The BlueBet Holdings Ltd (ASX: BBT) share price is charging higher on Wednesday.
In morning trade, the mobile-first sports betting company's shares are up 8% to $1.77.
Today's gain means the BlueBet share price is now up 55% from its 2 July IPO listing price of $1.14.
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Why is the BlueBet share price charging higher?
Investors have been bidding the BlueBet share price higher today after it released a positive update on its US ambitions.
According to the release, the company has signed a skin agreement with the operator of Q Casino, Dubuque Racing Association. The skin agreement will allow BlueBet to conduct its online sportsbook operations in Iowa as an extension of Dubuque's existing casino licence. This remains subject to the completion of regulatory approval and licensing.
The two parties have signed an initial term of five years, which will automatically renew for a further five years unless BlueBet provides notice of non-renewal by January 2026. Furthermore, as part of the agreement, BlueBet will pay to Dubuque Racing Association a portion of the Net Gaming Revenues derived from the online sportsbook operations.
Management notes that while the US market is currently smaller than Australia, it has significant growth potential. It advised that US market revenue in 2025 is forecast to grow to as much as US$13.5 billion. And, as with Australia, the online channel is set to dominate sports betting in the country.
Significant milestone
BlueBet's Chief Executive Officer, Bill Richmond, commented: "This is a significant milestone in BlueBet's entry to the USA market. We are taking a very considered, staged approach to market entry in the USA, and we are tremendously excited to be announcing this agreement with the Dubuque Racing Association."
"We are initially launching a B2C business to demonstrate both the capability of our technology and our team, both of which have been honed by years of successful operation in Australia, ahead of moving to our Sportsbook-as-a-solution offering in the USA. This strategy allows us to access the tremendous USA opportunity without large ongoing capital expenditure," he added.
Mr Richmond notes that it has a big opportunity in the Iowa market, which could bode well for the BlueBet share price in the coming years.
He explained: "Iowa is a large wagering market with huge potential, and it perfectly fits our criteria. Since sports betting was approved by the Iowa legislature in August 2019 it has grown rapidly to a US$1bn+ market in FY21, 85% of which is now placed through mobile or online. We look forward to growing our online sports book in partnership with Dubuque and expect our mobile first online offering to resonate strongly with customers who have demonstrated a strong affinity for mobile wagering."
