There has been an explosion in sports trading and betting in the last number of years. Many people from all walks of life use the exchanges to generate an income or build their own pension fund. The growth of online trading exchanges such as Betfair, the accessible nature of information for even the most obscure sports events and the global economic recession have all contributed to a huge rise in betting and trading.
Sports betting is largely viewed now as an alternative investment to traditional methods such as the stock market and property. With both of these suffering severe volatility over the last number of years, people have started to look on sports trading as a viable investment avenue or to simply supplement their own primary income.
Advantages Of Sports Betting
The advantages of sports betting and trading are significant and attractive to many. Money earned from sports trading is essentially tax free. People also like being in the position of control with no stockbroker to deal with or hedge fund manager to control your financial destiny.
It is also alot more fun. If like me, you are a big football fan, the idea of making money from the sport you love is remarkably appealing.
There is also the instantaneous nature of profit creation. If you invest in shares, commodities or property, a majority of the time you will have to wait a prolonged period before seeing profit, if any at all. In trading or betting, your opportunities to profit are many on a daily basis.
Information Is Power
Information is the most vital ingredient to any speculator. If he/she is investing in shares in a company, the right updated information about that company is essential in making a decision to invest or not. You may only learn about a company's performance on a quarterly basis when it releases its financial results and there is often a lack of real transparency with public limited companies.
If we compare it to sports, for example a football team, its performance is constantly monitored on a game by game basis in the media. Reports of matches, league ladders, injuries/suspensions, statistics are widely available and of course you can go and observe a team at close quarters at a match yourself. That level of scrutiny does not apply to public companies who can often use some ''creative accounting'' to hide details from the public eye.
Sports betting/trading is also recession proof and is not subject to the prevailing economic conditions of the day. It is a significant advantage over more mainstream investments.
The Future Of Sports Betting
Sports hedge funds are probably something we are going to see more of in the future. London investment company Centaur launched the first ever sports hedge fund in 2010. Centaur Galileo employed state of the art software to give them the edge in statistics and probabilities and promised significant returns.
Centaur ultimately proved to be a disaster as the fund collapsed earlier this year citing ''sheer bad luck'' in a letter to stricken investors.
Australian group Priomha Capital have been more successful and claim to be the world's Premier sports hedge fund. In 2010, Priomha Capital Cloney Multi-sport investment fund reported a return of 43.10%. In 2011, the fund reported a 52.35% return and they have plans to extend its operations overseas.
It only takes one success for interest and demand to grow. Do not bet against Sports hedge funds being part of the future.
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