Sportradar, Google by Sports activities Betting? Odds of successful: place your bets

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Perhaps the least known and most important potential SPAC since the second quarter of 2020 is the eagerly anticipated launch of Sportradar, arguably the most influential sports data / analytics company in the world. Signs are that the COVID-19-fueled boom in demand, coupled with tax breaks through the legalization of sports betting in key countries, could result in valuations of $ 10 billion to $ 12 billion. Indicative IPO valuations for the fourth quarter of 2020 ranged from $ 6 billion to $ 8 billion, with JP Morgan and Morgan Stanley reportedly in the mix as lead underwriters. SPAC scores were on the high end of the stated range at $ 8 billion. In 2021, market excitement for SPACs and sports betting increased the AUM $ BETZ sports betting ETF by USD 378 million + 22% and raised the valuation of Sportradar to USD 10-12 billion.

The data company Sportradar is valued at over $ 10 billion for calls to the stock market

Under the direction of Carsten Koerl, founder and CEO since it was founded in 2001, Sportradar, headquartered in St. Gallen, Switzerland, has 35 branches in 24 countries. 1,800 employees form the "hive mind" for sports data / statistics / AI. Sportradar offers 400,000 events in 60 different sports categories every year. Big data = big money. Private unicorns are notoriously shy, but we have a solid benchmark with the July 2018 sale by private equity firm EQT that owns 39% of Sportradar for an implied valuation of $ 2.4 billion to the Canada Pension Plan Investment Board (CPPIB) and the TCV growth stock fund. The founder's CEO, Mr. Koerl, did not take any proceeds and thus kept his percentage unchanged. This is a great show of confidence in the ongoing outlook for Sportradar.

Sportradar, Google by Sports Betting? Odds of winning: place your bets

Sportradar announces the Canada Pension Plan Investment Board and TCV as new strategic partners

https://www.bnnbloomberg.ca/cppib-to-bet-on-statistics-with-39-stake-in-sportradar-1.1104932

Sportradar has contracts with the NFL (no big surprise as they are partners), the NHL, MLB, FIFA, NASCAR and the NBA. NBA team owners Mark Cuban and Michael Jordan are shareholders through their participation in the $ 44 million private funding round in 2016. Ted Leonsis, CEO of Monumental Sports and Entertainment, is also a partner.

The story goes on

It is believed that Sportradar would have to raise $ 750 million to achieve a SPAC rating of over $ 10 billion. However, given the pedigree of the investor group, Sportradar could take the preliminary / simultaneous step of raising $ 2 billion through a PIPE (Private Investment in Public Equity) deal with institutional investors looking for CPPIB's lead (i.e. almost 4 bangers in 4 years at $ 936 million invested). A $ 2 billion sports radar PIPE could be bought by a group of institutional investors such as the GIC in Singapore, the Swiss National Bank, Japan's GPIF, the Australian Superfund, and any number of Canadian pension funds (CDPQ, Omers, Ontario Teacher's ) to be entitled to. Note: CPPIB has $ 360 million under management, so the Sports Radar investment is 2.6% of Assets Under Management (AUM). Having an institutional investor like the Canada Pension Plan on board is hugely positive from a review standpoint, showing that ESG exclusion (i.e., sin) screening isn't the only game in town.

The bigger risk could be that nobody is (yet) ready to sell Sportradar. At DraftKings ($ DKNG) valued at USD 24 billion, mainly at DFS (Daily Fantasy Sports), selling too early can be seen as a greater risk than rolling the dice with a higher multiple. Sportradar has a positive EBITDA and a positive cash flow. Rating agencies familiar with financial information put EBITDA at $ 59 million. No value for money, TAM, or similar poppy seed tap is required to learn about the potential rating.

Potential acquirers:

There are over 300 SPACs looking for investment prospects and the diversity of Sportradar's mandate could allow the majority to consider Sportradar "in scope". There are currently only 5 sport-related SPACs> 750 mm. A bettor would assume Chamath Palihapitiya, co-owner of Golden Sate Warriors, has a team just in case. The best adjective for Chamath (leg tag optional) is smarmy, but his money is green and he seems to have the golden touch. Softbank's Masayoshi Son has a war room where financial engineers audit their business. Softbank loves to swing for the fences, and with their stock trading at all highs and a market cap of $ 175 billion, Son-san could write a check for $ 12 billion (<7% of MKT cap) and be in Sports Radar Roll conglomerate. There was talk on the Internet about Avanti Aquisition Corp., $ AVAN, the SPAC of Egyptian billionaire Nassef Sawiris, which checks sports radar. There are literally dozen of iterations creating shareholder value, and with public market valuations currently slightly beating up private market valuations, I think the SPAC route is the most likely. In 2020, more SPAC was issued than in the previous decade under the premise of “feeding the ducks when they croak”.

Apex Predator:

Given the critical nature of Sportradar's services as sports betting loot is shifting to live betting (Sportico's sister publication Variety notes that 70% of the handle on European sports betting is live betting, up from 50% in the US) I think so Sportradar keeps "the nuts". and is more of a predator than prey. Current podcasts with Carten Koerl do not give the impression that sports radar is involved. The vertical integration of the provision of “picks and shovels” for the sports betting industry in the keeping of one's own book is a clear possibility. Keeping their best / fastest data in-house would be tantamount to sucking all of the oxygen out of their competitors' space. This is the high frequency trading equivalent of the betting world. Sports Radar> Flash Boys. Sportradar currently has 1,000 customers in 80 countries. Antitrust concerns abound. A Swiss residence helps.

Global sports betting is an industry of $ 203 billion (annual spending) in 2020. Global box office revenues were $ 42 billion prior to COVID-19.

In the post-COVID-19 world, online is the right place. There are 25 names listed in the sports betting and iGaming ETF with a market capitalization of> $ 9 billion. Brick-and-mortar land-based casinos are pale by comparison: $ MGM $ 18B, $ CZR $ 17mm, and $ WYNN $ 14mm are the big ones. They have licensing agreements with their online governors to collect some of the loot once the largest U.S. markets are approved (New York and California). States are scrambling to approve online gambling in all forms for tax revenue as they try to repair their troubled economies. NJ collected $ 302 million in taxes related to gambling / casinos in 2020, despite revenues from 15 land-based casinos falling 44% to $ 1.5 billion. The entire shortfall was made up by online betting, which doubled to $ 970 million (sports betting as a subset rose 33% to $ 398 million due to a lack of live sporting events in the first half of 2020). Traditional casinos are taxed at 8%. Online games have a tax rate of 15% (virtual slots, poker, blackjack). Sports betting is taxed at 8.5% when placed in a land-based casino and 13% when placed online.

Flat earth (sampling):

Sports betting is legal in many countries, recently in the US with state-specific approvals dating back to 2019. US soccer is number 1 and NFL bets make up 50% of all bets. Worldwide, the NFL is number 2.

Canada is expected to fully approve sports betting in the first half of 2021. With COVID-19 support hitting nearly 20% of GDP, they desperately need the tax revenue. As with cannabis legislation, this is regulated at the federal level, i. H. A draft law for a private member known as the Safe and Regulated Sports Betting Act. Bill C-218 repeals part of Canada's Criminal Code that makes betting on a single sporting event illegal. The bill was passed on the second reading in the House of Commons and will be sent for a vote in the Senate after a review by the Judiciary Committee. Hockey is big (NHL), but the NFL is bigger, even in the north!

The ticker of Score Media and Gaming Inc. $ SCR.TO has a market capitalization of C $ 2 billion.

https://finance.yahoo.com/news/statement-thescore-status-legislation-legalize-223200857.html

In India, games that are considered games of skill (i.e. poker) are allowed. Cricket is by far the most popular sport. USD 1 billion + population, mean age 27 years.

Latin America is dominated by football. Baseball # 2.

Africa is dominated by football, but 60 sports are offered. Nigeria has 60 million people aged 18 to 40 who play sports betting.

It is estimated that 96% of the world's population will have access to online betting within 5 years. This presupposes the market environment in China, which is currently changing as the “black market”. All forms of gambling with the exception of the state welfare lottery and sports lottery are illegal in China.

Horse racing dominates in Hong Kong.

Japan is said to be studying admissions, but the state lottery and horse racing currently dominate. The government is turning a blind eye to the pachinko industry (land-based pinball machines with 180 decibels, "door number 3 in hell"). Baseball is the most popular sport in Japan.

Conditions of participation: BETZ

$ BETZ Roundhill Investments ETF. The Roundhill Sportsbetting & iGaming ETF is up 21.8% in 2021. $ BETZ has been a double since inception in mid-2020. MER is a reasonable 0.75% (corresponds to Cathie Woods $ ARKK). $ BETZ AUM is currently US $ 378mm (small but with adequate liquidity). The diagram is something nice:

Sports betting

$ BETZ – holdings

ticker

Surname

Identifier

Weight

Shares

Market value

888 LN

888 PARTICIPATIONS

B0L4LM9

2.63%

2,847,673

$ 11,772,190.00

ACX GR

BET-AT-HOME.COM

B05GS53

0.43%

38,308

$ 1,937,211.00

ASPIRE SS

ASPIRE GLOBAL PLC

BF1YCK9

0.40%

246,572

$ 1,806,180.00

BALY

BALLYS CORPORATION

05875B106

2.02%

150.090

$ 9,017,407.00

BET AU

BETMAKERS TECHNOLO

BJDXBQ1

2.17%

12,578,500

$ 9,691,439.00

BETCO SS

BETTER COLLECTIVE

BFYR3S0

1.61%

275.619

$ 7,196,275.00

BET B SS

BETSSON AB

BMVT214

2.22%

1,192,881

$ 9,920,428.00

BRAG CN

BRAGG GAMING GROUP INC

BG5Q7H0

1.48%

2,781,605

$ 6,596,081.00

BYD

BOYD GAMING CORP

103304101

1.92%

162,689

$ 8,607,874.00

CHDN

CHURCHILL DOWNS INC

171484108

2.78%

56,894

$ 12,452,389.00

CTM SS

CATENA MEDIA P.L.C.

BYZYH36

1.83%

2,176,740

$ 8,193,510.00

CZR

CAESARS ENTERTAINMENT INC NEW COM

12769G100

2.74%

147.420

$ 12,259,447.00

DKNG

DRAFTKINGS INC

26142R104

4.49%

329.636

$ 20,078,128.00

DMYD

DMY TECHNOLOGY GROUP INC II

233277102

2.04%

451.152

$ 9,117,781.00

ENT LN

ENTAIN PLC

B5VQMV6

3.98%

929.508

$ 17,786,479.00

EVO SS

EVOLUTION GAMING

BJXSCH4

3.52%

120,690

$ 15,726,602.00

FDJ FP

LA FRANCAISE DES

BG0SC10

1.76%

172.215

$ 7,852,541.00

FLTR LN

FLUTTER ENTERTAINM

BWXC0Z1

3.70%

86,601

$ 16,535,014.00

GAN

GAN LTD

G3728V109

3.41%

518.284

$ 15,247,915.00

GIG NO

GAME INNOVATION

BHNZKX3

0.36%

606.976

$ 1,631,588.00

GMR LN

GAMING REALMS PLC

BBHXD54

0.45%

4,179,961

$ 2,009,146.00

GNOG

GOLDEN NUGGET ONLINE GAMIN

38113L107

2.15%

568,570

$ 9,631,575.00

GYS LN

GAMESYS GROUP PLC

BZ14BX5

1.86%

437.985

$ 8,298,146.00

IGT

INTERNATIONAL GAME TECHNOLOGY SHS USD

G4863A108

1.73%

438.260

$ 7,744,054.00

KAMBI SS

KAMBI GRP PLC

BMNQDC1

3.96%

311,414

$ 17,722,273.00

KINDSDB SS

KINDRED GROUP PLC

BYSY2K5

4.96%

1,448,530

$ 22,184,464.00

LEO SS

LEOVEGAS AB

BYY1RS3

1.92%

1,781,314

$ 8,574,061.00

MGM

MGM RESORTS INTERNATIONAL

552953101

2.15%

263,916

$ 9,611,820.00

NLAB SS

ENLABS AB

B15QQH8

1.07%

920.743

$ 4,785,768.00

OPAP GA

OPAP (ORG OF FOOTB)

7107250

1.69%

597.540

$ 7,572,419.00

PBH AU

POINTSBET HOLDINGS

BJYJ845

4.70%

1,665,497

$ 21,029,200.00

PENN

PENN NATL GAMING INC

707569109

4.81%

178,561

$ 21,489,816.00

PTEC LN

PLAYTECH PLC

B7S9G98

2.70%

1,834,719

$ 12,078,909.00

RSI

RUSH STREET INTERACTIVE INC

782011100

3.23%

730.274

$ 14,422,911.00

SCOUT SS

SCOUT GAMING GROUP

BF1PMV3

0.27%

181,801

$ 1,199,868.00

SCR CN

SCORE MEDIA AND GA COM NPV CL A SB VTG SH (R / S)

BNRMW58

3.97%

486,461

$ 17,770,159.00

SGMS

SCIENTIFIC GAMES CORP

80874P109

2.79%

264,251

$ 12,480,574.00

SKLZ

SKILLZ INC

83067L109

2.56%

317.911

$ 11,425,721.00

TAH AU

TABCORP HOLDINGS L.

6873262

3.06%

3,849,987

$ 13,666,282.00

WMH LN

WILLIAM HILL

3169889

4.10%

4,827,104

$ 18,318,102.00

Cash & other

Cash & other

0.39%

$ 1,731,555.00

All that remains is to choose the best ticker symbol. Sports Radar $ SPRR has a ring?

Review of $ BETZ and sports radar.

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Disclosure: Long Micro-Cap International Game Technologies Inc. (name change pending from i3 Interactive Inc.), $ BLITF (otc USD), $ BETS.CN (PURE, CAD).