LONDON, January 16, 2019 /PRNewswire/ --
For decades, the gambling industry has been stuck in a legal limbo, with black market bookies and murky underground clubs mopping up billions in potential profits. But the floodgates are about to open to the general public. Mentioned in today's commentary includes: Great Canadian Gaming Corp. (OTCPK:GCGMF), The Stars Group Inc (NASDAQ:TSG), Las Vegas Sands Corp. (NYSE:LVS), Scientific Games Corp (NASDAQ:SGMS), Activision Blizzard (NASDAQ: ATVI).
That's because a key law outlawing online gambling across the United States has just been overturned. And one of the most exciting and profitable segments of the burgeoning gambling industry is sports betting, where tens of millions of people across the globe are looking to win big. NBA commissioner Adam Silver estimates the illicit sports betting industry could would be worth more than $400 billion per year, and it's all about to become legal.
One of the most promising players in the game is BRAGG, formerly Breaking Data Corp. (BRAG.V; BKDCF) If it performs like its peers, BRAGG could soon be worth much more than its current value, roughly $25 million.
22 MILLION POTENTIAL CUSTOMERS: THE LARGEST SINGLE PUBLISHER FACEBOOK PAGE IN THE WORLD
BRAGG has a captive audience and has simply been building goodwill, waiting to monetize them. The company's media property Give Me Sport has a monthly user base of 31 million.
The Facebook page for Give Me Sport has 26 million fanatic members, and the traffic on the site is immense. Compare that to major brands like ESPN which has only 19 million fans. ESPN is a major media brand, worth $28 billion, and Give Me Sport's user count blows it out of the water.
POISED TO ENTER A NEW UP TO $5.2 BILLION MARKET
In May 2018, the U.S. Supreme Court made a landmark ruling, striking down the Professional and Amateur Sporting Protection Act (PASPA). PASPA had made it illegal to bet on sporting events in all but a handful of U.S. states. But now online betting will be offered across the country.
The floodgates of sports betting could be about to open. 99 percent of all betting in the U.S. is based in the black market. Legalization in some states, which could happen as early as next year, could open up a legal betting market worth up to $5.2 billion.
If 2018 was the year of a marijuana revolution, 2019 could be the year that sports betting goes mainstream. But it's a sector that's received virtually no attention, one with a high barrier to entry. That's what makes BRAGG (BRAG.V; BKDCF) so unique.
STATES ARE CASHING IN AND INVESTORS MIGHT TOO
Striking down PASPA was the first step. The U.S. federal government can't outlaw sports betting. What individual states can do is legalize it, and tax the proceeds. New Jersey already does this: in September, the state reported $184 million in betting, with $24 million in revenue for the betting venues. More states are expected to cash in on sports gambling as a source of state revenue.
The barriers to breaking into online gambling are high. Margins on gambling are slim, with the house taking maybe $3 for every $100 on the table. Online operators need millions of users and tons of daily traffic; DraftKings, for example, relies heavily on its 10 million returning customers.
Few companies can do so successfully, and competition from players like DraftKings and FanDuel, as well as more established betting houses, makes it a tough climate for start-ups. But that's precisely what makes BRAGG such a strong contender.
- A team of experienced executives, who once ran the second biggest poker site in the world and generated $450 million revenue. This is a team primed for big things.
- A user base of sports fans on Facebook larger than ESPN or Sky Sports, a rabid fandom of 26 million and a Facebook presence larger than all its competitors.
- An incredible media property, Give Me Sport, and an online-gaming platform, Onyx, that is well-suited to online gambling.
- Tremendous early growth: since April 2017 Give Me Sports UK monthly traffic has increased by 5 million, while revenue has grown by 30 percent. Revenue growth from Oryx has been even more impressive: 414 percent year on year.
STRONG REVENUE GROWTH AND THEY ARE JUST GETTING STARTED MONETIZING THEIR 31 MILLION FANS
The industry leader, the popular fantasy sports and online sports betting venue DraftKings, has about 10 million users, compared to Give Me Sport's 26 million, and made $2.9 million in August in New Jersey alone. DraftKings isn't public, but its reported valuation is more than $1 billion.
By comparison, BRAGG is just starting up its online sports betting business, has a large base of member sports fans who will be offered the opportunity to bet through BRAGG's new platform, and BRAGG's estimated market cap is about $25 million.
It has more users than DraftKings, an online gaming platform almost ready for market, and mounting buzz. The key difference between DraftKings and BRAGG is that BRAGG haven't monetized their fans for sports gaming... YET. If BRAGG can carry out their well thought out business plans, they should give DraftKings a run for their money.
BRAGG (BRAG.V; BKDCF) should be able to successfully transition to major revenues in online sports gaming, based on its sports fan user base of 31 million. But for now, it's flying way under the radar.
Other companies shaking up the gaming industry:
Great Canadian Gaming Corp. (OTCPK:GCGMF)
Great Canadian Gaming has made a name for itself over the past 36 years. It has built a dynasty in Canada and the United States with properties located across the continent. The gaming industry leader has built its reputation and following on integrity, service, and through the support of the communities surrounding it.
Given its recent earnings reports, GC has been labeled as undervalued by many investors, and key indicators suggest the same, especially with a new gambling boom set to explode in North America right around the corner.
The Stars Group Inc (NASDAQ:TSG)
In December, Stars Group secured a major partnership with the National Basketball Association in order to use data and league marks across their digital sports betting offerings.
Scott Kaufman-Ross , Head of Fantasy & Gaming, NBA explained, "This dynamic partnership will be another way to create authentic fan engagement with league logos and official NBA betting data, while leveraging Stars' global expertise to further optimize the fan experience."
Las Vegas Sands Corp. (NYSE:LVS)
Las Vegas Sands is an iconic developer and operator of high-class luxury resorts and casinos around the world. Starting with just a single property a little under 30 years ago, Sands has grown to become an international powerhouse with business and leisure establishments in Las Vegas, Macao, Singapore and more.
Recently, higher-than-expected gambling revenues in Macao sent gaming stocks soaring, and though the hype has died down a little, it's clear the gaming industry is gaining speed once again, especially in Asia where LVS owns multiple high-performing properties.
Scientific Games Corp (NASDAQ:SGMS)
Even though Scientific Games is headquartered in Las Vegas, make no mistake about it, they are a global company with a presence on six continents. And their presence is far reaching. From digital gaming solutions to innovative lottery and sports betting products used across the planet, Scientific Games aims to take their customer's revenue and the players' experiences to the next level.
In December's SBC awards, an awards ceremony comprised of esteemed industry professionals, Scientific Games surprised attendees with the performance of the company's OpenBet sportsbook tech.
Activision Blizzard (NASDAQ: ATVI)
Activision and Blizzard merged in 2008 creating a relative supermajor in the gaming industry. The two companies have churned out some of the biggest hits in the gaming industry including World of Warcraft, Diablo, Call of Duty and more.
And now, in the competitive world of e-sports, a relatively new betting segment, titles like Heroes of the Storm and Starcraft have gained millions of players and even more spectators. The result? Huge tournaments featuring major purses and even television features on ESPN and more.
By. Charles Kennedy
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FORWARD-LOOKING STATEMENTS. Statements in this communication which are not purely historical are forward-looking statements and include statements regarding beliefs, plans, intent, predictions or other statements of future tense. Forward looking statements in this article include that the gaming industry continues to grow; that a bigger investment opportunity than casinos may be in growth stocks like Bragg; that GiveMeSport's new website will start with sports betting before expanding into the other areas including casino games, e-sports, poker and lottery products; that Bragg Systems may have a system that would be accepted by gamers; that it can leverage the Give Me Sport fan base into sports betting through Bragg's platform to drive adoption and growth; that Bragg can protects its intellectual property; the size of the potential sports gaming market; that Oryx gives it the gaming platform to break into the online sports gaming and betting market: that more states in the US will legalize sports gaming; and that Bragg's revenues will continue to increase; and that the company intends to grow and acquire assets across the full spectrum of gaming verticals in multiple jurisdictions. Forward looking statements involve known and unknown risks and uncertainties which may not prove to be accurate. Actual results and outcomes may differ materially from what is expressed or forecasted in these forward-looking statements. Matters that may affect the outcome of these forward looking statements include that markets may not materialize as expected; gaming may not turn out to have as large a market as thought or be as lucrative as thought as a result of competition or other factors; fans who like sport may not be converted to online sports gamblers; Bragg may not be able to offer a competitive product or scale up as thought because of potential inferior online product, lack of capital, lack of facilities, regulatory compliance requirements or lack of suitable employees or contacts; Bragg intellectual property rights applications may not be granted and even if granted, may not adequately protect Bragg intellectual property rights; and other risks affecting Bragg in particular and the gaming industry generally. The forward-looking statements in this document are made as of the date hereof and the Company disclaims any intent or obligation to update such forward-looking statements except as required by applicable securities laws.
Risk factors for the online sports gaming industry in general which also affect Bragg including without limitation the following: Competitors may offer better online gaming products luring away Bragg's customers; Technology changes rapidly in the business and if Bragg 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; Bragg may experience security breaches and cyber threats; regulators may impose significant hurdles to online gaming companies; Bragg'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 Bragg distributes through its platform may contain defects, which could adversely affect Bragg's reputation.
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