Sports Betting ETF Co-Founder Talks SPACs, Undervalued Foreign Exchange Plays


Roundhill Investments CEO and co-founder Will Hershey joined the Benzinga YouTube show "SPACs Attack" to discuss several sports betting special purpose acquisition companies and some lesser-known sports betting pure plays that trade on foreign exchanges.

Hershey On Sports Betting SPACs: Benzinga asked Hershey about several sports betting SPACs that trade in the Roundhill Sports Betting & IGaming ETF BETZ.

Lancadia Holdings II LCA is merging with Golden Nugget Online through a SPAC. The SPAC does have some red flags, Hershey said, with the SPAC sponsor taking an existing company public and adding some debt. 

Golden Nugget Online is a pure play on online casinos, not sports betting, he said. 

“[The] ARPU for iGaming is multiples of what it is for sports betting,” Hershey said, adding that iGaming has higher margins. 

dMY Technology Group DMYT is taking Rush Street public in a SPAC deal that will bring the No. 1 iGaming player in the U.S. public, Hershey said. 

“Rush Street is really interesting,” the Roundhill CEO said. 

Rush Street has its own proprietary technology.  Unlike rivals like DraftKings Inc DKNG, Rush Street is EBITDA-positive, Hershey said, adding that Rush Street is spending minimally on advertising while also growing its user base and market share.

Hershey likes that Rush Street has a presence in both iGaming and sports betting. 

A SPAC that is owned in both the BETZ ETF and the Roundhill Esports & Digital Gaming ETF NERD is Flying Eagle Acquisition Corp FEAC, which is merging with Skillz.

Skillz has patented technology to help game developers match users in a new betting platform similar to daily fantasy sports, Hershey said. Skillz is creating a second layer of monetization for game creators. 

Skillz could be an acquisition target for a large gaming company down the road given their patent, and the key could be partnering with higher-tier games to unlock more value, the Roundhill CEO said. 

Related Link: 10 Stocks To Watch After Sports Betting Is Legalized In Louisiana, Maryland, South Dakota

Foreign Exchange Sports Bet Picks: Hershey also discussed exposure to foreign-traded sports betting stocks in the Roundhill Sports Betting & iGaming ETF.

Kambi, which trades in Sweden, is a picks-and-shovels play for the sports betting market that's similar to GAN Limited GAN, he said. 

“Kambi is a great place to start.” 


Similar to GAN, Kambi is a business-to-business provider that helps companies with back-end solutions. Kambi counts Penn National Gaming PENN and Rush Street as customers, Hershey said. Kambi is more of a pure play on the sports betting market, while GAN is focused more on the iGaming side. 

Evolution Gaming, another Swedish gaming company, is a B2B play that is pioneering the live casino segment.  

“[It's] taking streaming and introducing traditional table games,” Hershey said. 

The company will allow people to engage with real cards at traditional table games with livestreaming.

Aussie-listed PointsBet, which has a partnership with the Comcast Corporation CMCSA unit NBC Sports, is another favorite of Hershey's. 

PointsBet has “pretty unique technology,” he said. 

FanDuel is the top brand in the United States sports betting, with a market share of 46%. The company is owned by Flutter Entertainment PDYPY.  Flutter trades at lower multiples than DraftKings despite its market-leading position. 

“I think Flutter is worth a look," Hershey said

Kindred Group, which used to own Kambi and owns the popular Unibet brand, was a foreign sports betting stock brought up by a viewer of Monday’s show.

Kindred is one of the top holdings in the BETZ ETF and trades at a massive discount to its U.S. peers. Unibet is pushing into the U.S. markets, and Hershey said it represents a “compelling story.”

Kindred trades at a reasonable multiple and valuation, and the “growth kicker is the U.S. story,” he said. 

Posted In: Sector ETFsSmall CapSportsExclusivesInterviewETFsGeneralFanduelKambionline sports bettingRoundhill InvestmentsRush Street InteractiveSkillzSPACSPACsSPACs Attacksports bettingWill Hershey