March 2024 Fund Update

March 2024 Fund Update

In every industry, there are prominent figures who stand out, and the wagering industry is no exception. This month, we shine a spotlight on three distinct leaders in the industry: Tim Heath, a crypto wagering pioneer; Peter Jackson, the CEO of Flutter Entertainment (listed on the FTSE100); and David Walsh, renowned as one of the world’s largest professional horse racing gamblers.

February 2024 Fund Update

February 2024 Fund Update

Whilst it is very difficult operationally and cognitively to win at betting, there are several groups that do so very successfully. We believe that professional betting is one of the most difficult fields in the world. The three keys to winning at betting are: making correct bet selection; betting at an attractive price; correctly staking (knowing how much to wager on each selection).

January 2024 Fund Update

January 2024 Fund Update

In 2023, Waterhouse VC generated a strong return of +39.5%, strongly outperforming the S&P500 (+24.8%) and the ASX200 (+7.8%). In 2023, there were two stand out contributors to the fund’s +39.5% performance:
Project Tennis - a professional betting syndicate founded by Tom Dry focused on tennis (first discussed in December 2022 and invested in on 1 July 2023)
Saintly - a crypto wagering operator and B2B platform (see more here) - position exited in August 2023.

December 2023 Fund Update

December 2023 Fund Update

Relying solely on their monopoly position is not an optimal strategy for monopolies, particularly in the context of increasingly accessible unregulated wagering. Unregulated wagering will compel monopolies to engage in at least some level of competition and they must deliver an attractive product offering and customer experience. As regulated monopolies face continued pressure from unregulated operators, they must consistently innovate to retain and attract customers.

November 2023 Fund Update

November 2023 Fund Update

Balancing gambling regulation/taxation is crucial to ensure a harmony between safeguarding consumers, thwarting criminal activities, and cultivating a market that is both fair and competitive. A well-crafted regulatory framework effectively considers the interests of betting operators, consumers, and the broader community.

October 2023 Fund Update

October 2023 Fund Update

‘Local heroes’ are wagering operators that have been successful in attracting customers from a single geography. The largest global operators, including Flutter, Kindred, Playtech (which also has a large B2B arm) and Entain, have effectively grown by acquiring local heroes and assisting them with expertise and technology. Most recently, in September, Flutter acquired an initial 51% stake in MaxBet, the second largest sports wagering and gaming operator in Serbia, for €141 million. Flutter has an option to acquire the remaining 49% of MaxBet in 2029. In the 12 months to June 2023, MaxBet had around 20% market share in Serbia and generated revenues of €145 million (44% from online).

September 2023 Fund Update

September 2023 Fund Update

With 214 million people and 217 indigenous languages in addition to Portuguese, Brazil is a large and complex market. It is one of the largest online sports betting markets in the world with 42.5 million unique users. Wagering operators generate significant revenues in Brazil by leveraging influencer marketing and numerous sports sponsorship deals. Brazil's Chamber of Deputies recently passed a gambling regulation act, allowing online gaming and omnichannel wagering, with operators able to buy three year licences. However, operators will be prohibited from offering bonuses and will pay an 18% tax on revenues.

August 2023 Fund Update

August 2023 Fund Update

The rise of pro gamers and dedicated fan bases has boosted user numbers on streaming platforms like Twitch, which Amazon bought in 2014 for $970 million. The opportunity in streaming is vast, with just a handful of platforms dominating the US$3.8 billion industry. Kick continues to attract fresh streamers, with its alluring 95/5 revenue split supporting the platform’s growth from 9,000 active channels in January to 67,000 active channels in April. With such strong growth and a positive attitude towards gambling streaming, Kick poses a formidable challenge to Twitch's dominance.

July 2023 Fund Update

July 2023 Fund Update

While the US and other newly regulated markets present exciting opportunities for affiliates, we are particularly enthusiastic about the prospects for affiliates focused on directing bettors towards crypto wagering operators. Similar to the US market dynamics, numerous crypto operators are currently vying for market share and affiliates are well-remunerated for delivering depositing bettors to crypto operators.

June 2023 Fund Update

June 2023 Fund Update

World-renowned investor Warren Buffett and numerous other famous investors were initially influenced by betting and bookmaking (particularly horse racing) before transitioning to financial markets. The new wave of professional bettors are now finding success in financial markets as well, with significant cross-over in the statistical analysis and thought processes applied across the two domains.