Finding an Edge in Sports Betting: Contrarian Sports Investing

Many folks enjoy sports, and sports fans often enjoy putting wagers on the outcomes of sporting events. shed dollars more than time, creating a negative name for the sports betting business. But what if we could “even the playing field?”

If we transform sports betting into a additional business-like and professional endeavor, there is a higher likelihood that we can make the case for sports betting as an investment.

The Sports Marketplace as an Asset Class

How can we make the jump from gambling to investing? Functioning with a team of analysts, economists, and Wall Street specialists – we often toss the phrase “sports investing” around. But what makes a thing an “asset class?”

An asset class is generally described as an investment with a marketplace – that has an inherent return. The sports betting planet clearly has a marketplace – but what about a source of returns?

For instance, investors earn interest on bonds in exchange for lending dollars. Stockholders earn long-term returns by owning a portion of a firm. Some economists say that “sports investors” have a built-in inherent return in the kind of “threat transfer.” That is, sports investors can earn returns by helping deliver liquidity and transferring risk amongst other sports marketplace participants (such as the betting public and sportsbooks).

Sports Investing Indicators

We can take this investing analogy a step further by studying the sports betting “marketplace.” Just like a lot more traditional assets such as stocks and bonds are primarily based on value, dividend yield, and interest prices – the sports marketplace “price tag” is based on point spreads or funds line odds. These lines and odds adjust more than time, just like stock rates rise and fall.

To further our objective of creating sports gambling a far more business enterprise-like endeavor, and to study the sports marketplace further, we collect various added indicators. In certain, we collect public “betting percentages” to study “cash flows” and sports marketplace activity. In addition, just as the financial headlines shout, “Stocks rally on heavy volume,” we also track the volume of betting activity in the sports gambling marketplace.

Sports Marketplace Participants

Earlier, we discussed “threat transfer” and the sports marketplace participants. In the sports betting globe, the sportsbooks serve a comparable purpose as the investing world’s brokers and market-makers. They also often act in manner comparable to institutional investors.

In the investing globe, the basic public is recognized as the “modest investor.” Similarly, the basic public normally makes little bets in the sports marketplace. The tiny bettor often bets with their heart, roots for their favorite teams, and has particular tendencies that can be exploited by other market place participants.

“Sports investors” are participants who take on a related part as a market-maker or institutional investor. Sports investors use a organization-like strategy to profit from sports betting. In impact, they take on a threat transfer part and are able to capture the inherent returns of the sports betting industry.

Contrarian Methods

How can we capture the inherent returns of the sports industry? One method is to use a contrarian approach and bet against the public to capture value. This is one cause why we collect and study “betting percentages” from several key on the net sports books. Studying this data permits us to really feel the pulse of the market action – and carve out the overall performance of the “basic public.”

This, combined with point spread movement, and the “volume” of betting activity can give us an thought of what different participants are undertaking. Our study shows that the public, or “modest bettors” – ordinarily underperform in the sports betting sector. This, in turn, enables us to systematically capture value by using sports investing strategies. Our goal is to apply a systematic and academic approach to the sports betting business.