We all like tendies, so from one ape to another, hear me out on this one as we are on the brink of this company's BIGGEST catalyst.
Some context on the company and it’s industries (Sports Media/Sports Betting):
TheScore mobile is the number 1 most used sports app in Canada with 10 times more users than ESPN. It’s one of the most used sports mobile apps in all of North America citing almost 4 BILLION user sessions over the last year. They have industry leading rates of user engagement at an average of 130 minutes per visitor with each user opening the app an average of 125 times a month.
This engagement is due to the many features in the app including: real-time sports news, live scores, in-game highlights, a social ecosystem where fans can chat and discuss live games, add friends, send private messages, etc. They have original media content, in-game odds, sports betting content and even personalized promos for bettors based on their in-app media interests. They’ve reported close to 4 million unique users per month.
TheScore achieved this success despite being a small company against industry titans. They’re no stranger to being an underdog which now follows them in the mobile sports betting industry. PASPA was repealed in 2018 allowing individual states to offer legalized, regulated sports betting. The North American opportunity for this industry is estimated to represent a $US 22 billion opportunity by 2025.
theScore made the decision in 2019 to enter the market as an operator in NJ through a partnership with Darby Development with their Score Bet app. They have since expanded operations to a total of 4 betting states (NJ, CO, IN, IO) and have acquired market access agreements across 14 states via a partnership with Penn National and other market access deals (CZR deal) which represent more than 30% of the U.S. population and a $US 8.2 billion opportunity for them. The CEO and founder, John Levy, has stated that by next year they will be operating in at least double the amount of states and that they’ll be active in 35 States within 3 to 5 years.
TheScore recently rebuilt their media app completely in-house to increase its performance, stability, and scalability, likely related to continued user growth and future betting integrations. They’ve built their “Fuse” and “Bet Section” as a fully integrated approach to link their gaming and media apps. Users of both apps can now build their bet slip while benefiting from all of theScore’s features. When they’re ready to finalize their bet, they’ll be taken to the Score Bet app to place their bet or cash out. This is a defining feature that their highly engaged userbase will remember and one that will lead to higher rates of retention vs competitors that treat the bet as just a transaction. This approach not only increases retention rates but also greatly reduces their customer acquisition costs in an industry that is renowned for not having brand loyalty.
The New Jersey handle (Percentage of the total amount of bets taken in the State) rose 195% versus the prior year, validating that their unique combination of media and betting remains a powerful differentiating factor against competitors in their oldest operating State. Total gaming handle also grew 46% overall compared to the previous quarter. They are the only media company to be operating their own book and they’ve been seeing these early signs of success. Other companies have started to take notice as they’ve been buying or partnering with media companies via expensive deals (ex: DKNG 1, DKNG 2, PENN, FOX). However, they have not been able to develop the same seamless approach that theScore has attained internally.
theScore is not the loudest nor the flashiest betting operator. You won’t see Score ads like you do with some other companies because they’re targeting their existing userbase in a way that is financially responsible. They aren't aiming to do flashy deals. They won’t win by trying to outspend the big guys, but they already know this, as it’s a situation that they've already been through. Instead they're growing their numbers organically with their customer focus.
So, what’s this huge catalyst that I spoke of?
The Legalization of Mobile Sports Betting in Canada, where theScore Media app is a household name will likely take place within the next 3 weeks or earlier.
Last week, bill C-218 passed its 2nd reading in the Senate, this is often where the biggest risk lies.
Tomorrow, it will be studied by a Standing Committee. After passing that stage it will then move to 3rd reading before becoming law.
The bill is supported by provincial bodies, by every major sports league, and even sports broadcast companies as their viewership numbers continue to decline. It just so happens that the Deputy Chair of the reviewing committee also served as Commissioner of the Canadian Football League (CFL).
The opportunity presented by this bill passing is forecasted to be US$4 to US$5+ billion at maturity. TheScore is actively preparing for this opportunity and extremely well-positioned to benefit long-term as Canada’s leading mobile sports media brand.
10% penetration of the Canadian Market = $US 400 Million15% penetration of the Canadian Market = $US 625 Million20% penetration of the Canadian Market = $US 850 Million
The current market cap is valued at $US 843.647M which indicates that this legalization is not currently priced in, as it wouldn't take into consideration everything else that theScore has built. The stock’s technicals have bottomed out and we can finally see that the trend is reversing. All of this, combined with SCR’s low float will mean an explosive next few weeks.
Bonus info about eSports:
– Gen Z is half as likely as millennials to watch live sports and 2x more likely to never watch
– 35% of Gen Z identify as eSports fans, a higher percentage than NASCAR, MLB and NHL
– There’s a potential for ~6 million new bettors with an outsized affinity for eSports over the next five years
– 495 million people watched eSports online or on television in 2020, worldwide and viewers are projected to grow to 646 million by 2023.
eSports betting will be one of the biggest categories of sports betting over the long term, if not the biggest. theScore eSports has the #1 esports media following with 186.5 million reported video views in their most recent quarter, which represents a 139% YoY growth and an average social media reach of 88 million a month. Guess who’s actively seeking and preparing opportunities to enter this space?
EDIT: theScore, like all other sports betting companies is currently sitting at a negative EBITDA (of $12.9M) because we are still in the early days of a high-growth industry. Companies have to get passed all of the free bets and incentives that are offered, Market entry costs, etc. The revenue will then start to show.Last quarter they reported a handle of 81,6 million, with Net gaming revenue being ($2.4M) and a media revenue of $8.0 M
TLDR: APES & DEGENERATES LIKE GAMBLING ON SPORTS AND ESPORTS. SCR, the #1 Canadian Sports Media app entered Sports Betting and is seeing encouraging results. They’re also the leading eSports media brand and are actively seeking to enter esports betting which will eventually become one of the biggest betting categories. Legalization of Canadian Sports betting in the next weeks + US Sports betting expansion means that this company is extremely undervalued for its future potential in a $US 22 Billion industry. 🚀
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