The 2021 National Collegiate Athletic Association (NCAA) Division I Men's Basketball Tournament kicked off last week spreading “March Madness” into millions of Americans. This is especially true, as the annual event will lead to crazy legal sports betting, pushing up the stocks in this sector higher.

With increased legalization of online sports betting and the cancellation of the tournament last year due to the COVID-19 pandemic, this year’s tournament will be the most wagered-on sporting event in history. The legalization of sports betting across the United States has increased significantly from 2019 with online gambling now legal in 25 states and Washington, D.C. By population, 45% of American adults now live in a state with legalized sports betting.

According to the American Gaming Association, more than 47 million people will place bets on tournament with a dramatic rise in land-based and online sportsbooks betting. More than eight million bettors plan to make wagers at land-based sportsbooks, up 79% from 2019. Another 17.8 million plan to place bets online, up 206% from 5.8 million in 2019. Wagers are expected to break the 2019 record of $8.5 billion (read: Another Streaming and Gaming ETF in the Making).

The tournament is expected to generate as much as $2 billion in legal bets, per the H2 Gambling Capital estimates. The biggest modern sporting event of the United States will likely draw more than $1 billion in legal wagering and could approach $1.5 billion, according to projections by PlayUSA.

Investors should tap the three-week sports betting extravaganza with the following ETFs:

VanEck Vectors Video Gaming and eSports ETF (ESPO Quick QuoteESPO - Free Report)

This fund offers exposure to global companies involved in video game development, esports, and related hardware and software by tracking the MVIS Global Video Gaming and eSports Index. It holds 25 stocks in its basket with American firms accounting for nearly one-third of the portfolio, while China and Japan round off the next two with a double-digit allocation each. The fund has gathered $821.1 million in its asset base while trading in an average daily volume of 190,000 shares. It charges 55 bps in annual fees from investors (read: 5 Global ETFs Riding on Best Winning Streak in 17 Years).

Global X Video Games & Esports ETF (HERO Quick QuoteHERO - Free Report)

This ETF offers exposure to companies that develop or publish video games, facilitate streaming and distribution of video gaming or esports content, own and operate within competitive esports leagues, or produce hardware used in video games and esports, including augmented and virtual reality. This can be easily done by the Solactive Video Games & Esports Index. Holding 40 securities in its basket, the fund has AUM of $719.4 million and charges 50 bps in annual fees. It trades in an average daily volume of 405,000 shares.

Roundhill Sports Betting & iGaming ETF (BETZ Quick QuoteBETZ - Free Report)

This ETF debuted in early June and has attracted $509 million in AUM. It is designed to offer retail and institutional investors global exposure to sports betting and iGaming industries by tracking the Roundhill Sports Betting & iGaming Index. Sportsbook comprises 33.3% share while iGaming and technology round off the next two spots with a double-digit exposure each. The fund holds 40 stocks in its basket. It charges 75 bps in annual fees and trades in an average daily volume of 540,000 shares (read: 6 Sector ETFs at All-Time Highs Braving Tech Rout).

VanEck Vectors Gaming ETF (BJK Quick QuoteBJK - Free Report)

This ETF provides investors with exposure to companies involved in casinos and casino hotels, sports betting, lottery services, gaming services, gaming technology and gaming equipment. It follows the MVIS Global Gaming Index, holding 41 securities in its basket. The product has AUM of $161.8 million and an average daily volume of roughly 59,000 shares. It charges 65 bps in annual fees and has a Zacks ETF Rank #3 (Hold) with a High risk outlook (read: Gaming ETF Hits a New 52-Week High).

Roundhill BITKRAFT Esports & Digital Entertainment ETF (NERD Quick QuoteNERD - Free Report)

This fund offers retail and institutional investors exposure to 35 esports & digital entertainment stocks, It follows the Roundhill BITKRAFT Esports Index, charging investors 50 bps in annual fees. From a country exposure, the United States and China and take the largest share at 26.9% and 22.6%, respectively, while South Korea and Sweden round off the next two spots. NERD has accumulated $111 million in its asset base while trading in an average daily volume of 102,000 shares.

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