Key points
-
In recent years, more ETFs have been introduced that focus on gaming stocks.
-
Here are three of the top ETFs focused on gaming and betting.
-
Is one of them a good option?
What is the best purchase?
Today, there is an exchange-traded fund (ETF) for almost everything, including the gaming and sports betting industry.
The US gaming industry has grown exponentially since the Supreme Court ruled in 2018 to allow states to authorize sports betting. That coincided with the advancement of mobile technology, making betting easier and more accessible than ever through mobile apps.
Online sports betting alone is a $14 billion industry and is expected to grow to $24 billion within five years, and that’s not counting casino games and other forms of betting.
Although it is a growing industry, in many ways it is in a nascent stage. Therefore, there are only three main ETFs that focus on sports betting, iGaming and gambling.
Pacer Bluestar Digital Entertainment ETF
The Pacer Bluestar Digital Entertainment ETF (NASDAQ: ODDS) is one of the newcomers in this space, and it has been the best performer this year, up 29% so far this year and 34% last year. anus.
This ETF tracks its own BlueStar Global Online Gambling, Video Gaming and eSports index, which includes companies that generate at least 50% of their revenue from online gambling, video game development or eSports. The rules-based strategy also requires stocks to meet certain market capitalization and trading volume criteria. The stocks in the portfolio are divided into two categories: online gambling companies and video game/eSports companies.
He currently owns around 48 shares, with Flutter Entertainment (NYSE:FLUT), which owns FanDuel, as the largest holding, followed by DraftKings (NASDAQ: DKNG) and Tencent Holdings, which is listed on the HKSE.
It launched in April 2022, so it doesn’t have a three-year track record yet, but its annualized return since inception is about 10.2%.
Roundhill Sports Betting & iGaming ETF
He Roundhill Sports Betting & iGaming ETF (NYSEARCA: BETZ) is another relative newcomer, having launched in June 2020. It has also had a good year, up about 17% so far this year and 22% over the past 12 months. It is also the largest of the three, with around $80 million in assets under management.
This ETF is passively managed, tracking the Morningstar Sports Betting & iGaming Select Index. The index is designed to provide pure exposure to online and sports betting companies, as long as they meet certain criteria. Sports betting companies must be involved in analyzing sporting events and betting on the outcome. iGaming companies must be involved in online betting on games of chance, such as poker, slots, blackjack or the lottery.
The portfolio currently holds 32 stocks, including the three largest holdings, Flutter Entertainment, DraftKings and Sportradar Group AG (NASDAQ:SRAD).
The stock has a three-year track record, during which it has posted an annualized return of -14%. Since its creation, it has had an annual return of 5.1%.
VanEck Gaming ETF
He VanEck Gaming ETF (NASDAQ: BJK) is the most established of the group, launching in 2008 as the first global gaming ETF. It has returned about 4% so far this year and 11% over the past 12 months, as of November 22.
This ETF tracks the performance of the MVIS Global Gaming Index, which includes companies involved in casinos and casino hotels, sports betting, lottery services, gaming services, gaming technology, and gaming equipment. It has around $34 million in AUM.
He owns around 35 shares with Flutter Entertainment, once again, the largest position. However, its second largest holding is Aristocrat Leisure, an Australian-based gaming machine manufacturer listed on the Australian Stock Exchange. The third largest stock is VICI Properties (NYSE: VICI), a real estate investment trust that invests in casino and gaming properties.
Over the past five years, the ETF has posted an annualized return of 3.1% and its 10-year annualized return is just 1.9%.
What is the best purchase?
If you’re looking for exposure to the gaming industry, these three fit the bill, but they all cover the industry differently.
Pacer has a major focus on sports betting, but is diversified into tangential areas of eSports and video games. Roundhill is the “purest” of all in sports betting and gambling, while Van Eck casts a wider net, including casinos, game manufacturers, lotteries and technology companies.
Where you invest depends on what you are looking for, as each has its benefits. The Pacer ETF has obviously been the best performer of the three, but it has a limited track record. Roundhill is the best choice for investors who want the most direct exposure to sports betting and online gambling stocks, while VanEck is the most diversified, but its returns have been lackluster.
When investing in industry-specific ETFs like these, it’s important to keep in mind that they should only make up a small fraction of a larger portfolio.
Source: Fx Street

I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.