In the latest sign of enthusiasm for the next generation of gaming equities, a second sports wagering exchange traded fund (ETF) could soon come to market.
ETF Series Solutions (ESS), a multiple series trust (MST), filed plans with the Securities and Exchange Commission (SEC) for the iBet Sports Betting & Gaming ETF. The fund, assuming it comes to market, will have a fairly large selection universe.
Operating casinos or racetracks; operating an online multiplayer video game competition platform; operating a mobile sports betting platform; owning real estate primarily used for gaming activities, operating online communities for gaming; and developing educational tools for online gaming,” according to the regulatory document.
The prospectus dated Aug. 27 contains a ticker and expense ratio, indicating the ETF is close to coming to market. The fund is slated to trade on the Nasdaq using the symbol “IBET” with an annual fee of 0.79 percent, or $79 on a $10,000 investment.
Not the First Sports Betting ETF
As is the case with the iGamig and sports betting spaces, the ETF industry is intensely competitive and it’s common for issuers to mimic successful ideas.
Indeed, there is an obvious success story when it comes to sports betting ETFs. The iBet Sports Betting & Gaming ETF will compete directly with the Roundhill Sports Betting & iGaming ETF (NYSEARCA:BETZ). BETZ debuted in June 2020 and has $404 million in assets under management, making it one of the more successful ETFs that launched last year.
Few new funds in recent memory had timing as good as that enjoyed by BETZ. The Roundhill fund debuted while many land-based casinos were shuttered due to the coronavirus pandemic — a scenario that fortified the online casinos investment thesis.
Additionally, BETZ launched soon after or in advance of slew of iGaming and sports betting companies making debuts as public companies in 2020. BETZ gained acclaim and assets from investors is the only dedicated option in the space and as alternative to stock picking among gaming equities.
BETZ, IBET Big Differences
The forthcoming IBET and BETZ have some marquee differences. Notably, the new contender is an actively managed fund. Conversely, BETZ follows the Roundhill Sports Betting & iGaming Index. Active funds are usually pricier than passive rivals and that’s the case here as IBET’s annual fee will be four basis points above that of BETZ.
IBET will be advised by Inherent Wealth Fund and sub-advised by Penserra Capital Management. The new ETF will be managed by Jeffrey Kamys who has some ties to the sports gaming industry, having started a firm known as Dr. Fantasy Sports in 1996.
“Under normal circumstances, the Fund will invest at least 80% of its net assets, plus the amount of any borrowings for investment purposes, in securities of companies in the Casinos & Gaming sub-industry or companies whose primary business consists of owning, developing, or operating sports betting or gaming (including iGaming and esports) venues, software, media content, or electronic platforms,” according to the SEC filing.
The prospectus doesn’t mention specific gaming equities that could be included in the IBET lineup.
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