Up 8%, the BlueBet (ASX:BBT) share price is booming on Tuesday. Here’s why

Shares in the betting company are surging on Tuesday morning.

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BlueBet Holdings Ltd (ASX: BBT) shares are running higher in early trade after the company announced an agreement to pursue an online sports betting licence in Arizona. At the time of writing, the BlueBet share price is up 7.61% to $2.05.

BlueBet eyes second US sports betting agreement

The BlueBet share price is off to a bumper start on Tuesday morning. This comes after the company advised it has signed an exclusive agreement with the Colorado River Indian Tribes (CRIT) and its wholly-owned subsidiary, BlueWater Resort and Casino, to pursue online sports betting market access in Arizona.

The outcome of its licence application is expected within four weeks.

According to the announcement, online sports betting in Arizona was legalised in April 2021, with an expected launch date of 9 September 9 2021.

If the licence application is successful, BlueBet will offer an online sportsbook through its mobile app and website platform.

Under the terms of the agreement, BlueBet will pay CRIT a market access fee as well as a portion of its net gaming revenues.

In addition, BlueBet will also incur any licencing and regulatory costs associated with operating the online sportsbook.

BlueBet is an emerging player in the USA sports betting scene, taking its first steps last month after signing an agreement to conduct its online sportsbook in Iowa.

The Iowa agreement on 14 July drove the BlueBet share price 5.78% higher to $1.740 on the day of the announcement.

Management commentary

BlueBet chief executive officer Bill Richmond commented on the milestone:

We’re very excited to be announcing this agreement within two months of BlueBet’s IPO. We see Arizona as a fantastic next step for BlueBet in the US. The opportunity is particularly advantageous because Arizona is such an unpenetrated market, with no existing operators despite it being a state of sports fanatics.

Richmond also highlighted Arizona as a “unique green field prospect” to drive the company’s US growth story.

Arizona’s population is twice that of Iowa, where we have our first US skin and where the sports betting market is estimated to have gaming revenue worth more than a billion US dollars¹ per year, so this agreement represents a significant escalation in our push into the US.

About the BlueBet share price

BlueBet successfully made its ASX debut on 2 July at a listing price of $1.14, closing 55% higher at $1.775.

The BlueBet share price has performed strongly on the back of the company’s US market update and recent advances in Iowa and Arizona.

The company’s shares briefly rallied to a record high of $2.63 on 26 July, 130% higher than their listing price and almost 50% higher than where they closed on their ASX debut.

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Motley Fool contributor Kerry Sun 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.

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