Canadian Pension Plan Investment Board Buys Stake in Sportradar

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The Canadian Pension Plan Investment Board (CPPIB), the largest investment organization in Canada, has decided to buy a stake in Sportradar. This is part of a growing trend by pension plans and Exchange-Traded Funds (ETFs) to include gaming companies as part of their overall portfolios. Sportradar is a data mining company that reports and distributes data from professional sports to gaming companies for the purpose of creating odds and reports for sports betting.

The Investment Board

CPPIB, which is responsible for the pensions of 20 million Canadians, accepts contributions required by Canadian law from workers who are 18 years old and older. While the pension plan has around since 1966, the plan relied only on contributions from members until 1996. It was then that government officials realized an investment plan was necessary to allow the contributions to grown large enough to distribute to people once they reach retirement age. Increasingly, the investment board has diversified its portfolio to include stocks, bonds, and ownership or partial ownership of companies, not only in Canada but around the world. Currently, the pension plan overseen by CPPIB has a portfolio worth nearly $40 billion.

The Sportradar Purchase

Sportradar, which is a Swiss company, was founded in 2000 to collect and analyze sports data. The company, which has posted revenue of more than €200 million, has 35 offices in 24 countries. Sportradar has a sports integrity branch that monitors cheating in sports, as well as a content and betting service for gaming organizations. It uses statistics in order to report news on sports teams and make odds of whether teams will win or lose matches. The company has many major sports leagues and gaming companies that rely on it for information.

Based on projections that the company will continue to grow, the investment board has contracted to buy 39 percent of Sportradar The projected growth in sports gaming in the United States is because of the recent U.S. Supreme Court ruling that overturned a 26-year-old federal law. The court’s decision allows states to decide for themselves whether to allow sports gaming. The company currently has an estimated value of $2.4 billion, and its growth rate has been around 40 percent per year for the last five years.

Implications for the Future of Gaming as an Investment Vehicle

The implications for investment in gaming companies has grown exponentially because of the worldwide recognition that gaming can be a profitable investment vehicle. Many gaming companies have been in business for 25 years or longer. And, there is also the knowledge that gaming continues to grow and expand into new countries that previously did not have it.

Like the gaming companies, other companies, such as Sportradar, which are in the business of delivering a service to gaming companies, have also seen auspicious growth. They are expected to outpace gaming companies in relation to sports gaming, which is expected to become a multibillion-dollar market in the United States within two years.

CPPIB has continued to diversify its holdings, balancing its rapid, more aggressive growth areas with conservative investment. That means its purchase of a portion of Sportradar indicates it is preparing for an enormous benefit from the sports data company in terms of investment growth for its contributors. This notion of increased growth is particularly important given the future needs of the population. The majority of Canadians are currently in the 45-year-old to 64-year-old age range and are close to retirement age. That means the pension plan must be prepared ahead of time to meet the needs of future Canadians.

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Jean Carter is from Oakland, California and studied jewelry design at the Fashion Institute of Design and Merchandising in San Francisco, California. After graduation, and pining for a warmer climate, Jean relocated to the Tule Springs suburb of Las Vegas, where she owns and operates her own online jewelry boutique incorporating traditional native American styles with her own unique designs. A true fan of the sophistication and glamor of Las Vegas casino life, Jean is also a freelance blogger specializing in all things suave and fashionable surrounding the casino lifestyle.