The Future $94 Billion Market Flying Under Wall Street's Radar
NEW YORK, July 14, 2020 /PRNewswire/ -- There's a projected $94 Billion market quietly building under the surface. But Morgan Stanley may have finally brought online gambling to the limelight, calling it a mega-trend they expect to reach new heights in the post-pandemic world. Mentioned in today's commentary includes: AT&T Inc. (NYSE: T), Alibaba Group Holding Limited (NYSE: BABA), Brookfield Business Partners L.P. (NYSE: BBU), Fox Corporation (NASDAQ: FOXA), Great Canadian Gaming Corporation (OTCPK: GCGMF).
Projected by some analysts to grow to $94 billion over the next few years, this could be the most exciting opportunity on the market for early investors. And there's at least one company quickly making a name for itself ahead of the growing wave of investment.
FansUnite (FANS.CN) (FUNFF.PK) is a sports and entertainment company that has been active in the gaming industry since 2014, going public on the Canadian Securities Exchange ("CSE") earlier this year.
They're only getting started, according to their announced plans. For years, many other companies have catapulted their growth, becoming multi-million and even billion-dollar companies, through the proven strategy of mergers and acquisitions.
This strategy found another success story earlier this year with the $3.3 billion merger between DraftKings and sportsbook technology company, SBTech. Since then, DraftKings has seen its shares jump up 149%. Now, FansUnite is planning on following a similar path.
Earlier this year, they acquired McBookie, an established bookmaker from the U.K. with approximately 10,000 active users and $100 million wagered over the last 3 years. Now, with the esports industry pulling in $1.1 billion in 2019, up over 26% year over year and growing fast, FansUnite decided they didn't want to wait any longer to get in on eSports.
The industry growth is one reason why their signed merger agreement with another superstar in this booming industry, Askott Entertainment, is such an exciting development.Together, FansUnite and Askott will have 4 unique gambling platforms that have handled over $350 million in wagers and boast a combined 300,000 users.
Here are 5 reasons you'll want to keep a close eye on this emerge trend:
1 - Booming Market Opportunity
The global online gambling market expected to grow at a compound annual growth rate of 11.5% over the next 7 years, there's an incredible opportunity building for quality companies in the online gambling market. Even in the midst of the pandemic, with casinos and small businesses around the world being shuttered, the online industry posted incredible numbers.
The 4 U.S. states with legal online poker sites - New Jersey, Nevada, Delaware, and Pennsylvania - reported record numbers in the month of March. New Jersey alone took in $3.6 million in revenue, up over 90% from 2019.
2 - An Experienced Leadership Team
With the team of all-stars FansUnite has at the helm, they've proven they have both the smarts and the experience to drive growth over the coming months. Their CEO and CFO are both chartered public accountants, and their COO is an attorney well-versed in the art of international mergers and acquisitions. Their CEO was even named one of Canada's top 150 Entrepreneurs, but their C-suite aren't the only ones with impressive credentials onboard.
Because they've recently brought on board members with decades of online gaming industry experience, including executive roles at companies such as PaddyPower Betfair.
FansUnite (FANS.CN) (FUNFF.PK) has already grown their business in both North America and Europe but given the experience and connections their team brings to the table, it's safe to say they have much bigger plans for the future.
3 - Using A Tried-And-True Growth Strategy
With a few multi-billion-dollar companies sitting on top of the online gambling space, it can be a challenge for smaller players to grab market share while building slowly. Which is why many sportsbook companies have used mergers and acquisitions to strategically grow and capture a bigger piece of this predicted $94 Billion pie.
This proven strategy has helped several major players leverage other companies' relationships and business contracts to spread their platform like wildfire. Plus, it's a smart move in leveraging licenses to do business in different states and even different countries, opening up a growing user base and bringing the platform worldwide.
It's a tried-and-true growth strategy that has helped vault some of the biggest names in the industry to the top, and they're still following it to a T.
For example, Brookfield Business Partners (BBU) ,a top-notch business acquisition firm with a tremendous focus on success and the creation of shareholder value, has made major waves in the industry with its M&A strategy. The company's experienced leadership has led to incredible deals over the years, including a profitable partnership with Great Canadian Gaming.
The partnership with Great Canadian Gaming Corp. (GCGMF) allowed the pair to purchase an array of gaming assets in the Greater Toronto Area at a price of C$170. Together, the two companies aim to improve the value of these assets as well as bolster the customer experience with new offerings and expansions of acquired properties.
Even media giants like Fox Corporation (FOXA) are jumping on board. It's betting platform, Fox Bet works with Fox Sports, FanDuel, and Flutter Entertainment to provide avid sports fans with a novel way to bet in states which have legalized sports betting. Lachlan Murdoch, CEO of Fox Corporation, noted, "Our FOX Bet partnership is off to a great start, and teaming up with Flutter and FanDuel will allow us to build on that strength and jointly capture the significant market potential ahead of us."
FansUnite (FANS.CN) (FUNFF.PK) is planning to follow a similar path, already acquiring
4 - Multiple Streams of Income
FansUnite (FANS.CN) (FUNFF.PK) has used mergers and acquisitions to grow their brand across North America and Europe, but they're also using multiple platforms to bring in revenue from around the world. While most companies are only bringing in revenue from the customers on their own website, FansUnite has found another way to leverage their assets.
Not only is FansUnite getting ready to launch their own website to generate revenue from their users, they're also looking to sell their software to other sportsbooks, which would bring in revenue from users on third party sites as well.
By providing their online gambling software to other sportsbooks, they can gain valuable revenue from the three-pronged approach of an upfront onboarding charge, as well as a monthly fee and a percentage of the cut for all house wagers each month.
Their unique platform addresses a major transparency issue for most regulators and saves bookkeepers money in the process, so it's probably a no-brainer for many online gambling sites to partner up with FansUnite.
5 - Expanding to New Verticals
FansUnite has made it clear they're aimed at becoming a huge player in the projected $94 Billion online gambling industry, but they're not stopping there. With the merger with Askott Entertainment, they're also gaining an established partner in the esports industry.
The esports trend has gained a lot of steam in recent years, and it appears to have reached a tipping point. Both U.S. and international tech giants are getting on board.
Take AT&T (T), for instance. Its
acquisition of Time Warner Inc has launched the telecoms giant squarely into the esports arena. That $85-billion mega merger brought things like ELeague and Rooster Teeth into the AT&T fold. ELeague is part of Turner Sports, a subsidiary of AT&T's WarnerMedia, which televises its major events.
Nintendo even has a partnership with Eleague to broadcast The Nintendo World Championships on CBS, and Eleague hosts a lineup of other popular competitive games including Rocket League, Counter-Strike: Global Offensive, Street Fighter V, and Overwatch.
On the other side of the world,
is quickly becoming one of the world's hottest companies thanks to its innovative approach to technology. It offers investors the full package; exposure to the rapidly developing fintech universe, cloud computing and AI space, e-commerce and retail, and of course, gaming. According to Alibaba global esports director Jason Fung, "Alibaba has given us a five-year time frame to figure out what works in esports and to seek out business models that make sense."
With esports now reaching over 307 million viewers, FansUnite has jumped on an incredible opportunity to branch out and grab hold of this growing industry.
Thanks to their forward-thinking leadership, they aren't just planning on leveraging their own platform to build revenue, they've also planned to capitalize on opportunities to drive revenue in a number of growing verticals.
The Next Titan in this Future $94 Billion Market?
The writing is on the wall. With more and more states legalizing online gambling, this projected Future $94 Billion market is just getting started.
FansUnite (FANS.CN) (FUNFF.PK) has found themselves in an incredible position, acquiring and merging with key pieces that are designed to make them a force to be reckoned with in Canada - and maybe soon, around the world.
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FORWARD-LOOKING STATEMENTS: Certain information contained herein may constitute "forward-looking information" under Canadian securities legislation. Forward-looking statements may include, without limitation, statements relating to future outlook and anticipated events, such as the satisfaction of the conditions precedent and subsequent consummation of the Askott transaction; realizing FansUnite's plans regarding expanded consumer base, business base, offerings and gaming licenses; that Saxon Shadforth's contacts and experience will be a major asset; the growth of the online gambling market; its plan to grow by acquisition; the combined companies' ability to scale their platforms, to enter into new and emerging international gaming markets, to capture the growing demand of gamblers and to become a global gaming leader; the strengths, characteristics and potential of the combined company; the company's ability to become one of Canada's leading gaming companies; the ability to launch a proprietary sportsbook as well as selling software to other sports books; and discussion of future plans, projections, objectives, estimates and forecasts and the timing related thereto. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of FansUnite to be materially different from those expressed or implied by such forward-looking statements. Matters that may affect the outcome of these forward looking statements include that online gaming may not turn out to have as large a market, grow as quickly or be as lucrative as currently predicted; FANS may not be able to offer a competitive product or scale up as thought because of consumer tastes for its online product, lack of capital, lack of facilities, regulatory compliance requirements or lack of suitable employees or contacts; Mr. Shadforth's experience and contacts may not result in material benefits; FANS's intellectual property rights applications may not be granted and even if granted, may not adequately protect FANS' intellectual property rights; risk factors for the online sports gaming industry in general also affect FANS including without limitation the following: competitors may offer better terms to potential M&A acquisition targets, or no such target may actually be acquired even if agreements are signed; competitors may offer better online gaming products luring away FANS's customers; technology changes rapidly in the gaming and esports business and if FANS fails to anticipate or successfully implement new technologies or adopt new business strategies, technologies or methods, the quality, timeliness and competitiveness of its products and services may suffer; FANS may experience security breaches and cyber threats; regulators may impose significant hurdles to online gaming companies; FANS may not receive applied for gaming licenses; FANS's business could be adversely affected if consumer protection, data privacy and security practices are not adequate, or perceived as being inadequate, to prevent data breaches, or by the application of consumer protection and data privacy laws generally; the products or services FANS distributes through its platform may contain defects, which could adversely affect FANS' reputation. Additional information regarding the risks and uncertainties relating to the Company's business are contained under the heading "Risk Factors" in the Company's Non-Offering Prospectus dated March 27, 2020 filed on its issuer profile on SEDAR at www.sedar.com. Accordingly, readers should not place undue reliance on forward-looking statements.
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