Mario Gabelli eager to invest in US sports betting despite hype of “stock market fantasy”

When pressed on whether he agrees with fellow investor Jason Ader, who told EGR the US sports betting market bubble could burst like the 1929 Wall Street crash, Gabelli noted there would be some “significant losers” amid the hype. He said: “There’s no question that many will be attracted, many new companies and a lot of money will be drawn. If you go through the parallels of history, whether it’s the Dutch tulip boom or the canal explosion, you’re always going to have bubbles and more money will come in, and some companies will not do well. “Clearly, the established companies like Caesars, we think have a core competency. In time, you’ll have individuals that will claim bankruptcy or that they hit the wrong button, made mistakes and put in too much money. “You have a company as a start-up that has nothing and is selling at an $8bn market cap so you do have a stock market that has created bubbles, and some will hitchhike on this,” he added. Gabelli went on to discuss the growing influence of special purpose acquisition companies (SPAC) on the stock market, having seen the likes of DraftKings and Rush Street Interactive launch IPOs following mergers with Diamond Eagle Acquisition Corp and dMY Technology, respectively. A new SPAC backed by online gaming veterans Matt Davey and Robin Chhabra was launched yesterday targeting a US gaming acquisition worth at least $1bn, for example. Gabelli said: “You also have SPACs that people are not comfortable with and don’t understand, but they are using them. There’s a lot of hype going on.” Finally, the New York-based 78-year-old delivered a reality check for prospective investors. He said: “I think there will be winners and some significant losers. You’ll have winners at one end of the barbell and at the other end you’ll have some who have exploited the stock market fantasy and they will explode.”