Digital pack rips, also known as digital rips, are a booming industry and that could be ripe for the picking by prediction market and sportsbook operators.
In a recent report, Bank of America analysts Julie Hoover and Shaun Kelley note that the nascent industry’s weekly user counts and revenue growth are booming, potentially providing an avenue for some companies to leverage collectibles as a bridge to sports wagering or event contract trading.
“Pack-ripping apps have grown weekly active users from ~50,000 a year ago to more than 1.7 million today, and we estimate the category has already grown to ~$2 billion in annualized revenue,” note the Bank of America analysts.
Digital pack-ripping is the next-generation version of “ripping” a pack of sports cards. In the digital equation, a collector spends as little as $1 or as much as $500 to open a digital pack containing a single sports card. Users can opt to store the card on the platform, have it sent to them in physical form or sell it back to the platform operator.
Wagering Companies Are Already in the Pack Rips Game
As the digital pack-ripping space has grown, so has debate about it being a new form of wagering or if it’s merely “gamified” e-commerce. What isn’t up for argument is that some well-known betting companies are already asserting themselves in the space.
Fanatics makes for logical pack rips leader because the company owns Topps, the largest sports card manufacturer. So with or without its prediction market and sports betting units, Fanatics would likely be involved in the pack rips space and it’d be a leader at that, which it is.
Other examples of wagering entities involved in the pack rips industry include Flutter Entertainment’s FanDuel, which recently inked a deal with Arena Club. PrizePicks and Underdog, which have roots in the daily fantasy sports (DFS) space and are now two of the fastest-growing prediction market firms, also have digital rips exposure. Recently, Crypto.com, which partners with multiple yes/no exchanges while running one of its own, entered the space and it’s rumored that Coinbase Global is considering a similar move.
“Just as prediction markets expanded the [total addressable market] for sports betting, rips could be the next big expansion for gaming and lottery mechanics,” add Hoover and Kelley.
Blurring the Lines
Just as prediction markets have endured accusations of blurring the lines between traditional investing and investing, the same fate could befall digital pack rip firms. In fact, at least a pair of pack-ripping companies stole pages from the prediction market playbook, running ads that digital rips can be used to generate income to cover everyday expenses.
Then there’s the matter of sports card collecting long being a wholesome hobby geared toward kids. It’s possible that if the hobby becomes increasingly gamified or intersects with betting, regulatory scrutiny could materialize.
“As the category grows, it could also come under greater legal scrutiny, especially given the popularity of trading cards with kids,” wrote the Bank of America analysts.
Source link
