It’s like Moneyball 2.0.

The original movie Moneyball told a story of how baseball was transformed once and forever by data. Before, scouts for professional players relied on gut feeling. After, it was all about statistics.

We’re in the big data age now. This means that there’s more data available than ever… and more money to be made from it.

And this trend is only getting bigger… as more US states legalize sports betting, big-data driven betting products flourish.

Look at this chart… it shows you all you need to know.

Since September 2020, betting and gambling have outperformed the S&P 500 by a factor of almost two. And this trend, in our opinion, could continue.

Let us tell you how it works and how some of the best companies in this field are achieving billion-dollar market capitalization.

You will do well putting some of them on your radar, of course.

Sports Betting Is Huge in the US

This is already a hundred-billion-dollar industry with multiple players in it.

In 2020, the total betting revenue was estimated at about $131 billion. By 2028, according to Zion Market Research, total betting revenue could reach almost $180 billion per year.

It could grow much faster, though… right now, sports betting is legal in only 23 states plus District Columbia.

So as more states legalize it (Connecticut, Louisiana, and Maryland look next in line), this market could explode. Everybody wins: betters get legal access to an activity that excites them, and states get tax revenue from betting and gambling.

Right now, the betting space is very consolidated. Three companies dominate it.

FanDuel is the market leader with a share of over 46%. DraftKings, which is a public company, is the distant second with 24% of the total, followed by BetMGM at 12%.

Investing in companies like DraftKings is one way to get exposure to the growing legal betting market in the US.

However, this is not a recommendation to purchase shares of DraftKings. Do your own due diligence and remember that investing always involves the risk of loss.

The Data Game

Besides the betting companies themselves, however, there is another interesting niche emerging in the legal betting market…

These are the “Moneyball” companies. They work with sports data.

They collect data on all aspects of a game, from the team lineup to the outcome of every little in-game event… and they allow gamblers to bet on those outcomes.

Think of them as data aggregators or intermediaries.

They buy relevant, up-to-the-second data from NFL and other providers… and sell it to TV broadcasters and betting companies that use it for real-time statistics and bets.

Sportradar and Genius Sports are some of the most well-known players in this area.

They gather data from providers such as the NFL, Major League Baseball, the PGA Tour, and others.

Both are new to the stock market. Genius started trading in late 2020, and Sportradar became public only in late September of this year. So far, Genius Sports has done quite well. Since its shares were listed, their price has almost doubled.

In other words, there are plenty of ways to play the betting market…

Including something completely new.

SoftBank, one of the world’s most famous tech investors with over $154 billion under management, has recently made an interesting bet itself…

It invested about $680 million into a $4-billion fantasy football startup called Sorare.

Sorare runs a fantasy football business with a twist. Players can also buy and trade digital football cards in the form of non-fungible tokens or NFTs.

In other words, Sorare put the card trading game on the blockchain and became one of the most valuable startups in Europe.

In the US, a similar startup, Dapper Labs, which operates a digital basketball trading card platform, is valued at over $7 billion.

Neither company has its shares available to the general public, but fans can trade the cards online, and some are making money doing that.

In other words, the markets for sports betting, gambling, and even the “game within a game” market of player cards are booming.

There are quite a few ways of getting exposure to it. Putting an ETF like the Roundhill Sports Betting & iGaming ETF (BETZ) on your radar could be a good idea.

Thank you for your loyal readership,

The Financial Star team