Sports betting stocks get back in the saddle as BlueBet targets Arizona licence
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It was a good morning for ASX sports betting stocks, as investors assess the lay of the US land where gambling legalisation rules continue to roll out state-by-state.
Recent ASX debutante BlueBet Holdings (ASX:BBT) jumped out of the gate with a gain of more than 10% before easing back slightly, after announcing a new licensing application deal in Arizona.
The company said its subsidiary BlueBet Arizona has signed an exclusive licensing deal with BlueWater Resort & Casino — a wholly-owned subsidiary of the Colorado River Indian Tribes (CRIT).
Through BlueWater’s presence and relevant licensing in the Arizona market, the companies will jointly pursue a sports betting licence in the state.
“The licence application has been submitted and notification is expected if we are successful within four weeks,” BlueBet said.
Online sports betting was officially legalised in Arizona in April, and BlueBet said the state is on track to give the betting all-clear by the time the NFL season kicks off in September.
Under the terms of the deal, the partners would offer an online sports book for the Arizona market which will be designed using BlueBet technology and offered through the company’s mobile app.
The agreement will be for 10 years, and BlueBet will pay CRIT a market access fee and a portion of net gaming revenues derived from operations.
Specific terms of the access fee and revenue-sharing deal weren’t disclosed.
BlueBet will also incur licensing and regulatory costs as part of the operation of the sports book, and make an annual donation to a community organisation associated with CRIT.
Commenting on the deal, BlueBet CEO Bill Richmond said the company hadn’t originally targeted Arizona as part of its early US rollout strategy.
However, the company is looking to stay agile as it tries to take advantage of its IP developed in Australia’s more mature online sports betting markets, for “greenfields” US states that have only just approved the practice.
Last month, the company signed its first ‘skin’ agreement with the Dubuque Racing Association in the smaller US state of Iowa.
Like the Arizona deal, the skin agreement is where BlueBet leverages the existing operating licences of an incumbent player to apply for an online sports book licence.
“Arizona’s population is twice that of Iowa, where we have our first US skin and where the sports betting market is estimated to have gaming revenue worth more than a billion US dollars per year, so this agreement represents a significant escalation in our push into the US,” Richmond said.
Elsewhere, fellow ASX sports betting stock PointsBet Holdings (ASX:PBH) also performed well in morning trade, with a gain of more than 5% to $10.77.
Earlier this month, the company completed a fully-underwritten $81m capital raising at $8 per share. PBH shares peaked above $16 in February this year.