Sports Betting Investment Market
The NFL sports betting industry is a major investment market for a limited number of successful traders. Alternative investment markets are a popular destination for investors with excess cash waiting for a decent return on investment. Most stocks are tied into the economic news with no parameters and direction. It is becoming more difficult for even savvy investors to time the bottom. They have to become much more selective.
The sports betting market has been around a long time with some controversy in the earlier years. However, there is a vibrant market in today’s highly competitive sports arena. The regulated Nevada sports books have the monopoly on legalized sports betting. Can the amateur recreational bettors make money at these books — sometimes, but not in the long run.
The professionals know how to look for the edge and only need to hit a minimum of 54% to make a modest return on investment. Making a 15% to 25% return for the year is very possible. The good ones are few but the results are quick and opportunities exist everyday when soft betting lines are found and exploited. The betting lines are made to divide the betting public. They ideally want even betting on both sides. Their number does come close about 60% of the time. Their recent Superbowl line was not even close and they had the wrong team – Carolina Panthers – with too many points.
This happens a lot in all sports. They do provide a good service but their stats and computer models can only go so far. Investments in this area have a limited scale and cannot handle the millions or billions that pour into those other markets. But investors with up to one million can see a very nice return with the right professional.
The biggest competitor to these legalized sports books is the internet. The reputable online sports books were growing very fast until the Port Security Bill was passed with the Illegal Internet Gambling Act attached. One had nothing to do with the other. It was a disaster for many publicly traded gaming companies overseas and the US betting public. Hopefully, it will be repealed and a regulated online gambling bill will pass some day — but don`t hold your breath!
The betting investment options on the internet – if it becomes legal – are numerous and sophisticated. The newest formats are the betting exchanges and spread betting in the UK where internet gambling is legal. These new betting formats have many angles to invest in and do provide an edge if you know what to look for.
When the regulatory cloud over this industry is removed, you will see investment vehicles similar to the hedge funds and derivatives that are available in the other investment markets. The tax revenues could be in the millions if this market becomes regulated and legal. For now, it seems Nevada still has a lock on this market. But the demand and growth of the sports betting industry is a real trend. The legal Nevada sports books accept a small fraction of the worldwide betting handle.
More time is needed to process legislation and most states need the tax revenue. I am sure most sports bettors would accept a small tax if legalization is approved — maybe a value added tax (VAT) of 1% or less on bet amount. The one major problem could be over regulation and stupid government rules and red tape that usually hinder any new legislation. Until then, I guess Nevada is the only game in town. Viva Las Vegas !!