The unprecedented effects of a global pandemic may have led to the temporary suspension of professional sports and the closure of casinos and sportsbooks. However, 2020 has still proven to be a busy year for sports-related gaming. For VanEck, the time has proven to be valuable for their gaming ETF.
“Sports betting revenue won’t fill a giant budget gap, but it’s providing a new revenue stream for many states over the long term,” reports an article from SportsHandle. That’s a case worth making, as the means to create new revenue has taken on a lot of interesting forms for the majority of the year.
The VanEck Vectors Gaming ETF (BJK) outperformed both the S&P 500 and S&P 1500 Consumer Discretionary indices in the month of August. BJK tracks a market-cap-weighted index of global companies that generate at least 50% of revenues from gaming and related activities.
Making A Fast Recovery
As noted by VanEck, the vast majority of BJK’s constituents posted positive returns for the month, many of which were in the double digits. This is indicative of a recovery that’s starting to take place within the space as most of the top contributors were casino operators like MGM Resorts, Las Vegas Sands, Penn National, etc. There were only three companies that detracted in August, and the detraction was negligible.
With that in mind, as many constituents of BJK are still down year-to-date, the fund presents an attractive potential opportunity now. This is particularly because China has resumed providing visas for Macau, a significant gaming center. This is an example of how sports are back pretty much everywhere in the world.
Additionally, casinos have started reopening with restrictions. However, most casinos and similar gaming establishments in the US are open (879 open vs. 114 closed). At the same time, more and more states are pushing to legalize sports betting, which would benefit several constituents like DraftKings, Penn, and Flutter Entertainment.
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