJK's post-Super Bowl history:
Super Bowl XLII On February 3, 2008, the New York Giants upset the New England Patriots 17-14. The next day, BJK closed at $42.40. The ETF traded sideways for most of the remainder of that February before starting to tumble noticeably in March 2008. In defense of BJK, this may not be the most fair comparison because those were not the best of days for the broader market.
Super Bowl XLIII On February 1, 2009, the Pittsburgh Steelers beat the Arizona Cardinals in thrilling fashion. BJK traded around $15.40 the next day and was flirting with $16 a week later, but the fund would ultimately for the next few weeks after that until the broader market bottomed on March 9, 2009.
Super Bowl XLIV On February 7, 2010, the New Orleans Saints beat the Indianapolis Colts by two touchdowns. BJK closed around $23.50 the next day. Over the next month, the ETF surged 6.3 percent.
Super Bowl XLV On February 6, 2011, the Green Bay Packers beat the Steelers in another close affair, 31-25. BJK was found in the $32.55 area the next day, but a month later, the ETF had lost about three percent.
Super XLVI On February 5, 2012, the Giants beat the Patriots in another nail-biter, 21-17. BJK traded around $33.80 the next day and would gain about $1 over the next three weeks before falling below its pre-Super Bowl price in early March.
Takeaways: There are no noteworthy post-Super Bowl trends with BJK to this point, though in a pinch, it could be said that the ETF performs better following an NFC team winning the game. BJK's worst post-Super Bowl performance came after the Steelers won in 2009. If there is anything to that, BJK bulls will want to root for the 49ers on Sunday.
Although the ETF is home to stocks such as Las Vegas Sands (NYSE: LVS), Wynn (NASDAQ: WYNN) and MGM Resorts (NYSE: MGM), legal wagering on the Super Bowl is not a huge money maker for casinos. Some experts expect $95 million in Super Bowl bets at Nevada casinos this year. The vast majority of Super Bowl betting is of the not-so-legal variety, indicating that BJK would really benefit from the U.S. legalizing sports gambling in all 50 states, but that is a story for another day.
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