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Exclusive: BETZ ETF Co-Founder Talks Sports Betting Market, DraftKings, Barstool

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Exclusive: BETZ ETF Co-Founder Talks Sports Betting Market, DraftKings, Barstool

Roundhill Investments CEO and co-founder Will Hershey joined Benzinga's "SPACs Attack" YouTube show this week to discuss the overall sports betting market.

About The BETZ ETF: Roundhill launched the Roundhill Sports Betting & iGaming ETF (NYSE: BETZ) this year to tackle the secular trends of online sports betting and iGaming.

“We’ve put together a portfolio of 30-plus names that kinda cover the gambit,” Hershey said. “Here’s the beta exposure if you want to play the theme.”

The ETF offers pure play exposure for investors who believe in the sports betting market, but don’t want to pick individual stocks themselves.

Hershey On The Sports Betting Market: Hershey said the three states passing legislation in November is a positive catalyst for the overall market.

“The catalyst in the near term is state-to-state legalization,” Hershey said.

Hershey said the economic impact of COVID-19 has also helped push the case for legalized sports betting to boost economies.

“State budget deficits bode well for cannabis legalization and sports betting and iGaming legalization.”

States are increasingly looking at the record numbers being put out in legalized markets like New Jersey, according to Hershey.

Hershey predicts New York will legalize online sports betting in 2022 or maybe 2021.

“We’re in the first or second inning of this state-by-state rollout.”

Related Link: Talking Sports Betting And Dave Portnoy With BETZ ETF Founders

Hershey On DraftKings, Penn National: Benzinga asked Hershey about former SPAC and top 2020 performer DraftKings Inc (NASDAQ: DKNG).

“DraftKings has been a tremendous performer,” Hershey said.

The Roundhill CEO said some price targets on DraftKings may be a bit ambitious.

The concern over DraftKings is their large advertising spend, with over $200 million spent in the last quarter, he said. 

Hershey said DraftKings spent more last quarter on advertising than Penn National Gaming (NASDAQ: PENN) spent to acquire its stake in Barstool Sports.

DraftKings is the best pure play sports betting stock for U.S. investors, Hershey said. 

Hershey On GAN: Benzinga asked Hershey about GAN Limited (NASDAQ: GAN), a 2020 IPO that has fallen after a strong three-month run. 

“Gan is one of those picks and shovels plays,” Hershey said, adding that investing in the company is betting on them to win new partners and new business.

GAN traded in the U.K. prior to the IPO in the U.S., and with a much lower valuation, he said. 

The acquisition of Coolbet by GAN was notable, as it changes the company’s revenue makeup split to 50% B2B and 50% direct-to-consumer, Hershey said.

The acquisition also puts GAN in direct competition with some of their clients, he said. 

The acquisition shows that GAN wants to be vertically integrated, Hershey said, adding that he questioned how they are paying for the deal — and that they may have to raise capital. 

 

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