Mark Cuban Wasn’t Serious About A Sports Betting Hedge Fund, But These Guys Are
Business Week reports on a sports betting hedge fund out of London seeking to raise 50 million euro in chunks of 100,000 euro (a euro is equivalent to $1.27 US).
Centaur’s Galileo Managed Sports Fund is not really a sports betting fund, it’s more of a sports trading fund, as the fund, for reasons not apparent, closes out their positions on London-based betting exchange Betfair before their winning plays go final in most instances. Strikes me that they’re purchasing an insurance policy that they’re overpaying for, but I’m sure they have their reasons.
While there is no evidence that these guys have an edge that will last, at least they can take a shot. Regulators would not likely look favorably upon such an enterprise in the US. But even if approval were to be granted, there’s no question that such a fund wouldn’t succeed in the US, even in Vegas, as there is a gargantuan difference between the vast European sports trading market anchored by Betfair and the thinly traded American sports betting market. There are opportunities for Americans with the right contacts to bet substantial amounts on football, basketball, and baseball, but the high limits don’t occur until closer to game time, by which point the sharps have taken the value out the best bets.
In the States even large Vegas and online sportsbooks are running scared with low limits on a great many propositions. If you don’t know what I’m talking about, go to Vegas and see the look you get from a sports book manager when you try to bet $500 on a baseball game on the overnight line, or get a bet down on a college football total on a Wednesday, or bet more than a couple hundred bucks on a hockey game. While smart individuals can carve out a nice living betting, the casino corporations would very quickly cut off access to a sports betting mutual fund having any level of success on their way to a nine-figure bankroll.
The exchanges are different, as similar to the Chicago Board of Trade, they permit bid/ask person-to-person wagering with a small commission in the middle. With London having a long tradition of sports betting, Betfair’s low commissions generate substantial liquidity and opportunity.
And sorry, no, you can’t bet through Betfair from the US. Well, unless you get a cashier’s check from………you know, I really shouldn’t shouldn’t write about that, should I?
Incidentally, few realize it, but Mark Cuban was not serious when he suggested the establishment of a sports betting mutual fund a few years ago. He was not looking to launch such a vehicle, instead, Cuban was making a point. He was merely comparing the shrouded-in-secrecy financial markets with the vast amount of information available on upcoming sporting events. In the financial markets you have cooked books, accounting tricks, and sunshiny revenue forecasts. Compare that with the analysis of a sporting event, complete with legitimately generated stats, published injury reports (allowing for Belichickian subterfuge, of course), and video of past performances readily available.
It’ll be interesting to see if the Galileo Managed Sports Fund works, or if it just a bunch of wannabe sharps creating a great new opportunity for Britain’s smartest bettors. But unlike here in the States, at least they have a shot.
