Return to site

JEFFREY KAMYS | From Inherent Wealth Fund

· Podcast Episodes
Sports betting as a tech start-up Jeffrey Kamys from Inherent Wealth Fund

A federal ban on sports betting was removed in 2018, and there’s been a sprint to market, with states eager to get in on the gaming business and a steady trickle of new states opening their doors to gambling operators such as Caesars and MGM. Some 112 million Americans can now legally wager on sports using their phones.

U.S. sports leagues now embrace sports wagering as a way to connect with fans, especially young ones. New business partnerships are announced weekly, and teams and leagues are exploring ways to tailor game-day experiences for bettors.

Jeffrey G. Kamys is iBET Sports Betting & Gaming ETF $IBET Chief Investment Strategist & Portfolio Manager. This ETF provides exposure the sector by investing in companies and technology suppliers in this industry.

"As a Californian, someone who pays taxes here, I believe that it would be best if the greater amount of people benefit from those tax dollars, rather than having people go to Nevada to gamble. I always tell people about what's going on in this space. Our phones will control sports betting. This simple technology that's on your phone, is where most of it's going to happen."

  • The global online gambling market is expected to reach USD 127.3 billion by 2027, registering a CAGR of 11.5% from 2020 to 2027, according to a new report by Grand View Research, Inc.
  • Currently 22 states allow online sports betting, several others have legislation in the works.
  • Increasing adoption of smartphones and easy access to casino gaming platforms are currently driving the market. (Source: Grand View Research, Inc.)

"Phil (10m 25s):

I'm asking about the evolution because right at the end of the movie [Casino] where it shows the end of the old Vegas, the rat pack Sinatra kind of Vegas, and they've got that slow motion shot where they're opening up the brand new casinos. And that's all overweight people in leisurewear coming in with absolutely no class and culture.

 

Jeffrey (10m 45s):

That's not quite as sexy as you imagined. Well, he, I think he was kind of just connoting the idea that they had opened it up. I think Vegas made a mistake in those years. I think in the eighties and nineties, they were going for family oriented. That is not the feel in Vegas. Now Vegas is very much adult young entrepreneur. The theme of Vegas now is for 21 and up"

And another clip from Casino because I just love the movie.

TRANSCRIPT FOLLOWS AFTER THIS BRIEF MESSAGE

Sharesight Award Winning Portfolio Tracker

Portfolio tracker Sharesight tracks your trades, shows your true performance, and saves you time and money at tax time. Get 4 months free at this link.

Disclosure: The links provided are affiliate links. I will be paid a commission if you use this link to make a purchase. You will also usually receive a discount by using these links/coupon codes. I only recommend products and services that I use and trust myself or where I have interviewed and/or met the founders and have assured myself that they’re offering something of value.

EPISODE TRANSCRIPT

Chloe (1s):
Stocks for Beginners.

Jeffrey (4s):
There's so many sports teams in California that each one of them is going to have a kiosk of some sort, whether it's Penn National Gaming or FanDuel or Flutter, DraftKings, or whoever comes in, they will be in every place in the US

Phil (17s):
Hi and welcome back to Stocks for Beginners. I'm Phil Muscatello. I always joke about not having your investing app next to your sports betting app on your phone, but what about investing in sports betting? Hello, Jeffrey. Welcome back to the podcast.

Jeffrey (31s):
Hey, how you doing? Thanks for having me.

Phil (32s):
Jeffrey Kamys is the principal and chief investment strategist at Inherent Wealth Fund, which runs the IBET ETF. So let's start off by talking about the overall size and shape of the sports betting market

Jeffrey (45s):
It's it's growing is what's going on, especially in the United States. We've had, you know, legalization in, in different countries in Europe. Australia has had a lot of it. London's had it for a long time, but you know, now we're starting to get we're where 34 states legalize in the US we're getting a lot of new companies expanding. Most of the companies that are in this marketplace are small to mid-sized company. Some of the larger ones we know like Las Vegas Sands, Caesars, those companies. There's also some other ones that like VICI Properties, which essentially owns a lot of the real estate where the casinos reside in Las Vegas. And there's some like that Melco is another one like that. That's actually, it has a lot of China based exposure. And that's really interesting right now because we sort of have China coming out of a recession.

Jeffrey (1m 26s):
And now there are some opportunities in China, if you have the stomach for it. And we just took, we added a position in Melco just recently, the companies, especially in the, in the fund now that have China exposure could actually see a really nice takeoff and these kind of complement a lot of the Chinese stocks. They actually, the sports betting stocks sort of took a, you know, went down at the same time. You sorta saw the Chinese stocks go down, which is almost like for a year plus now. So they seem to be in a really good spot. And I think they are, they're actually comparing really nicely to the NASDAQ as of late. And I think we're going to start seeing some movement, especially when some of these companies started getting, you know, profitable towards the third and fourth quarters because of so much travel I've been in Las Vegas. I was just there two weeks ago.

Jeffrey (2m 7s):
It was booming. You know, they're, they're packed. And you know, one thing about this industry, I think that's interesting from an investment standpoint is that it's somewhat recession-proof because people will still bet on sports betting and we have new opportunities. We're seeing record numbers of sports betting handles in states, even in bad months, we're seeing very good numbers. Meaning when I say bad months, I'm just saying there aren't good sports about, you know, you know, when, when you come through football is really the catalyst, you know, and we're going to get football season starting here again in July, we're getting know training camps, open up August, we're going to get some college football and then September the NFL kicks around. And that's really a big catalyst. That's when you see the, really the boom in the marketplace.

Phil (2m 47s):
What about horse racing? How have people traditionally bet on horses in the states?

Jeffrey (2m 53s):
You know what it's, you know, a lot of off-track betting, you can bet in casino, you know, there's companies like Churchill downs. We have, we know we all have those apps. I mean, I've, I've been on that app myself, cause it's kind of, you know, it's entertainment to me, you know, and that's been legal for a long time. It's a small percentage of the marketplace. I think it's, it rates somewhere like fifth or sixth in the US, but it still does capture a lot where we have exposure through Churchill Downs in a number of other wagering companies that do have OTB or have direct, you know, relationships with, you know, track betting. It's always there, you know, in the old days, I think this is a really funny, and you know, if we look at some of the movies we had, like Seabiscuit using, you know, secretariat and those movies, you know, in the, in, in the twenties, the two biggest sports ever or in, in, in the world where at least the U S I should say, were, were, were boxing and horse racing.

Jeffrey (3m 43s):
They were the two biggest sports. I mean, college football didn't get bigger till later. And pro football for forget. It didn't really happen till the fifties or sixties baseball was around, but the two biggest sports were boxing and horse racing, you know, and maybe it's because of the storytelling, the way that you could take a day in there's something about it. I think the, you know, definitely in boxing, you can see that as America went through the depression, you can relate through struggle and strife through maybe the life of a boxer. And I think those are good stories. And those were the big sports back in the day. It's still there probably if they're six, you know, tennis actually is like fourth in all of sports, you know, gambling. It's very popular to bet on. I'm always surprised at how many people wager.

Jeffrey (4m 23s):
I actually always ask people, do you wait around tennis? And not a lot, maybe in the states? I think there's more maybe overseas who wait around tennis.

Phil (4m 29s):
So what's, what's the range of laws in the states. I mean, for example, what's which state has the least amount of legal betting?

Jeffrey (4m 40s):
Oh, well, the least amount would be Utah. It's never going to be legalizing Utah. Yeah. You know, because of the Mormon, you know, the way that they run, essentially their, their government there. But overall, if you know, this could be like a three hour dissertation on legalization because so many different states have all different kinds of permutations within their, their law. Cause we're in state law, obviously it's not federal. So they're allowed to make different choices. Some have online sports betting, some have in, in kiosk sports betting. Some you have to go and verify yourself in the hard location, then you can be online. So there's all kinds of different premium permutations. We have 34 states legalized. We have about another four that are coming that actually have legalization completed, but their need to get it ramped up.

Jeffrey (5m 22s):
And then we have several really big states still, which is why they're such an interesting opportunity here that are, that are going to be legalized. And then next we here's the really the big one that's coming up, that's going to do the record numbers is California, which is going to be legalized or is on the ballot for November. That means if they can get it passed in some form, which I believe they will, it will be legalized sometime, maybe for January, February by the super bowl in California and New York. If you remember in their first month, did a billion in handles. I can imagine California doing two or 3 billion. The main push against in California is of course these Indian reservations, which don't really have a great argument. To be honest, all they argue is that they have some kind of domain there. Their campaign seems to be very weak and I don't think it's going to hold up.

Jeffrey (6m 2s):
They California may give them some kind of room maybe, or a barrier like a, a brief maybe period where there's some different laws, but three, maybe couple years as it transitions in. And I'm sure that those major players will have the rights to, to California as they should. And it will be good for the tax revenue and a lot of the money that they're, they collect tax wise in California is going to go to mental health programs. So I think that's, you know, at least a good cause and we'll see how that gets, you know, disperse, but that's the, that's the what's happening in legalization. We still have two other big states, Florida and Texas, where they're not quite as close.

Phil (6m 38s):
It seems insane as an outsider, thinking about California and their liberal marijuana laws, but then the gambling laws yet to change. Is that the case?

Jeffrey (6m 49s):
Yeah. Well, it's, it's sort of not smart, right? I mean, to me, it's, they're just letting a lot of tax revenue go to places It should not. And I think as a Californian, someone pays taxes here. I believe that it would be best if the greater amount of people benefits from those tax dollars, rather than just having people go to Nevada, you know, to gamble, which is still good. People will still go there. I Always tell people about what's going on in this space. Our phones will control this sports betting. That's the reality on our phones. We will be betting. It's one of the reasons why these businesses are such great investments. Now it's because they're going to have incredible margins because of the economies of scale and just this simple technology that's on your phone, where most of it's going to happen.

Jeffrey (7m 30s):
The casinos are going to be the rewards. You know, my son who bets, not a lot because he doesn't have the means to bet a lot. He enjoys it, but it's, you know, for fun. He bets in Arizona. He went to school there and he lives in Arizona and it's legal to bet there online. And he bets through like MGMs betting service and he gets comps. So it's nice for him. He gets free hotels too. He can take his girlfriend to Las Vegas, you know, and he can spend the week, he'll spend a little bit more two days and he'll get free comps. And that's what really is setting up. You're going to have these, a lot of the betting is going to be done on your apps. And then you're going to get the rewards by being loyal to the, you know, to that hotel. And then you'll get the rewards. And so that's happened with my son. He had better comps than me. The last time I was there.

Jeffrey (8m 10s):
I don't know how that happened, but I got to work that I got to call somebody.

Phil (8m 13s):
Yeah. They might like the millennials better.

Jeffrey (8m 15s):
Right. They, I know, you know, they do. Yeah. Well, that's why, like, I know we're going to talk about like the Cosmopolitan Hotel down the road, but that's what that play was MGM that was owned by an outside, like a Blackstone. I think it was at large, a large investment fund group that was owned the, the cosmopolitan. But that demographic is great for, for this kind of this kind of organization, because they're 25 when I've stayed at the cosmos, it's a great hotel. I'm too old. I feel old there. I'm not too old to go there, but I feel, you know, it's skewed to young entrepreneurial 25. Maybe if you're, if you can make it there 32, like mid forties, you know, once you get over 50, you're a little bit too old for there. It's a nice, you know, I feel more comfortable with maybe an ARIA or something like that, but it's a great hotel.

Jeffrey (8m 57s):
And that was a big reason why MGM wanted to get that property. And that's why Penn National wanted it because it's a great demographic. And they wanted some access on the strip too. And that's a, that's a premier location. You know, it's a great central location in between all those MGM hotels. They had a lock it down.

Phil (9m 19s):
I guess this is part of the demographic evolution. I mean, it brings to mind one of my favorite movies, Casino, of course. And do you remember the, you know, the movie Casino, right?

Jeffrey (9m 29s):
I do a show with a friend of mine, his name, his name on the show because a lot of these wagers are the professional gamblers have have names, but he, his name is Uncle B on the show. And uncle B actually was a bartender in a bar in Del Mar where the Lefty Rosenthal character was hanging out. Cause he used to hang out at the Del Mar racetrack. So he comes on and he tells me actual stories about what a Lefty Rosenthal would bet on it. And he wouldn't bet on everything. He would only bet on things he really knew about, you know, a lot of us do it. He was doing it as a business, not just to have fun. So if he knew something and he loved it, but college football, because he would always find out about either a girlfriend problem or somebody who had an alcohol problem. No, cause this is the fifties and sixties. It wasn't so much about drugs back then as it was about alcohol.

Jeffrey (10m 11s):
And it's always about a girl, you know, you look up, if there ever a baseball player or football player is slumping, I'm always first thing, you know, something with his girlfriend or something at home, you know, with his wife. But, but yeah, I love that movie. Tell me what you were going to say with

Phil (10m 25s):
No, it was just going to ask about the evolution because right at the end of the movie where it shows the end of the old Vegas, the rat pack Sinatra kind of Vegas, and they've got that slow motion shot where they're opening up the brand new casinos. And that's all overweight people in leisurewear coming in with absolutely no class and culture.

Jeffrey (10m 45s):
Not quite as sexy. That's not quite as sexy as you imagined. Well, he, I think he was kind of just connoting the idea that they had opened it up. I think Vegas made a mistake in those years. I think in the eighties and nineties, they were going for family oriented. That is not the feel in Vegas. Now Vegas is, is very much adult young entrepreneur, you know, 21 and wherever there's still some activities, but that is not the theme in Vegas. The theme of Vegas is for 21 and up and, and get those people there. I think there's some of that. And I do, I did have that feeling, but there's not as much of the things for the kids. There's always distractions, but you know, you don't see, like I was at different, I go to different pools and you always check out the pools to see how many kids you don't see a lot of kids there. It's mostly young adults.

Phil (11m 26s):
So what are the challenges facing the industry?

Jeffrey (11m 29s):
Well, it's, here's why, here's why like an ETF, like IBET is great for an investor. The challenge is obviously area's growing fast. You know, we always hear this analogy on CNBC or any of the stock programs that people listen to and they always talk about what inning they'll say, what any of the, of the bear market are we in? I guess we're in, in, in like, hopefully we're inning 9 of the bear market, but they would always say, what inning are we in the bull market? And in the sports area, we're like in an zero, it's still so new, especially in the U S you know, we're, we're talking about legalization only three years that these companies have yet to really, you know, get their sticking grounds. You know, when you talk to someone, I talked to companies that deal with a lot of the European companies. And I talked to anybody who is in my ETF when I can get them and talk to them.

Jeffrey (12m 12s):
The European companies are set. You know, they have their customer acquisition strategies set up, they have their partnerships, they have all their strategic partnerships and they know how they're gaining customers right. Here this is the wild west in the U S because they are fighting tooth and nail for clients. And the big challenge that we heard about a year and a half ago was that they have ridiculously high customer acquisition costs because they're doing anything to get the client to come in. What I am seeing as the trend and as I talked to more of these companies now is we're seeing much more strategic partnerships, which is really the way that Europe does it, whether it's with affiliates, where people know people who will create sites and you'll have partnerships with them and you'll bring them in on the, you know, the reward, you know, if they send you a client, you'll, you'll take care of it, or it's strategic partnerships, like, you know, Draft Kings, opening up a beautiful lounge at Wrigley field where they can go in there and they can have a destination kind of kiosk or a place where they can wager, and then they can use their services.

Jeffrey (13m 8s):
And those are the really smart things. And I'll tell you, you will see in every state, I guarantee you, there, there is pen and paper on every major league franchise in California, right now, waiting for the approval, because there are so many sports teams in California that each one of them is going to have a kiosk of some sort, whether it's Penn National Gaming or FanDuel or Flutter or Draft Kings, or whoever comes in, they will be in every place in the US. And those are the new strategic concepts, rather than just spending. I think drafting spend a lot of money unfortunately, you know, when they first went public, you know, through their SPAC and they raised a lot of money, and I think they spent a lot of it on wide wide range advertising, you know, my brother who thinks that sports is the ballet was asking me who DraftKings is.

Jeffrey (13m 51s):
And I was like, yeah, I know. Why do you know about it? You know? And because he doesn't, you know, he's not somebody who had sports Wagering is not really a huge sports fan in any way. And I think if they're reaching them, they probably were overshooting. And I think now they've learned they are doing things with inducements. Now I'm seeing a lot of things with these kind of teaser bets where, you know, during the March madness, they had a, there was a game where Gonzaga US basketball college team here was given like an even money bet, meaning it would just be a win loss that for $50 just to get you in the door. Well, that was easy money. It really was. That was the easiest money. Now you can only bet it to $50, but if you bought it, you want, and you walk. And that would be, you know, I told people get on that, that that's a great bet. They were favored by like 20 points, but that's a smart thing they can do to get you in the door.

Jeffrey (14m 35s):
What they were doing too much, a little bit in New York is they were MGMWhat and some of these companies were giving large, large opening bonuses, like up to $3,000 I saw. And I think that they're learning from that. And I don't think we're going to see that when California opens, I think they're starting to get a little bit more wise about, you know, what the marketplace is, you know, you know, will, it will be good for their numbers as they grow their businesses. Because I think the investors are wanting to see these better returns. And I think we're seeing a lot of money going into advertising too much.

Phil (15m 4s):
What does the entry of Disney and to sports betting say about this sector?

Jeffrey (15m 8s):
Well, I think it's, it shows how I think that it's normal, you know, this onus of it being a dark alley thing is not the case. You know, it's very corporate, like the movie in Casino. What they were really talking about there is that at the end of the movie, is that it became a corporate thing. It wasn't going to be a bunch of guys who could put together a hundred million and put a casino together. No, maybe unless you're Steve Wynn, who's genius. You could do that. But you know, they, he had partners too, you know, but, but the point is, is it's corporate. You know, these companies will, will either be publicly traded or they will go public at some point. And it's, you know, the ecosystem in sports betting and gambling is just like the ecosystem in technology. You have all the same companies, cloud companies, technology companies, analytics companies, they're all doing the same thing.

Jeffrey (15m 50s):
But for this specific niche, it is a major, major industry, you know, billions and billions of dollars of industry. Most of them companies are small and mid cap. You know, in Europe we have some larger ones, too. Most of them are small and mid cap, but it is a growing industry. And as we get to eventually, I think we're going to get to 49 states legalized in the next couple of years. We might not, we may never get Utah, but we're going to get them all there because it makes sense tax wise and people want it.

Phil (16m 14s):
Okay. So you're running the IBET ETF. Tell us about the ETF and some of the more interesting holdings in this fund,

Jeffrey (16m 22s):
Right? So the ETF really gives someone an opportunity to invest in a growing segment with a CAGR of about 12 to 14% over the next four years. So it's got a lot of growth in it. It's got a lot of things that's happening. It is more recession proof than I would say a lot of things. If you look at some of the companies that are in the fund, I think there's a lot of compani you have a company like Boyd's who owns like the Fremont street casino, their numbers are actually holding up quite well. If you look at it compared to like the S and P 500, it's holding up quite well to the S and P 500 they're, their numbers are good. And there's a lot of companies in this industry that actually have really good price, earnings, ratios, you know, things where you think that these are all growth companies. They're not very few. In fact, if you look at the fund, a lot of them are making money.

Jeffrey (17m 5s):
Most of them are making money because the margins in these businesses are very good. You're when you talk about online, you have a potential to make incredible, like 70, 80% margins just on the online area. A company that I like is Bally's is interesting to me. I grew up in Chicago. Bally's is working towards putting together a casino on the waterfront lake, Michigan in Chicago with views of the lake fire pits up on the roof. One of the greatest convention cities in the United States. I think that's a really exciting project. I do like Disney. Disney is not in our fund right now. They were earlier in the year. They're not in the fund right now. I think they're really interesting. I like Penn national gaming, because I think that the stock is undervalued. I think a lot of what happened with some of these stocks was that we kind of had that bad taste in our mouth from DraftKings, because they were a lot of money on customer acquisition and a lot of the stocks in certain sectors, they ended up trading similar, even if they don't have similar numbers, they just get this kind of onus where a lot of people were starting to short.

Jeffrey (17m 60s):
In fact, this was a popular short for the last year. And you would have seen a lot of people do well, but people got on this Draftking short and they started shorting some of the other companies as well. And I think something like Penn national gaming, which has the Barstool sports kind of tie-in I think is a very interesting company. I think that their marketing is much different than what DraftKings has done. I think their number, their way, it's way undervalued, where it sits. Now, that's a really interesting company. A lot of the European companies are, are great. We have, you know, Flutter, which actually owns Fandel, which I think is a really interesting company. And then other companies that we maybe don't have in the ETF right now, somebody like a Sports Radar, which is an analytics company. You know, when you see a lot of like the online live betting, that's going on live betting now is a kind of a new innovation.

Jeffrey (18m 43s):
That means that in, during the event, you may have different odds. Now I would tell you as someone who likes a wager myself, I do not think that that is in your favor. I think the best chance you have as a wager is to get the game right at the beginning, because I think the house will have way better odds and analytics on the numbers during the game, because they will be able to throw the probabilities. What we know is we don't know how a team's going to show up, you know, but during the game, once they start seeing how they're going to show up, they have enough data to see what's going to happen. And I would tell, I told people on my show about a funny, but I made this year, which was kind of interesting, something new that's in wagering now. And online is that I think this was through the DraftKings app.

Jeffrey (19m 24s):
My son made the bet and we had bet the Bulls Chicago Bulls basketball game against Milwaukee Bucks, and the Bulls were getting 18 points. Walkie was heavily favored. Bulls made, had a great game. I think there were up with the points by like 28 or 30 and halftime where the, the operator offered a buyout of the bet at like a 95, 90%. And so, of course, why wouldn't you take the buyout at that point? So that's something new that you never would see in the old days. Like you couldn't call your book and say, Hey, will you give me a buyout? I'm up by three touchdowns, but those are some of the new things. But sports radar is a company that actually has, there's sort of like a platform builder. It's really interesting. They have all this analytics they do, but then they have a full platform. So if you're a new gaming company where you're looking for a new platform, you can come to them and they will essentially assist you with having all the database and all the platforms set up to just throw on top of your layer and have a whole gambling system.

Jeffrey (20m 14s):
So there's a lot of, it's sort of just like, that's like a Salesforce maybe for, for betting, you know? And, and there's all these huge companies in the ecosystem. So it's a lot of interesting different companies, all supporting, right. Even have a company like every it's kind of boring. They do, they do ATM's and machines, you know, scientific games and machines, but they're innovators too. And a lot of those businesses are better because they actually know right now there's a real backup actually in getting machines, just like everything. It's a supply chain issue because no one has chips. I would just say, what's super interesting about this is any industry that you understand. Like if you understand technology, the same ecosystem exists in sports betting. It's, it's Mo it's about a technical revolution because they are efficient. This is not about going to Las Vegas.

Jeffrey (20m 56s):
You know, these stocks get traded poorly all the time because they're like, oh no, one's going to be able to go on. Like, that is not what ha what's happening. The destinations are good, but they're not where all the money's being generated. The money's being generated online, it's being generated on your phones. So, so that's, what's happening, you know, these major handles and the resorts and destinations are great. And I had a great time in Vegas when I was there. It was very crowded, lots of people, and I'm happy to see it. And I talked to a lot of people. I learned a lot more about some other companies and I've been researching

Phil (21m 21s):
Well, I was just going to ask, presumably this is actively managed this fund. Yes, that's right. Yep. So what is the kind of criteria what's the, the benchmarks that you're looking for in companies to include in the fund?

Jeffrey (21m 33s):
I used a lot of technicals. I want I'm looking for something. So what I think is interesting is the reason I ended up in Melco is because that's very, and I've actually bolstered a couple of the positions with China exposures. It makes me, I watched something like the K web, which is Chinese stock ETF. That's kind of rolled over so much that it's started to make some gains. And you see that in the tenor where the Chinese economy now is going to be more conducive or they are going to be essentially, they're going to support their economy more, you know, with not raising interest rates and doing more things to build their economy because they are coming out of a recession. I think what you're going to see here in the U S by the way, not to go and jump around too much, but that we're going to end up cutting interest rates again, by probably a half a percentage point probably next year.

Jeffrey (22m 14s):
At some point, maybe this time, next year, we're going to be talking about cutting interest rates because that's what always happens.

Phil (22m 19s):
It's starting to feel that way. Isn't

Jeffrey (22m 20s):
It? The bond market tells us because the bond market is like, we wanted to get ahead because you were wrong. The bond market was slapping. That's not be disrespectful, but essentially the Bond market was slapping, you know, Powell in the butt saying, Hey, you're late. We're going to get way ahead of you because that's what the 10 year did. And now it's kind of saying, okay, well, we're seeing things kind of change really fast, which I think is amazing how fast it is. And I believe everything's tethered so tightly that that's happening that way. And then we're seeing something like China, the active does for me is it lets me change things. I believe what we're, we're performing as a, in general of the fund is performing better than one of our primary competitors. And I know it's because we are active. They are not they're indexed. And it allows us to change things when I see an opportunity for the fund to do better.

Jeffrey (23m 2s):
And so getting into China now, in some positions in China with more exposure like Las Vegas sands Malco, there's a couple others that we're looking at is what we want to do because we see that the bottom is in, I think in China. And I think that if the government's going to be opening borders, which we're hopeful of, we're going to start getting more tourism there and we're going to see Macau numbers go up. China's a little bit of a, you know, it's it, it's the, you have to have a strong stomach for it, but I think that there's some opportunities there. So that's what we're allowed to do. Being active. I also watch technicals a lot, you know, looking for technical bottoms, technical tops, some of those things and fundamentals. When I hear interesting stories about casinos expanding territories or opening, or who's going to open in an area, you know, those are things we're looking for.

Jeffrey (23m 45s):
And so we can get ahead of the other funds. And I know that if you look at our returns for like the last three months, I know we're 6% better. We've been generally better. And I can't really give those numbers, but I know we've been better than our, than one of our main competitors in the U S and it's because we're active because we're able to update. We're not going to wait until the quarterly, you know, you have to quarterly re you know, boot everything. We do it when we see the opportunity.

Phil (24m 6s):
So MGM recently purchased the Cosmopolitan Hotel in Vegas and Penn national gaming was also in, on running the strategy behind the purchase. Tell us a bit more about this.

Jeffrey (24m 19s):
Well, I think that, you know, Penn was a little upset that, that MGM got that because Penn wanted it for the exposure to two Las Vegas strip giving them another crown location and MGM wanted it because they wanted to lock up that territory because they essentially have that whole boardwalk area, which is locked with casinos from MGM, from one to the other. And I always say at MGM, I get comp there. I love the hotels there. I think, I think they do a great job. I think the rewards program is great. You know, the M life program is excellent. And I think they just wanted to lock up that territory. I know that Dave Portnoy was upset because of his relationship, the Barstool relationship with Penn, because he said that it was not fair. And he believed that there was some insider, but, you know, you know, I'm not sure how that started.

Jeffrey (25m 1s):
You know, essentially Vici properties is the company that owns the real estate there. And MGM is like one of the biggest, you know, tenants for that company. Right. Essentially. And that's a re actually it's in our fund and it actually has a nice dividend because REITS, you don't have to pay out 90% company does very well. It's one of the largest cap stocks, actually in the sports gaming industry though, they're not directly related to sports wagering or, or beting. They are the landlord of all these companies, right? So it's sort of, that's what they do. And so I think that there probably was some incentive to get MGM in there, to be honest. And I think it's a great hotel for demographics, for them as they continue to build a online gaming, because online gaming is going to be dominated by people who are 25 to you know my kids who are 21 and 22, who don't wager a lot, but they enjoy it.

Jeffrey (25m 45s):
And they have apps. And those that's the phone generation. My kids don't even watch TV. They're on their phones. Everything's on the phone with, you know, they've been spending more time with me. I live down in the desert now and that's closer to where they live. So they spend more time with me. And all they're doing is they don't watch TV. The TV can be on in the room, but they're on their phones all day, you know, and that's where the gaming app companies want them.

Phil (26m 5s):
One of the great themes at the moment in investing is of course ESG. And what are your thoughts on the ESG genus of sports betting?

Jeffrey (26m 13s):
You're going to really ask me about this.

Phil (26m 15s):
I'm really going to ask you,

Jeffrey (26m 17s):
So I'm not a big fan of it because I think it's a stamp. And I think that people set up companies right now where I'm not sure that they can claim that they can investigate. I think in some of these really large companies, I'm not saying that people don't do it. I'm just saying it's a big statement to make for an opportunity. And I, and I am not a big fan of it. It's not an angle that I really pursue in sports gambling. I would say that I know that this is a hot topic and there's a lot of funds that, that surround themselves in the stocks to me, if you're going to do an ESG program on some of these huge companies that are billion dollar companies, how in depth would that have to be? I would think that that would be, it would take you two or three years to put a study together, to see if they were really ESG, you know, if they were evolved enough to be SG certified.

Jeffrey (26m 60s):
And so I think it's, there's somewhat of a disingenuous feel to it. I, you know, I know it's a hot topic and I think that anything we do to be more to have that kind of governance and have that understanding is better. But I think that I'm just wondering how detailed those programs are to get affirmed or confirmed in those programs.

Phil (27m 17s):
Oh, just as an example, I know here in Australia, I'm involved with the Australian shareholders association who are very concerned about ESG and one of their ESG ticks I guess was that Crown Casinos treated their employees very well during the COVID lockdowns because obviously everything shut down and they continue to pay their employees quite for quite extended periods of time. So, you know, in terms of the governance side of things, they can do okay,

Jeffrey (27m 45s):
Well, you know what a crown resorts, thanks for bringing that one up there. Actually in my ETF, that's actually been, that's been a, that's been a standout stock. I will tell you that's been one of the best stocks when we added it. It's up, it's up. I think it's up 20 or 30% since we've added to our fund. It was originally in the fund. They won, it has been an outperformer. And if you put that up against any other stock, any other stocks in the ETF of the fund, or you could pick 60 or 70 in the space. I bet it's one of the main outperformers.

Phil (28m 15s):
Cause it seems strange hearing all this from Australia because the, the gaming industry in Australia seems so mature in comparison.

Jeffrey (28m 23s):
And

Phil (28m 24s):
A lot of it is government run as well.

Jeffrey (28m 26s):
Yeah. Well, like, are you talking about like more of the lottery company

Phil (28m 29s):
Companies? Yeah, that's correct. That's correct. Yeah.

Jeffrey (28m 31s):
Yeah. I think there was, to me that was, that's an interesting one. We have actually have a big position in both the tab Corp and the lottery corporation. That's an interesting stock. I really want to know what's going to happen more with that. I'm watching it closely, you know, they spun off or they demerger the companies, you know, we had Tabcorp stayed as the gaming and then we, they split it in the lottery corporation, a lot of corporate, huge business that there's much belief that it was separated for a potential buyout by a large conglomerate, a big broker house, just, you know, an investment banker type company, because it's such a gigantic, you know, it's, it's the cash payer and the other business still gonna have to be built. It's going to have to go through the, you know, but we were, I was interested in it and we actually upped our position knowing that they were going to have the demerger because I think it's, there's a lot of interesting opportunities there.

Jeffrey (29m 17s):
It'll be interesting. I've been watching it. That's all I can say. I don't know if you heard more about what's going on with it.

Phil (29m 21s):
I should just check it out. Cause I know that the shareholders association here in Australia does monitor several of those companies and I'll, I'll do a bit of a dig and see if I can find out any more information for you.

Jeffrey (29m 32s):
Yeah. And then we can talk about it a little more. I guess I just get what we get on the Newswire what's available that I can pick up, but I think it was really interesting. We also have some exposure to Star Entertainment Group. And so we do have some Australian exposure and again, you're right, because there has been these companies that have been around for a lot longer than a lot of the U S companies, which are all kind of infants compared to the Australian companies. But that, that one C rown for sure has been one of our performers in the fund.

Phil (29m 56s):
So how can listeners find out more about the Arbit eight here?

Jeffrey (29m 60s):
Well, they, you need to look me up. Jeffrey came in as K A M Y S a. They can Google the fund, which is inherent wealth fund, or they can just Google IBET ETF. a sports betting and gaming ETF.

Phil (30m 12s):
Fantastic. Jeffrey Kamys. Thank you very much for joining me today.

Jeffrey (30m 15s):
Thanks for having me Phil.

Phil (30m 16s):
If you found this podcast helpful, please tell a friend, especially if it's someone who needs to start thinking about investing for their future, you'll be helping them and helping me to keep this show on the road.

Chloe (30m 27s):
Stocks for beginners is for information and educational purposes, only it isn't financial advice and you shouldn't buy or sell any investments based on what you've heard here. Any opinion or commentary is the view of the speaker only not stocks for beginners. This podcast doesn't replace professional advice regarding your personal financial needs circumstances or current situation.

Phil (30m 45s):
And thank you for listening to my podcast.

Stocks for Beginners is for information and educational purposes only. It isn’t financial advice, and you shouldn’t buy or sell any investments based on what you’ve heard here. Any opinion or commentary is the view of the speaker only not Stocks for Beginners. This podcast doesn’t replace professional advice regarding your personal financial needs, circumstances or current situation.

 

All Posts
×

Almost done…

We just sent you an email. Please click the link in the email to confirm your subscription!

OK