Tuesday, January 31, 2012
Sports betting hedge fund closes
By Henry Abbott
In 2004, Mark Cuban wrote a blog post about his plans to open a hedge fund that specialized in one thing: betting on sports.
His rationale was a good one: Many Wall Street investments are gambles by another name. And at least in sports there is real, accurate, up-to-the-minute public information available about every team. In business, it's almost routine for executives to mess with the numbers to their advantage. The playing field, in other words, is not level.
But in sports gambling, he argued, there is both good information and a bunch of emotional bettors who ignore it. They're on vacation in Vegas, and they enter the sportsbook expecting to lose.
That makes real opportunities for the smart guys.
Cuban eventually abandoned the idea, for various reasons.
But in 2010, a Gibraltar-based company gave it a whirl. They launched a sports betting fund, and got a lot of press in the process. The Centaur Galileo fund, which boasted statistical models that had been developed for five years, would be a pure statistical play.
But the blog Wager Minds says that, as of Monday, the Centaur Galileo fund appears to be out of business. A visit to the website includes a disclaimer, a logo, and a "page not found" error where the actual content of the site ought to be. What's unclear is if the business model is a tough one, or if this fund collapsed for its own reasons, as Wager Minds suggests may have happened.
UPDATE: A link from the comments, with more insight.