Gaming Industry ETF: What It is, How It Works, Examples

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Daniel Liberto
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Updated December 30, 2023
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Part of the Series
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Gaming Industry ETF

Investopedia / NoNo Flores

What Is a Gaming Industry ETF?

Gaming industry ETFs are exchange-traded funds that invest in casino and sports betting companies for the purpose of generating returns that match an underlying index. 

Gaming funds track companies involved with casino and sports gambling, but can also include video games and similar forms of electronic entertainment.

Key Takeaways

  • Gaming Industry ETFs track companies involved with casino and sports gambling, but can also include video games and similar forms of electronic entertainment.
  • One of the biggest gaming ETFs is the VanEck Video Gaming and eSports ETF, which has a portfolio of companies involved in the video game industry, as well as hardware manufacturers.
  • The VanEck Gaming ETF invests in companies involved in casinos and casino hotels, sports betting, lotteries, gaming services, gaming technology, and gaming equipment.
  • Casino and gambling companies are largely dependent on robust consumer discretionary spending.
  • Though gaming industry ETFs offer lower fees and convenient trading, investors should still perform due diligence.

Understanding a Gaming Industry ETF

ETFs are a basket of securities that can be actively managed or track an underlying index. They are similar to mutual funds, but listed on exchanges and trade throughout the day like stocks.

ETFs aim to replicate the returns of a broad market index such as the S&P 500 Index, or they can follow specific sectors such as health care, commodities, or in this case gaming, by tracking a relevant industry index. Gaming ETFs invest solely in companies that generate revenue from gaming. This generally means sports and casino gambling, but can also mean video games and related entertainment.

The fortunes of gaming industry ETFs hinge largely on the health of the economy and consumer discretionary spending. When times are good, consumers can afford to splurge on entertainment such as casinos and sports betting. But when times are bad, they typically refrain from nonessential spending.

Examples of Gaming Industry ETFs

The VanEck Video Gaming and eSports ETF (ESPO) is one of the largest gaming industry ETFs, with over $250 million in assets under management as of December 2023. This thematic fund tracks companies in the business of video gaming and eSports, such as Nintendo (NTDOY) and Roblox (RBLX). It also includes electronics and chip manufacturers, like Nvidia (NVDA) and Advanced Micro Devices (AMD).

Gaming ETFs may also invest in sports and other types of gambling. The VanEck Gaming ETF (BJK) has roughly $46 million under management, with investments in casinos and casino hotels, sports betting, lotteries, gaming services, gaming technology, and gaming equipment.

As of December 2023, the VanEck Gaming ETF held shares in 33 companies. Its holdings included VICI Properties (VICI), a real estate investment trust that owns casinos in Las Vegas; Flutter Entertainment (FLTR), an Irish bookkeeper based in Dublin; and Las Vegas Sands (LVS), a casino and resort company operating in Las Vegas and Macau. 

$702.45 billion

Estimated size of the global gambling market in 2023.

Benefits of a Gaming Industry ETF

Gaming industry ETFs generally offer investors the same benefits as broad market ETFs such as low expense ratios, decent liquidity, flexibility, and tax efficiency. They are traded on major national exchanges and can be sold short or bought on margin.

Investors who want exposure to the gaming sector might consider a gaming ETF rather than putting all their eggs in one basket. However, while ETFs are associated with lower risks and volatility compared with individual stocks, investors should still perform due diligence before buying.

Special Considerations

The goal and function of each ETF, together with the constituents of the benchmarks they track, should be scrutinized to verify they match an individual's investment goals. Costs should be calculated to ensure they don't eat into returns. Though ETFs are considered less expensive than mutual funds, some come with exorbitantly high fees.

Investors should also consider the state of the economy before throwing their support behind the gaming sector. The global lockdowns in 2020 to curtail the spread of the pandemic hit broad swathes of the economy, and casinos and resorts were no exception. In addition, consumers tend to cut back on discretionary spending when disposable income dwindles.

Finally, investors should pay careful attention to conditions and developments in Las Vegas and Macau, two cities where many listed casino companies generate a large portion of revenue. For example, Macau primarily relies on visitors from mainland China. In 2014, China changed its travel rules so that mainland Chinese visiting Macau could only stay for five days, down from seven previously. Share prices of Macau casino operators fell following the announcement.

How Do You Invest in Gambling?

The easiest way to gain exposure to the gambling industry is to invest in an ETF that buys shares of gaming and casino-related companies. You can also buy the individual stocks of companies that profit from gambling, such as DraftKings, although this takes more research and comes with company-specific risk.

How Big Is the Gambling Industry in the United States?

Gambling produces about $60 billion of revenue per year in the United States, according to Statista. This includes publicly traded resort companies as well as private and tribal casinos.

What Are the Biggest Gambling Companies?

The biggest company in the casino industry is Las Vegas Sands, with a market capitalization of over $37 billion as of December 2023. Flutter Entertainment is the next largest with a market cap of nearly $29 billion.

The Bottom Line

A gaming industry ETF is a fund that provides exposure to companies involved in casinos, gambling, sports betting, or other aspects of the gaming economy. These funds allow investors to gain exposure to the wider gambling industry, without having to buy shares in specific companies.

Article Sources
Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.

  1. VanEck. “VanEck Video Gaming and eSports ETF.”

  2. VettaVi. "Gaming ETF List."

  3. VanEck. "VanEck Gaming ETF." 

  4. Yahoo Finance. “Global Gambling Market Report 2023: Players Include China Sports Lottery, China Welfare Lottery, Flutter Entertainment, Maruhan and Tabcorp Holdings.”

  5. Macao Government Tourism Office. “Rules Tightened for In-Transit Mainland Visitors.”

  6. Statista. "Gambling in the U.S.—Statistics and Facts."

  7. CompaniesMarketcap. “Largest Gambling Companies by Market Cap.”

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Part of the Series
Types of ETFs Explained
What's an ETF
  1. Exchange-Traded Fund (ETF) Types and Benefits Explained
  2. 6 Common ETF Types for Your Portfolio
  3. An Inside Look at ETF Construction
  4. Custom Basket ETFs
  5. Single-Stock ETF Definition
  6. Passive ETF: What It Means, How It Works
  7. Actively Managed ETF: Meaning, Overview, Limitations
Types and Details
  1. Index ETF: Definition, Types, Advantages, and Risks
  2. Smart Beta ETF: Definition, Types, Example
  3. Diamonds ETF: Meaning, Popularity, Statistics
  4. No-Fee ETF: What It Means, History, Criticism
  5. Dividend ETF: What it Means, How it Works
  6. Value vs. Growth ETFs: How Do You Choose?
  7. Benefits and Risks of Thematic ETFs
  8. Factor ETFs: Meaning, Effectiveness, Examples
  9. Benefits of a Covered Call ETF
  10. Leveraged ETFs: The Potential for Bigger Gains—and Bigger Losses
  11. Ultra ETF: What It Means, Benefits, Limitations
Equity Funds
  1. ETFs For Sector Rotation Strategies
  2. What Is a Sector ETF, How Do You Invest in One?
  3. Services Sector ETF: Meaning, Examples, Pros and Cons
  4. Airline Industry ETF
  5. Auto Industry ETF: What It is, How It Works, Example
  6. What Common ETFs Track the Banking Sector?
  7. Which Leveraged ETFs Track the Banking Sector?
  8. Biotechnology ETF: What It Is and How To Invest
  9. Communication Industry ETF Definition
  10. Food Industry ETF: What It is, How it Works, Pandemic Impact
  11. Gaming Industry ETF: What It is, How It Works, Examples
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