“If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring.” –George Soros
Over the last twenty five years technology has changed most aspects of our every day life. Investing is one of them. Learning something new has never been easier. New, unconventional asset classes now compete more traditional placements such as land, real estate or gold. Most of us have now heard at least about crypto currenices, start up seeding as well as art placements. Furthermore, as traditional markets behave in an unusual fashion with record low interest rates and unseen political uncertainty, alternative asset classes are much more attractive to investors. One of these is sports betting investment.
First of all, let me explain that there is a sports betting market with bookmakers ( pretty much the equivalent of brokers and market makers in traditional markets) as well as exchanges ( virtual venues where gamblers bet against each other and a central system does order matching). Most people use the above for fun and gambling. Few, look at it as an investment opportunity and apply financial concepts using the existing data to create investment strategies and generate return on capital. Recently, number of hedge funds have started running sports books as part of their strategies. In sports betting as in traditional investment there are number systematic approaches to generate return. Common ones are value betting, when a bookmaker or an exchange incorrectly prices the odds on a given event, arbitrage, when the market is inefficient and there is an odd mismatch between bookmakers and or exchanges, martingale, when you bet double your stake after any failed bet to cover your losses with the next bet’s winnings.
Like traditional investment. You can adopt a do it yourself approach where you do your own research and follow a strategy yourself hoping that you will generate some return on your investment. To do so most people rely on research and technology provided by niche software vendors. They also often purchase a portfolio management system, like the one offer by companies like Betting Metrics. Also, it is possible to place an investment with “a professional” who will manage your investment. The catch here is that as this form of investment is irregulated there absolutely no guarantees whether and how your money will be returned. On the flip side, one thing to remember is that in most countries around the world is tax free.
Investing in sports betting is niche, new and attractive as it offers tax free returns in most cases. There are very few entry barriers, as all you need in most cases is ID, credit card and Internet connection. However, it is worth to always, there is little regulation protecting you as investor. Personally, I think that as with crypto currencies it is a sector to have in your portfolio. In my view it is essential as a balanced long term investment strategy where your exposure is limited to what you can easily afford to lose. What are your thoughts on the strategy? Will be glad to hear your opinion and learn from you so if you feel like drop me a line.
FT on Sports Betting Investment
The Economist on Sports Betting Investment
Sports Trader – an iconic website on the subject
Betting Expert-good guide for beginners
An existing sports betting fund
Boris Grozev is a seasoned fintech executive. Entrepreneur by heart Boris has helped number of businesses to create and implement business development and product strategies. His advisory work in Emerging and Frontier markets has promoted culture and technology change, fostered innovation and lead to tangible results. He invests in variety of asset classes. Boris is a fast learner, whose leadership abilities, ambition, stamina, passion to succeed and attitude naturally spread to others helping to achieve common goals.