Brainstorming: Sports Investing

For this brainstorming I want to assume that our end goal is to invest in sports. Either a specific league or a specific country having an uptick/downturn in sports viewing and revenue over a long time period. Aside from investing in some of the teams that have publically traded stocks can you think of any other ways? I’m specifically intrested in pro sports and not as much in the spillover they have into the everyman’s recreational sports team spending.

Don’t have an opinion on this but I saw an article on Fantex the other day where you can buy a share of an athlete’s future earnings.

Not exactly the same thing, but you’ll soon be able to buy stock on Arian Foster:

http://www.forbes.com/sites/darrenheitner/2013/10/17/will-you-soon-be-able-to-buy-stock-in-arian-foster/

Intrade used to do this. Liquity was an issue as well as counterparty risk.

I paid for my MBA via a relative value strategy in sports betting.

The new frontier, though, is betting on daily Fantasy if you’re sharp on modeling.

Explain.

http://www.analystforum.com/forums/cfa-forums/cfa-general-discussion/9642602?page=1#comment-91469374

You can make small risk-free money (due to betting limits) by finding lines that are significantly deviated from the market (enough to cover the juice and then some) and then betting both sides (the deviated line on Team A, and the market line on Team B)… but this is too small-time to really bother with. If you leave yourself unhedged – (i.e. just betting the deviated line on Team A) you will make money over the long-term, although from day to day there will be some big swings up and down. I used a Half-Kelly strategy (Google it) to stake my bet size. The biggest problem is that books don’t like winners – and you will eventually get booted from everywhere that you play. That eventually ended my run – plus I felt that the website that I used as a proxy for the market could sometimes be prone to manipulation, which also led to declining profits.

Like I said the new frontier is daily Fantasy. I’ve been working on a model for betting daily Fantasy NBA… but it’s still under development.

I guess you can’t run a half-kelly strategy very well if there are small betting limits.

I’m not sure how small betting limits translate to risk-free money, unless you mean that you can only lose a trivial amount (which isn’t really risk free, but I’ll accept that “trivial” might mean “effectively no risk”). Or does it mean that you’ll lose money but if you keep playing, your half-kelly strategy will always replenish what was lost? In any case, something needs explaining here…

The limits aren’t small – I could oftentimes get down up $2K per side and sometimes more.

If the market price is Team A at +120, and I could find a deviated line of Team B at -110 then that’s an opportunity. You could make risk-free money by betting both sides… but I never did that – I would just go naked with Team B at -110.

You can grind the math and figure your edge, and from there use the Kelly formula to stake your wager. Higher edges --> bigger bets… Thinner edges --> smaller bets.

My limits would frequently get cut and then I would get banned outright – so it wasn’t very sustainable long-term.

article on daily fantasy betting

http://articles.latimes.com/2013/jul/12/business/la-fi-fantasy-sports-20130712