There are so many fantastic reasons to put a portion of your investment capital into sports investment. This very exploitable market generates hedge-fund like tax-free gains, as a super-charged wealth building option that is nowhere near as speculative as you would think.
For those totally uninitiated in aspects of sports and wagering, almost every professional sporting contest around the world has a betting market, (often many betting markets) attached to it, where individuals individuals can take a financial interest in the income.
Due to the large amounts of markets for one contest, and increasing numbers of bookmakers creating those markets, organized groups can strategically and systematically outperform this market.
Key factors that make this market more attractive than stock investing include:
Smaller numbers of sophisticated investors: The average participant in a sports investing market is an individual who is "betting", either on his favorite team or as a means of enjoyment while watching the game on a Friday or Monday night. Unlike stocks and share and forex trading, sports betting markets are not seen as the domain of an elite and privileged investor. Therefore, the majority of the money being directed towards say – a football game – is less informed, under-researched, and opinion based. Hard working sports investors thrive where these "gamblers" fail.
Increasing amounts of betting options: The proliferation of online bookmaking companies has responded in a much tighter margin surrounding the sports markets. Framing markets for sporting contests used to reward the bookmaker with a hefty margin for merely offering the market – which is now no longer the case. Many bookmaking duopolies and monopolies have broken apart, with small and large operators offering great value markets for investors.
Betting exchanges have also changed the greater landscape, with a more "stock market" type approach to sports betting markets now available. In this format, margins are basically eradicated, save for a small win tax, and the opportunity to "lay" (act as the bookmaker) gives the opportunity for hedging out to a guaranteed profit on an event.
Greater Transparency: Where sporting teams are concerned, much of the important information is contained in the performance of the teams themselves, and injury concerns – which are often known. In financial markets, huge risk can exist where pivotal information (such as lies concerning a company's profitability – or debts) can be understood and / or privy only to insiders. The perception of a stock as being "safe" can never be guaranteed, and the impact of falsified financial statements vis a vis Enron – is far more crippling than any one piece of information that can be understood and then impact a sports betting market.
So … What returns are possible? Anyone with knowledge of the inner sanctum of a bookmaker's office knows that the "smarts" or "sharps" – or whatever you want to call them – the professionals, will beat you long term and can really impact your bottom line. Returns as high as 20 +% POT (Profit on Turnover) or 100% ROI (return on investment) per year are absolutely achievable for these groups. Losses are possible in limited stretches, but annual returns are generally dependable.