Justin’s note: Today, we’re handing the reins to Strategic Trader editor E.B. Tucker, who just uncovered an exciting way for you to make a fortune in the years ahead.
As regular readers know, E.B. put legal sports betting on our radar over a year ago, when the U.S. Supreme Court struck down a federal law that barred single-game gambling. And while that’s still a massive opportunity – and future billion-dollar industry – E.B. just found something even bigger: virtual sports betting.
It sounds crazy. But it’s happening right now. And E.B.’s here to share all the details.
Below, he gives an exclusive inside look into this brand-new industry… and the best way to take advantage.
By E.B. Tucker, editor, Strategic Trader
17,400% in three minutes…
I made 175 times my money last month at Smokin’ Joe’s Saloon… a well-known bar on the south side of Pittsburgh.
I went there to get a firsthand look at one of today’s biggest trends: virtual sports.
Virtual sports means there are no human players, no stadiums, and no hometown teams to favor. The game is pure chance. It’s a computer-generated simulation.
Pennsylvania is the first state in the U.S. to offer virtual sports betting through its state lottery commission. And Smokin’ Joe’s is one of two places I found in Pittsburgh where you can bet on the games.
When I walked in, nobody knew how to help me use the Xpress virtual sports machine… a clear sign that this trend is brand-new… and that now is the time to get in.
The Pennsylvania Lottery Commission put the big yellow machine in the bar. The bouncer did tell me that sometimes people win money at the machine and buy everyone drinks.
That wasn’t very helpful. I had to read the fine print on the machine to figure out how it worked.
Notice the state lottery machine takes credit cards
Every five minutes, there’s a virtual football game with randomly generated outcomes. Bettors make “prop” bets. That’s gambling parlance for proposition bets. It’s a side bet on anything other than the final outcome of the game. In the real world, these are sucker bets.
Virtual sports are not the real world. The plays, the games, and the outcomes are all simulated. To see how it works, I made five prop bets on the next game for $1 each. A countdown clock on the TV above the bar let me know the game started in 29 seconds.
Virtual stats shown before each simulated game
I bet $1 each on five random outcomes in a virtual football game
I wasn’t sure what the odds were. This was an experiment to see how the system worked. If it worked well, I was interested in the companies that make it possible. State lottery commissions across the country would rush to get in on this new source of gambling tax revenue.
Michigan just passed legislation allowing virtual sports betting through its lottery. States tend to follow each other when it comes to new sources of tax revenue. It won’t be long before most offer virtual sports betting.
The experiment worked out well for me. The Bobcats and the Diablos popped up on the screen. The computer showed stats for each team. While simulated, it does give you the feeling that you’re betting on a real game.
The first play was incomplete. On the second play, the Bobcats quarterback threw an interception. As you can see on the betting slip above, I bet $1 that there would be a turnover pass on the second play of the game. The payout on that $1 bet was $175.
Smokin’ Joe’s has three TVs dedicated to virtual sports betting
$175 paid out on a $1 virtual sports bet
When I win 175 times my money playing a game I don’t understand, I walk. It could be years of investing experience or simply discipline. Either way, I took my ticket to Joe and cashed out. There’s no way the Pennsylvania Lottery Commission loses in the long run.
The bet we’re more interested in is on the companies providing the software and services that make virtual sports betting happen.
The game I played is a virtual simulation. It has random outcomes. Think of it as playing digital slots in Las Vegas. You only see a screen with flashing lights. The days of three spinning wheels are over. Most machines don’t even have a lever to pull anymore.
Virtual sports is the next big money-making opportunity. We think the industry will take off… and now’s the time to capitalize.
How to Play a Brand-New Industry
The best way to predict how big virtual sports betting could be is to look at traditional sports betting.
Regular Dispatch readers know I’ve been covering this big trend since the Supreme Court gave states the right to license sports betting one year ago. New Jersey started taking bets within weeks. Six other states followed. Thirty-eight others have legislation in the works.
Excluding Nevada, revenue from lawful sports betting was effectively $0 one year ago. Today, it’s in the billions. It’s on track to reach a projected size of more than $150 billion annually.
To get an idea of how fast this type of industry takes off, look at New Jersey. The state moved quickly after the Supreme Court decision. According to the website playnj.com, gamblers wagered $16 million on sports in June 2018. Just six months later, that number was $330 million. That’s a 20-fold increase in half a year.
In our entry-level newsletter Strategic Investor, we recommended bigger companies set up to benefit from sports betting. Legalization meant a new source of revenue for companies that operate small casinos outside of Nevada. Legal sports betting offset falling traditional gaming revenue. One of the stocks we recommended is up 44% so far in 2019.
Virtual sports betting could be even bigger.
That’s because the companies serving this brand-new market are smaller and lesser-known. That means as the industry takes off, they have much bigger upside.
Small, up-and-coming companies servicing explosive new industries are the perfect fit for Strategic Trader.
We’re betting on the companies that provide the systems that make virtual sports betting possible. But we’re not interested in using stocks to play this trend.
We’re capitalizing off warrants…
Perfect Setup for Warrants
Warrants are at the core of what we do at Strategic Trader.
A stock warrant is a security that gives the holder the right, but not the obligation, to buy a share of stock at a fixed price at any time during a pre-determined period.
In simpler terms, warrants are a way to make more money than just buying a stock outright. And they’re also a much cheaper way to get in. (Make sure to check out this recent interview I did for more.)
They’re as easy to trade as common stock. And they offer far better returns because they essentially offer leverage to a rising stock price.
You can buy many of these warrants for pennies. And you have multiple years for the trade to work out.
Think of it this way. You could have 95% of your money in cash and 5% in warrants, and you’d still have the same upside as if you were all-in on stocks – but with much less risk because you’d be mostly in cash.
I say this because warrants offer capped downside while still giving you a real shot at 1,000%-plus gains. You’re not going for 20% returns.
Those are the kinds of trades you want to be making right now.
And if you can find a quality warrant on a company at the center of the next megatrend… you’ve struck gold.
We just shared all the details on which warrant to buy in last month’s issue of Strategic Trader. Subscribers can access that issue here. If you’re not a subscriber, we’d love to have you on board. You can join us and get all of our top warrant recommendations by going here.
Virtual sports betting could be as common as Powerball or scratch-off lottery tickets in the coming years.
Now is the time to take advantage.
Editor, Strategic Trader
Justin’s note: In E.B.’s Strategic Trader letter, he’s already pinpointed some of the most explosive warrants available today. One is already up an astonishing 264% in less than two months. Another is up 133% in less than a month. Two more are up 47% and 59%… and E.B. says we’re just getting started…
I also encourage you to check out the work from our friend Dudley Baker. Dudley is the founder and editor of Common Stock Warrants. He’s been trading warrants for 40 years and has developed an exclusive database of all stock warrants trading in the U.S. and Canada. We’re paid-up subscribers as well.