In late May, I’d discussed why I was interested in buying the dip in Score Media (TSX:SCR)(NASDAQ:SCR) stock. This TSX stock rebounded after that dip into mid-June but has since lost momentum. Its shares are down 33% month over month. Today, I want to discuss why investors should be monitoring this TSX stock as a great buy-low opportunity amid the current bout of volatility. Let’s dive in.
Why this TSX stock has made big moves over the past year
Despite its latest dip, this TSX stock is still up 139% from the same period in 2020. The stock started to gain significant momentum in the final weeks of 2020. Score Media came onto the scene as a small player in the gaming space who also boasted a promising digital footprint in the sports media space. However, big strides for the sports betting market in Canada have vaulted this stock to new heights.
The momentum for this stock kicked into high gear with the introduction of Bill C-218. This aimed to amend Canada’s ban on single-game sports betting. Score Media’s management made it clear that it plans to contend for top spot in the Canadian sports gambling market.
Here’s why investors cannot ignore this new Canadian market
On June 22, the Senate approved Bill C-218. The private member’s bill amends Criminal Code provisions around gambling on single sports events. Now, the bill awaits royal ascent to officially become law.
In May 2018, I’d discussed the landmark decision by the United States Supreme Court to strike down a federal ban on sports betting. U.S. lawmakers were spurred by similar motivations. Billions in cash from U.S. and Canadian bettors have gone over to offshore bookies and to the black market in recent years.
This TSX stock holds huge potential in this environment. Score Media already boasts the most popular sports media app in Canada. As far as sports betting is concerned, its main thrust will be in the province of Ontario. The province’s lottery operator, OLG, budgeted for $3.5 billion in lottery and digital gaming revenues for 2020/2021. This company estimates that Ontario has a market potential between $1.5-2.1 billion in annual gross gaming revenue.
The case for buying Score Media today
Score Media unveiled its third-quarter fiscal 2021 results on July 13. The company generated the largest betting handle for a single month in its history at $30.8 million. It reached $73 million for the full quarter. Meanwhile, Score Media also achieved record engagement in Q3, recording just over 470 million user sessions. Total media revenue reached $8.9 million.
In Canada, recent reports estimate that roughly 3% of sports betting is done through regulated online vendors. This means there is a ton of room for growth for Score Media. Canadians should be excited about this TSX stock going forward. The stock last had an RSI of 34, which means it is trending towards oversold territory at the time of this writing. Investors should be watching this TSX stock closely right now and aim for a buy-the-dip moment.
