Key points
- BlueBet shares are rising after it gained access to the Colorado market in the US
- Colorado is the sixth largest sports betting market in the country
- Management is in discussions for similar agreements in other states
The BlueBet Holdings Ltd (ASX: BBT) share price has come back from the public holiday in style.
In morning trade, the sports betting company's shares are up over 10% to $1.15.
Why is the BlueBet share price charging higher?
The catalyst for the rise in the BlueBet share price on Thursday has been the release of an announcement relating to its US operations.
According to the release, the company's BlueBet Colorado business has signed a 10-year skin agreement with The Wild Card Saloon & Casino. It is a casino operator based in Blackhawk, Colorado.
The agreement is BlueBet's second skin agreement in the US and allows BlueBet to conduct business to consumer (B2C) online sportsbook operations in Colorado as an extension of its existing casino licence. Though, this is pending the completion of regulatory approval and licensing.
The Colorado market is a great one for BlueBet to have access to. The release notes that it is the sixth largest sports wagering market in the US, with turnover of US$3.7 billion in the 12 months to November 2021.
Furthermore, a big positive for BlueBet is that Colorado has among the highest levels of online wagering in the US with 98% of sports bets placed online. Colorado is also the state BlueBet has chosen for its US headquarters, which has been established in Denver.
But management is settling just for Colorado. It advised that it remains in commercial discussions with skin holders in several other target states and is assessing ten further states where sports betting is legal but not yet operational against its established entry criteria.
What now?
BlueBet notes that this agreement forms part of its two-stage US entry strategy. The first stage is the launch of a B2C business to gain access to the lucrative US market and demonstrate the capability of BlueBet's technology and team.
After which, once BlueBet has gained a foothold in the market, the second stage will be launching its white-labelled Sportsbook-as-a-Solution offering, enabling partners to benefit from BlueBet's market-leading technology and expertise running successful sportsbooks.
Management commentary
BlueBet's Chief Executive Officer, Bill Richmond, commented: "We are excited to announce a market access agreement with The Wild Card Saloon & Casino in Colorado. It is our second skin agreement in the US, as we continue our capital light US entry strategy by aligning with existing licence holders to access the world's largest sports wagering market."
"Colorado is a huge opportunity for BlueBet. It is the US's sixth largest sports wagering market with over US$3.7 billion in turnover in 2021, almost entirely wagered online. We are confident that Colorado bettors will respond well to our mobile-first online offering, and we look forward to offering them our range of innovative products and features," he added.
