Why the BlueBet (ASX:BBT) share price is jumping 8% on Wednesday

This sports betting company is expanding into the US…

| More on:
A group of happy young people watching sport on a laptop celebrate, indicating a win for sports betting bluebet

Image source: Getty Images

The BlueBet Holdings Ltd (ASX: BBT) share price is charging higher on Wednesday.

In morning trade, the mobile-first sports betting company’s shares are up 8% to $1.77.

Today’s gain means the BlueBet share price is now up 55% from its 2 July IPO listing price of $1.14.

Why is the BlueBet share price charging higher?

Investors have been bidding the BlueBet share price higher today after it released a positive update on its US ambitions.

According to the release, the company has signed a skin agreement with the operator of Q Casino, Dubuque Racing Association. The skin agreement will allow BlueBet to conduct its online sportsbook operations in Iowa as an extension of Dubuque’s existing casino licence. This remains subject to the completion of regulatory approval and licensing.

The two parties have signed an initial term of five years, which will automatically renew for a further five years unless BlueBet provides notice of non-renewal by January 2026. Furthermore, as part of the agreement, BlueBet will pay to Dubuque Racing Association a portion of the Net Gaming Revenues derived from the online sportsbook operations.

Management notes that while the US market is currently smaller than Australia, it has significant growth potential. It advised that US market revenue in 2025 is forecast to grow to as much as US$13.5 billion. And, as with Australia, the online channel is set to dominate sports betting in the country.

Significant milestone

BlueBet’s Chief Executive Officer, Bill Richmond, commented: “This is a significant milestone in BlueBet’s entry to the USA market. We are taking a very considered, staged approach to market entry in the USA, and we are tremendously excited to be announcing this agreement with the Dubuque Racing Association.”

“We are initially launching a B2C business to demonstrate both the capability of our technology and our team, both of which have been honed by years of successful operation in Australia, ahead of moving to our Sportsbook-as-a-solution offering in the USA. This strategy allows us to access the tremendous USA opportunity without large ongoing capital expenditure,” he added.

Mr Richmond notes that it has a big opportunity in the Iowa market, which could bode well for the BlueBet share price in the coming years.

He explained: “Iowa is a large wagering market with huge potential, and it perfectly fits our criteria. Since sports betting was approved by the Iowa legislature in August 2019 it has grown rapidly to a US$1bn+ market in FY21, 85% of which is now placed through mobile or online. We look forward to growing our online sports book in partnership with Dubuque and expect our mobile first online offering to resonate strongly with customers who have demonstrated a strong affinity for mobile wagering.”

Should you invest $1,000 in BlueBet right now?

Before you consider BlueBet, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and BlueBet wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Gainers

A man sits at a desk with a phone in one hand, his other hand on his chin and studies a computer screen in front of him with what appears to be cryptocurrency data on both screens.
Cryptocurrencies

This is the top performing crypto in 2022 so far, and it sure isn’t Bitcoin

Bitcoin and Ethereum have both sold off heavily this year, and only a few lesser-know tokens have bucked that trend.

Read more »

Three satisfied Whitehaven coal miners with their arms crossed looking at the camera proudly
Share Gainers

3 ASX mining shares surging by more than 20% today

With commodity prices soaring, investors are keeping a close eye on mineral explorers.

Read more »

A woman gives two fist pumps with a big smile as she learns of her windfall, sitting at her desk.
Share Gainers

3 ASX All Ordinaries shares enjoying a Wednesday windfall

It's a good day to be invested in these All Ords shares.

Read more »

Green arrow going up on stock market chart, symbolising a rising share price.
Share Gainers

Why ALS, Costa, Superloop, and Worley shares are charging higher

These ASX shares are on form on Wednesday...

Read more »

Share Gainers

The Lynas share price has surged 15% in 2 weeks. What’s the deal?

Investors continue driving up the Lynas share price in May.

Read more »

A graphic showing a businessman running up a white upwards rising arrow symbolising the soaring Magellan share price today
Share Gainers

Why Allkem, NAB, Pushpay, and Virgin Money UK shares are rising

These ASX shares are pushing higher today...

Read more »

a man sits on his sofa loong at his phone and raises a fist to the air in happy celebration.
Share Gainers

The Pilbara Minerals share price has surged 15% in 2 weeks. What’s happening?

It's been a good fortnight for the ASX lithium miner...

Read more »

A group of friends party and dance in the desert with colourful confetti all around them.
Share Gainers

3 ASX microcap shares going gangbusters on Monday

Which three ASX microcap shares beat the benchmark index today?

Read more »