Why is the BlueBet share price rocketing 16% today?

The BlueBet Holdings Ltd (ASX: BBT) share price is on the move during lunchtime trading on Tuesday.

This comes after the mobile-first online wagering provider announced it has expanded its presence in another US state.

At one point, BlueBet shares soared 42.5% to an intraday high of 67 cents. However, some profit taking by investors has led the company’s shares to retrace to 54.5 cents, up 15.96% at the time of writing.

BlueBet secures market access to Indiana

The latest release by the company has excited shareholders with the BlueBet share price accelerating today.

In its announcement, BlueBet advised it has signed a lucrative online market access agreement with Horseshoe Hammond, LLC.

Based in Indiana, the co-party is a 400,000-square-foot casino that is owned by global casino giant Caesars Entertainment.

In essence, this will allow BlueBet to operate a new online sportsbook in Indiana under its ClutchBet B2C brand. Although, regulatory approval and licencing will need to be acquired first.

The market access agreement has an initial 10-year term.

BlueBet noted Indiana is home to roughly 6.8 million people. The US state first legalised online sports betting in October 2019 and has generated $4.5 billion in wagering handle in the last 12 months.

A number of noted professional sports teams are based in the state such as the Indiana Pacers and Indianapolis Colts.

With market access now expanded to four US states, BlueBet will employ the first stage of its “Capital Lite” US entry strategy. This consists of launching ClutchBet to demonstrate the capability of its technology and team to run profitable sportsbooks in the United States.

The company expects to take first bets in its first US state, Iowa, within the coming weeks. It is set to be followed by Colorado and Louisiana in Q2 FY23 and Indiana in H2 FY23.

Management commentary

BlueBet CEO Bill Richmond touched on the milestone achievement, saying:

BlueBet now has market access in four US states, which provides a strong platform to roll out our B2C brand, ClutchBet, and demonstrate the capability of our technology and team to run profitable sportsbooks in the US.

There is no shortage of opportunities for further B2C expansion in the US, but our focus and capital are pointed firmly towards executing in our initial four states as we seek partners for our Sportsbook-as-a-Solution B2B offer.

BlueBet share price snapshot

Despite rocketing today, the BlueBet share price has tumbled more than 53% over the last 12 months.

These losses have come in 2022 following a major selloff of sports betting shares globally. Year to date, BlueBet shares are down 64%.

Based on today’s price, BlueBet commands a market capitalisation of roughly $106 million.

The post Why is the BlueBet share price rocketing 16% today? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BlueBet Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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