Sports Gambling Investment
Start with the credibility of the sports betting investment thesis, which is more important than timing because rookie ETFs can overcome bad timing. Put simply, the sports gambling and iGaming. Sports betting is also an absolute investment, you either win the entire profit or lose all your capital. The stock market is an ongoing investment with dynamic profits and losses tied to the business’s and economy’s performance. Another key difference between sports betting and investing is the expected return.
Allen noted that while U.S. Sports gambling revenues are expected to surpass $800 million this year from $249 million in 2017, gaming stocks are lagging the broader market since the Professional.
Sports betting hedge funds may be the investment tool of the future.
It was only a matter of time that the suits on Wall Street noticed the massive financial opportunities provided by sports betting.
In the last few years, sports betting has seen a meteoric jump in popularity and acceptance among mainstream society. Hedge funds have also been shown to be both incredibly volatile and extremely lucrative.
It makes total sense that the two worlds would meet and present investors with the chance to cash in.
Alternative Investments
Hedge funds are nothing new to those familiar with the investment game. These alternative investments use a pool of funds collected from investors to go after a high yield return.
These “hedge funds” don’t receive the same regulations and oversight as your typical mutual fund. If you are in the market for a safe, low yield investment option, hedge funds are not for you.
Using the pooled money and spreading investments around these high risk, high reward investments mitigate some associated risks.
Only accredited investors are allowed to operate hedge funds. This is where the two worlds collide.
NBA Owner Has a Bright Idea
Billionaire businessman Mark Cuban initially pitched the notion of sports betting hedge funds in the early 2000s. You can imagine the attention this garnered from the business world.
Cuban remains well respected in the business world and the sports world. The Dallas Mavericks team owner and star of the hit show Shark Tank would be the clear choice for launching a sports betting hedge fund.
Unfortunately, the NBA had other ideas. You see, Cuban’s role as a team owner excluded him from being allowed to follow his vision to execution because of the league’s bylaws prohibiting him from gambling.
It’s too bad that he couldn’t follow through because the reasoning is sound. Cuban contended that sharp sports bettors are successful due to the fact that they have much more information about the teams involved.
Think about how much or little you know about the companies represented in your 401k or other mutual funds. I bet that you are far more familiar with your favorite NFL team.
There’s no shame in that. Far more people could name the Packers starting quarterback than the CEO of PepsiCo. Cuban understood this fact, and he knew that the potential return on sports betting is massive.
His contention that sports betting could see much more expected value with possibly less volatility didn’t fall on deaf ears. Although Cuban himself was forced to miss out, the idea was implemented within 5 years of introducing the notion.
Ideal Strategy for Today’s Climate
If 2020 has taught us anything, it’s that sports will find a way. Through economic turndown and political turmoil, sports will always thrive. Why do sports always succeed in the face of global pandemics or large scale financial disaster?
Because we demand it, and the money at the top of each league wields enough power to ensure the dollars continue pouring in.
COVID-19 shutdown the entire NBA on March 11, 2020. Much of the country followed. This mass closing included bars, restaurants, and theaters.
It also spurred the suspension of the NHL season and postponed MLB Opening Day. However, by July, NBA players were back in action.
The NHL followed and is currently deep into their Stanley Cup Playoffs. MLB is in full swing, having completed over half of the shortened 60+ game season.
The NFL is King Kong when it comes to revenue in the world of sports. That status translates to the NFL sports betting market as well.
The NFL was forced to cancel their preseason, but the league is scheduled to start in less than two weeks. The most blatant display of the power of professional sports is the following point.
Texas Governor Greg Abbot, the same man that has hamstrung small business by shuttering thousands of small local bars throughout the state, has given Jerry Jones and the Dallas Cowboys the green light to have fans in attendance when play begins.
In a world where many businesses are shut down completely, sports’ big business continues to fill the coffers.
The fact that sports exist in the face of a global pandemic shows what an excellent investment it can be. Airlines have struggled mightily, oil prices have dipped, and the S&P 500 has resembled an EKG reading.
Yet, there are plenty of games to bet on. Sports don’t care what the NASDAQ is doing. The show must go on. That’s enough for sports betting hedge funds to make tremendous earnings for its investors.
Sports Gambling Investing
In short, sports betting hedge funds are mostly recession-proof.
Hedging Your Bets
Hedge funds are, by their nature, incredibly volatile. After all, the investors that shop hedge funds are looking for massive returns on their money.
That potential for huge gains comes with substantial risks. These risks are not altogether vanquished by choosing a sports betting hedge fund.
In years like 2020, the hedge funds that focus on volatility should be theoretically shredding when it comes to profits. Yet many have been enduring catastrophic failures.
In fact, sports betting hedge funds should be able to generate significant gains without market leverage. This largely eliminates the great downsides associated with other alternative assets.
Sports betting hedge funds aren’t immune to this volatility, but they are less likely to endure the pitfall. That is contingent on the responsible management of the funds available.
Hits and Misses
Centaur Galileo provides a cautionary tale for both investors and possible clients. Initially, the company’s earnings were exceptional. Many felt that Cuban’s vision incarnate was bound for a bright future and many millions in returns annually.
However, there was a storm brewing on the horizon. The newly minted firm shot for rapid expansion, going so far as to open a dedicated training center for fresh analysts.
In a short three years, the company went from the peak of being on the leading edge of the innovative investing strategy to being completely dissolved. Investors were out over $2,500,000 when the doors closed on the eager project.
Don’t be frightened into a mindset that all of these sports betting investments are doomed to fail.
Priomha Capital Group came on the scene about one year after Centaur Galileo with far less fanfare. The Australian firm hasn’t blown anybody out of the water with insane claims of 30% ROIs. They have quietly impressed their clients and onlookers with a return of over 16%.
Most impressive is the fact that they’ve averaged that return for almost a decade. That’s the type of investment that just about anyone with funds to grow would jump on.
That’s more than doubling your money every five years. You won’t be getting that type of return on your typical IRA.
Priomha Capital Group has impacted sports betting hedge funds by playing smart and executing excellent bankroll management.
Are Sports Betting Hedge Funds Right for You?
Savvy investors have made some beautiful profits on sports betting hedge funds. They clearly understand the risks associated with this kind of alternative asset.
Let’s not get so swept up in all of the potential money flooding through the door. Some investors have lost huge sums on the risky investments.
Suppose you are looking to make an investment where you can earn significant profits and are not opposed to the apparent risk. You may quickly see your account double in size.
Each of us is as unique in our investment strategies and styles as we are in our gambling. My advice is to speak to a professional wealth management consultant and make a plan that suits you as an individual.
Conclusion
Sports betting hedge funds combine the fiscally responsible aspect of investing and the fast-paced lucrative nature of sports betting. Gaining a somewhat shaky start as an NBA owner’s brainchild, these alternative investments have established themselves as viable investment portfolios.
I’m eager to see what the future holds for sports betting hedge funds. It’s far past time the rest of us enjoyed Billy Walters-like success in the sports betting game.
Sports betting is traditionally seen as a gamble, and most people who bet on sports are certainly gambling. Our approach here at ScoreMetrics is different – we look at sports betting as an investment.
Let’s define the terms. Investing is the act of allocating capital to assets with the goal and expectation of generating a profit. Good investing involves research, risk analysis, managing capital responsibly, and diversifying investments. Successful investors follow a long-term strategy or a system that matches their goals and tolerance for risk, and they follow that system non-emotionally.
Gambling, on the other hand, is staking money in uncertain outcomes that involve a high amount of chance. In other words, gamblers mostly rely on luck instead of research. Most people gamble for fun here and there.
Investing is often associated with the stock market or with real estate. Gambling comes to mind when we think of casinos, poker games with friends, and betting on sports.
But it’s certainly possible to gamble in the stock market. Making uninformed trades in hope of turning a quick profit is not investing – it’s gambling. And as you probably guessed by now, it’s also possible to invest in sports betting. Having a proven system in place and acting strategically and non-emotionally is investing, not gambling.
In this report, the ScoreMetrics Lab gives you an overview of sports betting as an investment and draws comparisons to the stock market.
When you look at them at their most fundamental, base level, sports betting and the stock market reward players for successfully predicting the future. Much like the stock market, successful sports betting isn’t all about wins and losses (ie. stock prices going up and down). It’s about following a system that generates profit over an extended period of time.
It’s not considered a win if you bought stock in Amazon last week and the stock price is up 5% today. You’re not cashing in and telling all your friends that you’re a winning investor. Just like you won’t call yourself a loser if the stock went down 5% the next week.
Instead, you’re following a strategy. Maybe you believe that Amazon will beat the S&P 500 returns over the next 5 years and that’s the minimum amount of time you’re going to hold on to the stock. You probably have a bunch of other stocks in your portfolio as well that share a similar investment hypothesis.
In similar fashion, following a sports trading system is not about the individual wins or losses of a single trade. You’re executing a number of trades based on your investment hypothesis, and you’re measuring success over a long period of time – for a full season, for example.
Successful long-term investing in sports requires diversified systems, an intricate unit allocation model, careful bankroll management, keeping detailed records, a cool head, and constant>
Sports books have a lot of similarities to the stock market. They are marketplaces where investors have the opportunity to invest capital in future results. And just like in the stock market, there are loads of those opportunities available and most of them aren’t that great. Investors need to be smart about choosing their spots.
In essence, bookmakers act as marketplaces that take bets on both sides of contests and make their money by taking a “vig” off of each trade. They use various models to calculate probabilities for each result and adjust their odds accordingly.
This is pretty similar to futures or options in the stock market, which investors often use to speculate whether a stock price will go up or down over a certain period of time. The marketplace offers investors the chance to “bet” on both sides and takes their cut in form of a fee for each trade.
So where are the good opportunities in the sports betting market?
At ScoreMetrics, we find these by exploring hundreds of hypotheses and conducting thorough research to find out if we have something in our hands that meets our rigorous criteria. We create rules, analyze every piece of relevant data we can find, and backtest our theories to make sure that they’re profitable over long periods of time.
To quote our very own John Todora from his new book, “Zero Correlation Investing – The Score Metrics Secret”:
”In short, ScoreMetrics is a method of speculating on sports in the same way you speculate on stocks, but, just like with other investments, the method uses back-tested analytics to find patterns that show a significant return on investment (ROI), while limiting risk.”
The book is on sale for a limited time, so now’s a great opportunity to dig deeper and learn all you need to know about sports betting as an investment.
Also make sure to keep coming back to https://sportstradingsystems.com/ for regular quality analysis on current sports investment topics – we’re here for you!
Sports Betting Investment Thesis
The ScoreMetrics Lab is the engine that runs the Sports Trading System operation, consisting of a team of researchers and writers who are constantly testing and retesting algorithms. They work hand in hand with our Head Trader and Creator of ScoreMetrics, John Todora to help find new breakthroughs and develop new systems.