The ongoing torrent of SPAC money has many market observers wondering when the flow will dry up, but another growing sector might keep the investment trend going a while longer: sports betting.
SPACs, shell companies that raise money to acquire a private company and take it public, have become an incredibly popular trend among athlete and celebrity investors. They have also become a vessel through which investors can quickly pour money into the sports betting industry.
DraftKings went public through a SPAC merger in April 2020, and has seen its stock rise over six-fold since its launch. Rush Street Interactive and Golden Nugget Gaming, which have both online casinos and sportsbooks, also went public via SPAC.
The tech landscape underlying sports betting operators features a diverse group of companies that have been SPAC targets as well.
Sportradar, a major sports data provider with partnerships with the NBA, NFL, NHL, and MLB, is considering going public via SPAC, as is one of its top competitors, Genius Sports.
A December report on the sports betting industry counted three publicly traded sportsbooks and 15 technology companies related to the betting and gambling industry. The related iGaming industry — online betting where customers can win real money — has attracted $5.7 billion in SPAC acquisitions since 2020.
With Goldman Sachs predicting that the sports betting market will reach nearly $40 billion by 2033, money will keep pouring in through one source or another for a piece of that enormous pie.