BJK ETF: Question & Answer
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With the expansion of online gaming in the U.S., the next 10 years will likely be much different than the past decade, and a post-pandemic reopening could bring a surge in traffic to brick-and-mortar casinos. Given the increasing popularity, there are many new areas of opportunity within the gaming industry. This blog focuses specifically on gaming services and is intended to answer frequently asked questions on VanEck’s Gaming ETF (BJK).
- Why is mobile sports betting such a popular theme in the United States?
- What is the market value of sports betting in the United States and around the world?
- How is the sports betting rollout going in the U.S.?
- What are some sports betting terms that investors should know?
- Why is exposure to China/Macau so important within the betting industry? Why have it in your portfolio?
- Why are there real estate companies in the index?
- How can investors buy VanEck ETFs?
Gaming companies available to investors: Casinos, Hotels, Sports Betting Operators, lottery services, and More.
MVIS Global Gaming Index is composed of a variety of companies operating within the broader gaming industry. These companies may include casinos, casino hotels, sports betting operators, lottery services, and other companies which provide gaming technology or equipment. The index also includes real estate companies that are integrated or otherwise highly dependent upon brick and mortar casinos. We believe that the inclusion of these real estate companies provides a more comprehensive exposure to the gaming economy.
Why is mobile sports betting such a popular theme in the United States?
Since the Supreme Court struck down a federal ban on sports betting in 2018, states can now legalize sports betting if they choose. To date, 30 states have already done so, and many will profit from this newly legal industry. With more states seeking legalization and with the proliferation of digitized sports betting, the number of online gamblers in the U.S. has grown considerably.
Here are some quick sports betting takeaways:
- Approximately 45% of sports betting now takes place online.1
- Online gaming provides convenience and privacy compared to in-person betting.
- Aggressive marketing and advertising promotions make it easy for companies to acquire new users.
- Increased consumer spending is driving a new brick-and-mortar record.
- Young people have higher rates of gaming with mobile betting compared with in-person betting.2
What is the market value of sports betting in the United States and around the world?
According to the American Gaming Association, the market for legalized sports betting in the U.S. accelerated in 2021 as Americans wagered a record $57.22 billion with commercial sportsbooks, a 164.8 percent increase from 2020. A large part of the increase in sports betting activity was due to the market launch in seven new commercial markets, as well as four tribal-only sports betting states.
Additional market expansion across the United States also led to record annual wagering in 17 of 18 existing markets, including a steep surge in Michigan following the addition of legal, mobile wagering options. In 2021, ten out of the thirty states where gambling is allowed witnessed record quarterly revenues in the third quarter by already surpassing the $1B wager mark.3 All major commercial casino gaming markets saw revenue growth over the previous year.
Analysts expect the global sports betting market to grow to $134 billion from 2020-2024.4
U.S. Commercial Sports Betting Revenue ($M)
Source: American Gaming Association. Data as of December 31, 2021. Past performance is no guarantee of future results.
December revenue for Arizona had not been reported at the time of publication.
How is the sports betting rollout going in the U.S.?
The availability of legal online sportsbooks and brick-and-mortar lounges is rapidly increasing in the United States. Las Vegas has long been known as the sports betting mecca in the U.S., but New Jersey has recently taken over as the leading sports betting state on handle. Illinois and Pennsylvania are on the rise as well, and now approximately 30 states permit at least one form of legal sports betting since the Supreme Court struck down the federal ban on sports wagering in May 2018. Additionally, popular iGaming companies such as DraftKings, FanDuel, BetMGM are helping with the sports betting rollout and have been an important medium for gamers to connect and game in the U.S.
Legal Sports Betting in the U.S.
Source: American Gaming Association. Data as of February 17, 2022. Past performance is no guarantee of future results.
| Top 5 Gaming states by Revenue | ||||
| Jurisdiction | Handle | Revenue | Hold | Taxes/Jurisdiction Revenue |
| New Jersey | $ 24,131,937,892.00 | $ 1,668,096,324.00 | 6.9% | $ 210,153,015.00 |
| Nevada | $ 20,824,527,904.00 | $ 1,231,454,000.00 | 5.9% | $ 83,123,145.00 |
| Pennsylvania | $ 12,434,451,170.00 | $ 943,078,638.00 | 7.6% | $ 230,069,053.00 |
| Illinois | $ 8,904,382,817.00 | $ 653,118,374.00 | 7.3% | $ 104,030,749.00 |
| Indiana | $ 6,534,819,886.00 | $ 521,621,230.00 | 8.0% | $ 49,554,020.00 |
Visit the fund page for the fact sheet, holdings, performance and more.
What are some sports betting terms that investors should know?
- Handle: Amount wagered over the time period.
- Revenue: Amount of money kept by sportsbooks out of the amount wagered.
- Hold %: How much revenue sportsbooks keep as a function of handle.
- Taxes/state revenue: Taxes collected by state and local jurisdictions; or state share of proceeds in revenue-sharing markets.
Source: American Gaming Association. Data as of February 17, 2022. Past performance is no guarantee of future results.
Why is exposure to China/Macau so important within the betting industry? Why have it in your portfolio?
Macau is the largest gambling hub in the world in terms of money wagered, despite visitation levels remaining below pre-pandemic level. In 2021, Macau casino performance was better in comparison to 2020, but still well below the pre-pandemic level. In 2021, Macau’s gross gaming revenue totaled approximately $11 Billion, up nearly 43% YoY. However, the 2021 annual figure is still 70% below the pre-pandemic figure.5
Although coronavirus-induced uncertainty looms over Macau’s gaming industry, the government’s proposed new amendments regarding gaming concession renewals have provided some breathing space. A recent announcement removes the apprehension regarding the potential dilution of existing casino operators in the region. The new rules are subject to approval by the Macau legislature. The number of casino operators allowed to operate in Macau has been limited to six concessions ad acknowledges local ownership of casinos to 15% from 10% earlier.
Macau companies have been focusing on providing services and staffing levels with selective amenities and enhanced safety and social distancing protocols on the gaming floor to help welcome new gamers.
Why are there real estate companies in the index?
Approximately 9% of the MVIS Global Gaming Index is comprised of real estate investment REITs (real estate investment trusts). Companies like Gaming and Leisure Properties (3.17% as of 1/31/2022), MGM Growth Properties (1.95% as of 1/31/2022), and VICI Properties (4.26% as of 1/31/2022) are capital-intensive businesses, whose long-term growth ultimately depends on generating income from real estate investments.
These companies are tied to the gaming industry due to their investments in casino properties and hotels located in casino areas. These companies may also be poised for further growth, given a strong rebound across the casino industry during the Covid pandemic.
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Disclosures:
1 Source: Forbes Technology Council. Data as of February 25, 2021.
2 Source: Goldman Sachs Research. Data as of October 17, 2021.
3 Source: American Gaming Association. Data as of February 15, 2022.
4 Source: Technavio Research. Data as of June 06, 2021.
5 Source: Zacks Investment Research. Data as of January 25, 2022.
This is not an offer to buy or sell, or a recommendation to buy or sell any of the securities mentioned herein. The information presented does not involve the rendering of personalized investment, financial, legal, or tax advice. Certain statements contained herein may constitute projections, forecasts and other forward looking statements, which do not reflect actual results, are valid as of the date of this communication and subject to change without notice. Information provided by third party sources are believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. The information herein represents the opinion of the author(s), but not necessarily those of VanEck.
An investment in the VanEck Vectors® Gaming ETF (BJK®) may be subject to risks which include, among others, investing in the gaming industry, equity securities, consumer discretionary sector, foreign securities, emerging market issuers, foreign currency, special risk considerations of investing in Asian and Chinese issuers, depositary receipts, small- and medium-capitalization companies, cash transactions, market, operational, index tracking, authorized participant concentration, no guarantee of active trading market, trading issues, passive management, fund shares trading, premium/discount risk and liquidity of fund shares, non-diversified, and concentration risks, all of which may adversely affect the Fund. Foreign investments are subject to risks, which include changes in economic and political conditions, foreign currency fluctuations, changes in foreign regulations, and changes in currency exchange rates which may negatively impact the Fund's returns. Small- and medium-capitalization companies may be subject to elevated risks.
Investing involves substantial risk and high volatility, including possible loss of principal. An investor should consider the investment objective, risks, charges and expenses of a Fund carefully before investing. To obtain a prospectus and summary prospectus, which contain this and other information, call 800.826.2333 or visit vaneck.com. Please read the prospectus and summary prospectus carefully before investing.
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Disclosures:
1 Source: Forbes Technology Council. Data as of February 25, 2021.
2 Source: Goldman Sachs Research. Data as of October 17, 2021.
3 Source: American Gaming Association. Data as of February 15, 2022.
4 Source: Technavio Research. Data as of June 06, 2021.
5 Source: Zacks Investment Research. Data as of January 25, 2022.
This is not an offer to buy or sell, or a recommendation to buy or sell any of the securities mentioned herein. The information presented does not involve the rendering of personalized investment, financial, legal, or tax advice. Certain statements contained herein may constitute projections, forecasts and other forward looking statements, which do not reflect actual results, are valid as of the date of this communication and subject to change without notice. Information provided by third party sources are believed to be reliable and have not been independently verified for accuracy or completeness and cannot be guaranteed. The information herein represents the opinion of the author(s), but not necessarily those of VanEck.
An investment in the VanEck Vectors® Gaming ETF (BJK®) may be subject to risks which include, among others, investing in the gaming industry, equity securities, consumer discretionary sector, foreign securities, emerging market issuers, foreign currency, special risk considerations of investing in Asian and Chinese issuers, depositary receipts, small- and medium-capitalization companies, cash transactions, market, operational, index tracking, authorized participant concentration, no guarantee of active trading market, trading issues, passive management, fund shares trading, premium/discount risk and liquidity of fund shares, non-diversified, and concentration risks, all of which may adversely affect the Fund. Foreign investments are subject to risks, which include changes in economic and political conditions, foreign currency fluctuations, changes in foreign regulations, and changes in currency exchange rates which may negatively impact the Fund's returns. Small- and medium-capitalization companies may be subject to elevated risks.
Investing involves substantial risk and high volatility, including possible loss of principal. An investor should consider the investment objective, risks, charges and expenses of a Fund carefully before investing. To obtain a prospectus and summary prospectus, which contain this and other information, call 800.826.2333 or visit vaneck.com. Please read the prospectus and summary prospectus carefully before investing.