Sports Gambling Investment Fund
- Dozens of people across the U.S. Have invested more than $1 million in six sports betting funds all run by a Las Vegas resident who claims to have the secret sauce to crushing local books.
- BETZ Fund Description. BETZ tracks a tier-weighted index of global companies selected by committee that are involved in the sports betting & iGaming industry.
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.
– Sports Gaming Investment Fund (SGIF), which is focused on startups that support the emerging U.S. Market for legal sports betting; and – Vice Ventures, a fund dedicated to investing in. What the New Sports Book Investing Law Permits Section 3 of SB 443 allows a “business entity,” once registered with the Gaming Control Board and after payment of the $1,000 registration fee 7) with $500 due each of the following years to place wagers on sporting events.
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.
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.
Sports Gambling Investment Funds
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.
While hedge funds are widely known investment vehicles, sports betting entities that bet their client’s money for returns that can even beat the stock market are less known. However, given an almost decade-long era of low interest rates the search for optimal returns on investment is leading many trades to consider sports betting as an attractive addition to their portfolio.
We spoke to an insider within the niche business of a sports betting hedge fund to understand how they operate and the practicalities of maintaining an edge trading sports.
Sports Betting Investment Fund
Question: What is a sports hedge fund?
Answer: Sports hedge funds are companies that bet on sports markets for a profit, treating them exactly the same as traditional asset classes like shares or currencies. Most of the traders within the company have no interest or practical understanding of sports, (we have previously written about this as the Green lumber effect) but what they do know is how to build algorithms to trade sports betting markets and run them on to generate profit.
Question: Can you provide an example of how they get an edge?
Answer: They leave no stone unturned in gathering insight. For example they employ teams of ‘watchers’ to gather both objective and subjective live match data. This literally involves watching soccer matches every day and submitting in-play reports every ten minutes. Apart from key data such as corners and half-chances, they also watch out for any factor that could affect the result; weather conditions, the manager’s mood, the reactions of the crowd.
Sports hedge funds operate on word of mouth and contacts and have a small but very significant investor pool.
Question: What is the hierachy?
Answer: There are four main departments. The watchers are feeding in the live data. The analysts work along with the traders on analysing the incoming data and placing the bets. And at the very top are the quants – the model builders. As with Wall Street or London’s Square Mile, these guys have PhDs in mathematics or physics. They rarely have any interest in sports. Their focus is building smart enough algorithms to maintain an edge and make the company profits.
Question: How was the working environment like?
Answer: I was sitting in an open office with no more than 25 people. It was a quiet environment, full of monitors. Everybody was plugged into their headphones. Making or losing a couple of million on a game was just the order of the day.
Question: Who can invest money in Sports Hedge Funds?
Answer: Sports hedge funds don’t operate a counter service or run traditional marketing campaigns. They operate on word of mouth and contacts and typically have a small but very significant investor pool. When you invest so heavily in building an edge, you have to spend an equal amount of energy protecting your methods and deciding who joins the investment pool.