Why are Sports Betting Funds failing to gain much popularity in Nevada?
It’s been almost 2 years since Nevada Legislature passed Senate Bill 443 authorizing certain business entities to place race book and sports pools wagers. Currently the number of registered Betting Funds in Nevada is less than 10. What are the reasons behind the fact that this innovation failed to meet the high expectations?
What would be my concerns if I’m willing to create a Betting Entity in Nevada?
CG Technology remains the only sports book willing to accept wagers from sports-entities.
That lack of participation makes it more difficult for the entities to be successful in long term because they’re limited to one line on games and limited in how much of their funds they can bet. They are also limited in sports events and markets. That means that as an owner of Betting Fund, you may not be able to lock the best odds for your investors.
Regulation issues still exist. In 2016 SEC subpoenaed Nevada Entity Wagering Funds for information.
The subpoena gave fund operators two weeks to send the SEC copies or complete files of information across the following eight categories!:
Documents pertaining to the identity of people who received promotional correspondences
Advertisements, marketing materials, emails, text messages, and other written communications used to promote their fund or explain to investors how to send money to their fund
All documents sent by funds to investors.
All documents received by funds from investors.
The names and addresses of investors, and the amounts contributed by those investors to funds.
All documents relating to the income, net worth, risk tolerance and investment experience of investors.
Documents pertaining to the IP address, web name, web host and content of funds’ websites.
Any communications between a fund and the SEC, a state or federal legislator, or a state or federal regulator, that pertain to Nevada Senate Bill 443.
Several funds expressed irritation at the fact that the SEC, a body whose regulation they believe their fund to be exempt from, and who they believe to be lawfully unregistered with, is nonetheless compelling they release private information. At the same time, Sports Funds owners take all responsibility for any dispute or controversy aroused between them and their investors.
The biggest conflict: Why would any sports book accept high volume wagers from “successful” betting entity?
If these funds have acuity for gambling and choosing the right games and they have a high success rate, it would just be intuitive that the books wouldn’t want that business. They’re not in it to be on the losing side of a wager.
What would be my concerns if I’m willing to invest in an existing Betting Fund in Nevada?
There is no third party which verifies each Fund’s historical betting performance.
It’s very easy to create illusions with winning percentages. There’s a reason why most tips sites don’t disclose their results. If we want to make genuine money by following picks or strategies, we should first look for verified performance and transparent procedures.
Most of the Sports Funds’ websites are made with WordPress, WIX.
They lack login options or ROI calculator. They do not offer chat rooms or forums, where the Fund’s operations could be regulated in more transparent way.
Betting Funds” reminds of another service for sports punters — Paid Betting Tips Industry.
The betting tips industry is not an industry full of success stories in terms of pick performance. You’re more likely to hear horror stories than raves. It’s an industry that has gathered a bad reputation, and in many cases, it is a reputation that is well deserved.
Hidden demand for bigger initial deposits. Investors have no control over money/stake management.
If a fund wagers 2% of its bankroll (flat stake each bet), that means that only 2% of investor’s money will be staked per bet. So if an investor wants to have his average bet around $500 he should invest at least $25 000.
Funds’ Management limitations.
While companies like Fidelity have multiple funds managed by different individuals the same can’t be said for entity wagering yet. This form of investing is so new that you should be researching each entity manager with the due diligence your money deserves.
Huge Lock up Period.
Some funds promote Bi-annual term for the lock up period. Cash outs can be requested for example June 31st and January 31st.
Funds do not accept investments under $1000.
Some funds require a minimum investment of $25,000 for one Unit.
Investors must submit application forms.
The problem is that Investors should submit new application with each fund they want to invest in. The verification is quite more complicated than registering account directly with a sports book.
Who’s the next “Centaur Galileo” in Nevada?
The UK-based sports-betting hedge fund was closed after losing $2.5 million in investments. The fund then told investors that they lost it all due to “sheer bad luck.”
** Most of the funds send their performance statements monthly. Others will even show your statement after 6 months. Such practices make it difficult for the investors to follow the fund’s activity.
** Some funds have first time deposit fees. Sports Entity should not have additional fees than a regular sports book.
** Some funds have additional management fees.
** All funds a limited to one sports book. They can execute their bets at only one sports book.
Stoyo Dichev is the owner of Betoutlet LLC a P2P sports betting fund and algorithmic Tennis tipster service called Tennis Jack based in Las Vegas. Stoyo can be followed or contacted at https://www.betgeeks.com/members/tennisjack/profile/Recommend0 recommendationsPublished in Algorithmic Betting, Gambling Services & Products
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