Many people enjoy sports, and sports fans often wager on the outcomes of sporting events. Casual sports bettors lose money over time, which creates a bad reputation for the industry. If we could ensure a level playing field, would that change things?
By making sports betting less like “메이저놀이터” a hobby and more like a business, we will be able to make the case for sports betting as an investment.
Sports markets as an asset class
What can we do to make the transition from gambling to investing? As a team of analysts, economists, and Wall Street professionals, we often refer to sports investing as “sports investing”. Why is sports investing considered an asset class?
As a class, an asset is characterized as an investment with a marketplace – that has an inherent return. There is no doubt that sports betting has a marketplace, but what about a revenue stream?
In exchange for lending money to investors, they earn interest on bonds. When a shareholder owns a portion of a company, they earn long-term returns. The sports investor, according to some, has a built-in inherent return as a result of “risk transfer,” meaning they can earn returns by helping to provide liquidity and transferring risk amongst other sports marketplace participants (such as the betting public and sportsbooks).
Investing in Sports Indices
To expand on this investing analogy, we can look at the sports betting “marketplace.” Just as conventional assets like stocks and bonds are priced based on dividends, interest rates, and dividend yields – the prices of sports markets are determined by point spreads and moneyline odds. Just as stock prices rise and fall with time, so do these lines and odds.
Our objective is to make sports gambling a more businesslike endeavor and to study the sports market in greater detail. We gather several additional indicators to achieve this goal. Specifically, we study “money flows” and sports marketplace activity by collecting public betting percentages. We also track the volume of sports gambling bets, just like the financial headlines would proclaim, “Stocks rally on heavy volume.”
Participants on the sports marketplace
The concept of “risk transfer” and the participants in the sports marketplace were discussed earlier. The sportsbooks in the betting world perform a similar function as the brokers and market-makers in the investing world. Institutional investors sometimes behave similarly to these sportsbooks.
Similarly, the general public often makes small bets in the sports marketplace. The general public is known as a small investor in the investing world. Often, small bettors bet with their hearts, support their favorite teams, and exhibit certain tendencies that can be exploited by other participants in the market.
Participants in the “sports investment industry” take on similar roles as market-makers or institutional investors. Bettors who make money from sports betting follow business-like strategies. The sports betting companies act as a risk transfer agent and are able to capture the inherent returns of the industry.
What are the key strategies for capturing the inherent returns of the sports market? It is possible to capture value by using a contrarian approach and betting against the public. One reason we collect and analyze “betting percentages” from major online sports books is due to this very reason. Through the study of this data, we can sense the pulse of the market – and identify how the “general public” is performing.
We can gain insight into the actions of various participants based on these factors, along with point spread movement and the “volume” of betting. Our research shows that the public – commonly referred to as “small bettors” – consistently underperforms in sports betting. As a result, we can use sports investing methods to capture value systematically. It is our aim to apply a systematic and academic approach to the sports betting industry.