SeventySix Capital, the Philadelphia-based sports venture investment vehicle, has created a second fund which will focus on sports betting.
Investors in the new fund include Atlanta Falcons owner Arthur Blank, Pittsburgh Pirates owner Robert Nutting, the state of Pennsylvania and a host of professional athletes.
“This next fund is an important milestone as we continue building SeventySix Capital as the go-to investment company in the sports industry,” said Wayne Kimmel, SeventySix Capital managing partner, in a press release.
The venture expects to top out at $50 million, according to Yahoo! Sports.
Blank, the co-founder of Home Depot, and Nutting, of the Ogden Newspaper family, were joined in the venture by the Ben Franklin Technology Development Authority, owned by Pennsylvania, which invested $1 million.
Athlete investors include soccer player Alejandro Bedoya, former running back James Develin, Oklahoma football coach DeMarco Murray, Buffalo Bills wideout Emmanuel Sanders and retired Eagles running back Brian Westbrook.
The first SeventySix Capital fund attracted about $40 million, according to a 2017 SEC filing. The fund has interest in C360, a sports broadcasting tech business; Diamond Kinetics, a baseball and software training technology maker; and Nerd Street Gamers, an esports event organizer.
In February, SeventySix sold Vigtory to Fubo for $10.3 million, along with $27 million in stock to former employee shareholders. In March, the fund sold Brent Musburger’s Vegas Sports Information Network (VSiN) to DraftKings for $41 million in cash and 500,000 shares of DraftKings. Again, in March, the fund sold off Team Whistle, a sports content house, to Eleven, a broadcasting entity founded by Leeds United majority owner Andrea Radrizzani.
“We share similar values and interests in entrepreneurship, the sports business and overall, the drive to work hard to achieve lofty goals,” said Sanders in the release. The SeventySix fund should reveal up to three investments in the next several weeks.
In related news, a gaming analyst with J.P. Morgan expects revenues from iGaming and sports betting to exceed prior projections by 2025.
Joseph Greff, in his latest report, predicts gross gaming revenue will top $19.3 billion, up from $12.2 billion. He also projects that 2021 will produce better results with sports betting and iGaming coming online in Connecticut on October 7. The combined sports betting and iGaming revenue should exceed $8.3 billion of which $4.4 billion comes from sports betting, according to CDC Gaming Reports.
Greff said as competition escalates for market share look for more consolidation in the industry. DraftKings has offered to buy Golden Nugget Online Gaming and Entain, for example.
“Overall, we have a favorable view, given near-term positive trends related to seasonality (with the NFL and college football seasons) and likely continued consolidation,” Greff said.
Online sports betting and iGaming market share for the second quarter finds FanDuel at 23 percent, BetMGM 19 percent, and DraftKings 17 percent. In the three largest states with two-thirds of the U.S. market, BetMGM had a 25 percent share in the second quarter, followed by FanDuel with 20 percent and DraftKings with 15 percent. Rush Street Interactive, comprising the BetRivers and SugarHouse brands, had a 9 percent share, followed by Caesars at 7 percent and Penn National at 3 percent.
When it comes to iGaming, BetMGM emerges as the market leader with a 30 percent share in the second quarter, followed by DraftKings at 14 percent, and FanDuel at 11 percent.
“BetMGM has gained market share year to date at the expense of DraftKings and FanDuel, which have been bleeding iGaming share,” Greff said.
When it comes to sports betting this year, FanDuel has a 31 percent market share, followed by DraftKings at 20 percent, Caesars at 9 percent, and BetMGM at 8 percent.
“We note that in recent months, BetMGM and Caesars have been gaining share, at the expense of Penn and FanDuel,” Greff said. “We look for shifts in market share as operators increase promotions in efforts to acquire players ahead of the NFL and NCAA seasons.”