Sports are enjoyed by many people. Many sports fans enjoy placing bets on the outcome of sporting events. The sports betting industry has a bad reputation because most casual sports bettors lose their money over time. What if we could “even out the playing field?”
It is more likely that sports betting can be considered an investment if it is made into a business-like, professional venture.
The Sports Marketplace is an Asset Class
How do we go from gambling to investing? We often use the term “sports investing” when working with Wall Street professionals, analysts, economists and Wall Street professionals. What makes an asset a “asset class”?
Asset class is often defined as an investment that offers a market – and has an inherent return. There is no doubt that the sports betting industry has a market. But what about a source for returns?
In exchange for loaning money, investors can earn interest on bonds. By owning a percentage of a company, stockholders can earn long-term profits. Economists believe that “sports investors have an inherent return in the form risk transfer.” This means that sports investors can make returns by providing liquidity and risk transfer among other participants in the sports market (such as the betting public or sportsbooks).
Indicators for Sports Investing
This investing analogy can be extended by looking at the “marketplace” for sports betting. Like traditional assets like stocks and bonds, which are based upon price, dividend yield and interest rates, the “price” of the sports market is determined by point spreads and money line odds. These lines and odds can change over time just as stock prices fluctuate.
We collect additional indicators to help us achieve our goal of making gambling more business-like and to better understand the market. We collect public “betting percentages” in order to study “money flows”, and the activity of the sports market. We also monitor the volume of sports gambling activity, as per the headlines in financial media.
Participants in the Sports Marketplace
We have already discussed risk transfer and the participants in the sports marketplace. The sportsbooks in the betting industry serve the same purpose as market-makers and brokers in the investment world. Sometimes they act similarly to institutional investors.
The “small investor” is a term used to describe the racing sbobet general public in the world of investing. The general public also often places small bets on the sports market. Small bettors often place small bets because they are loyal to their favorite teams and have certain tendencies that other market participants can exploit.
Participants who play a similar role to institutional investors or market-makers are called “Sports Investors”. To make money from sports betting, investors adopt a business-like approach. They act as risk-transferrs and can capture the inherent returns from the sports betting industry.
Contrarian Methods
How do we maximize the returns inherent in the sports market? To capture value, one method is to be contrarian and place a wager against the public. We collect “betting percentages,” from many online sportsbooks, and analyze them. This data allows us to get a pulse on the market and determine the performance of “the general public”.