Sydney-based Australian sports betting operator BlueBet announced that it has obtained its first US wagering licence just a few weeks away from its July 2nd ASX listing.
The online bookmaker holds a 1.5% share of Australia’s lucrative betting market, with some comparison sites for Australian betting agencies not even including them in their lists of the best betting sites in the country.
With a market capitalization of around $220 million and strong growth since 2015, there is plenty of buzz around the company.
Inspiration for this IPO
Interest likely stems from Australia’s betting industry’s tremendous growth throughout the COVID-19 period with Flutter Entertainment (Sportsbet, Betfair) and Entain (Neds, Ladbrokes, Bookmaker) recording over 50% more in annual revenue in 2020.
Another reason is probably the success of fellow Aussie bookie, PointsBet which went public on the ASX in 2019 and has already seen growth of over 500% after it developed a strong presence in Australia before launching in a handful of US states.
BlueBet aims to raise $50 million in capital with the idea being to use these funds to continue their domestic expansion aiming to bring their market share up to 5% by 2025.
BlueBet CEO Michael Sullivan also outlined how the IPO and the funds raised will aid BlueBet’s plan to expand into the United States’ burgeoning sports betting market.
There are opportunities to bring advanced wagering services and decades of industry experience to what is a new market for most American iGaming operators.
Wagering services in America
“With America, gold rush is an understatement. They are behind [by] 20 years. They’ll catch up but it’s hard – I’ve been training my people for 30 years,” said Sullivan.
“The minute I take the first bet over there, my technology is proven… my people are proven, then I can go to these mid-tier casinos and say: I’ve got the licence, we’re betting, I want to talk to you about a joint venture,” he added.
In the US, online sports betting operators must be partnered with an existing land-based casino to obtain a sports betting licence leading to a ‘land-grab’ as the world’s biggest betting operators attempt to gain market share.
At this point, the location and physical operator involved in BlueBet’s wagering licence is a closely guarded secret but it is known that BlueBet aims to target small and medium level states where the competition between online operators are less fierce.
Almost half of America’s 50 states have implemented legislation to legalise online sports betting since the 2018 Supreme Court ruling which overturned the PAPSA Act, BlueBet’s licence is likely to be in a state like Virginia, Colorado, Iowa, Maryland or Tennessee.
Micael Sullivan founded BlueBet in 2015 after decades of industry experience with both Sportingbet and William Hill.
BlueBet’s initial shares will be available starting June 17th with $70 million available at a price of $1.14 each – a 4.9 times valuation based on 2021 forecast net revenue.