Beyond the jersey-wearing, drunken frat boy antics there is a master mind approach to business for Dallas Mavericks owner Mark Cuban.
Roughly six years ago, Mark Cuban caused quite a stir when he announced on his blog his intentions to launch a sports betting hedge fund. He went on to validating an argument that betting on sports, due to the amount of information available, was much easier than being a player in the stock market.
The Sports Gambling industry has never officially been able to tally up it’s yearly worth – but rough estimations slate this booming industry at 300-billion annually.
Those staggering numbers illustrate why Cuban wanted in. Unfortunately, a whole bunch of obstacles, including the NBA’s bylaws that prohibit those in the league from being involved with gambling be-headed his idea.
Just because Mark Cuban couldn’t advance his idea, we live in a world where great ideas don’t go away forever…
Soon, an investment company in London named Centaur has just launched it’s Sports Betting hedge fund called Galileo. The managers analyze and trade the betting markets, taking the emotion out of the betting game and put a quantitative analysis in its place.
Tony Woodhams, managing director of Centaur said: “We have unique software we’ve written over five years that ensures we purely trade on statistics and probabilities. The process is very clinical, which is our edge.”
Woodhams went on to second Cuban’s notion when he said that the sports market has more inefficiencies (mispricing) than the stock market to capitalize on.
Being in the industry myself, this is an obvious conclusion the two have agreed upon. With that said Bookmakers don’t often set the best lines for every game in terms of mathematical numbers. The general idea of a sports book that sets wagering lines is to get split, 50-50 action on both teams involved in a particular game. Granted this doesn’t always work out, and books too have an invested interest in who wins or loses but; generally this is the concept. You ask how do Sports Books make money then? Well, it makes money by charging a 10% Vig. So when you go place your wager you are paying that 10% up front on the amount you chose to bet. They have no problem paying me the winner $100, if they are taking $110 from you, the loser.
There are many skeptics to the Galileo’s hedge fund but, Woodhams says the sports hedge fund’s projected rate of return is 15 to 25 percent. That’s after fees, which include a 3 percent management fee and a hefty 30 percent performance fee on net profits.
Personally, I think it’s a flat out joke with those guarantees/projections, and fees. Further more, with them doing the investing for you – how is it possible to move that amount of money on a single game for all of it’s clients? If they had say… just a measly 100 clients that moved $5,000 a game, who would accept a $500,000 wager on a random Tuesday night on game #63 of the NBA when the Kings play the Clippers? If they did have something set up where they disperse the funds to different sports books, as soon as one casino took the action the others would be alerted and adjust their lines accordingly before they were able to get down more money at the proceeding books.
In an industry that I will fully admit doesn’t have many regulations – specially outside of the United States, I would be very careful with this. Rumor has it this hedge fund is only viable for non U.S. residents with hopes for U.S. expansion in early 2011.
This industry has the potential for any Sports Advisor or Handicapper to make hand over fist if they are going about things the correct way, and making their clients money. Whether it’s a single man operation or a large hedge fund this industry has the potential to yield huge profits. I can’t speak for anybody else, but I know the type of success we have at this very website, and the cost isn’t remotely close to that of a hedge fund – and our profits are far greater. We accommodate to everybody. From the first time sports bettor moving $50 a game, to the guy who is moving $10,000 a game – winning is winning, and that is what we do better than anybody else, bar none!
PayneInsider.com is living proof of this – we are here to accommodate your every sports betting want, and need. PayneInsider.com is the #1 sports handicapping service on the internet. Here at PayneInsider we provide daily selections with complete research, analysis, and insider information. We also are among the best in the industry at setting you up with strict guidelines to managing your money (Bankroll). In an uncertain industry, be a part of something certain. We are in the top 1% of all sports handicappers in a 300 billion dollar industry each year. That’s an elite group that makes consistent profits betting sports, and we are proud to be in such an elite class. The other 99% of the betting community are consistent losers; you make the choice of what team you want to be a part of…