Tuesday, November 30, 2004
Cuban says it's no worse than stock market
DALLAS -- Dallas Mavericks owner Mark Cuban says he plans to
start a hedge fund, run by professional gamblers, to make bets on
Cuban said a gambling hedge fund would be no worse than the
stock market, which he compared to a Ponzi scheme, with some people
trading on inside information and others buying stocks on emotion.
The outspoken NBA team owner, who made his fortune by selling
his Internet company at the height of the dot-com boom, accused
public companies of manipulating profit numbers and said the
Securities and Exchange Commission fails to make companies follow
Cuban proposed the hedge fund in a 1,278-word Web log that he
posted over the weekend.
NBA spokesman Tim Frank said the league needed more information
about Cuban's plans.
"It's just a blog entry," Frank said. "We just became aware
of it this morning, and we haven't had a chance to review it."
Professional sports leagues have traditionally distanced
themselves from gambling. The NBA has rebuffed Las Vegas' efforts
to put a team there, although Cuban supports the idea. The league
permits the Maloof brothers to own both the Sacramento Kings and a
casino in Las Vegas as long as the hotel doesn't offer betting on
In his weekend posting, Cuban said he has "done very well" in
stocks over the past 15 years but that for many investors, putting
money in stocks is nothing more than gambling.
Cuban added that from "minimal reading and conversations"
about sports betting, there are smart gamblers who win repeatedly,
which he attributed to the vast information available about sports
In casinos, he added, "Unlike the stock market, you know the
rules exactly. You know without question, the house is going to
play by the rules. The gaming commission appears to actually
enforce rules of play, unlike the SEC."
Cuban did not respond immediately to questions from The
A gambling-regulation expert in Las Vegas said the owner's idea
was unlikely to work.
"He is barking at the wind," said William Thompson, a
professor of public administration at the University of Nevada, Las
A 1992 federal law supported by the NBA bans sports betting in
all but a few states, including Nevada. A fund could try to place
bets in a Nevada sports book, but Thompson said Nevada officials
wouldn't want the fund to compete with other forms of gambling.
John Avello, director of the race and sports book at Bally's
casino in Las Vegas, said he didn't know what Cuban has in mind,
but he welcomed any new ideas that generate more interest in
Hedge funds are high-risk investments that cater to wealthy
individuals and institutional investors, such as pensions. Their
number and size have grown wildly in recent years. They are only
loosely regulated and are not required to make filings with the
SEC, a spokesman said.
The 46-year-old Cuban and a partner started broadcast.com, which
broadcast games over the Internet. In 1999, he sold the company to
Yahoo! Inc. for about $5.7 billion, and bought the Mavericks the
next year for $280 million.
Cuban is adored by many Dallas fans, who suffered through years
of losing by the hapless Mavs but have become a consistent playoff
team. The NBA has, however, fined him many times, often for
berating referees and most recently for criticizing -- on his blog --
the league's decision to open the current season on election day.
In the past few weeks, Cuban has used his blog to tease Donald
J. Trump over the bankruptcy of his casino empire and mock the
uproar over ABC's use of a naked woman in a promotion on "Monday
Night Football." He also has written about basketball now and
then, extolling his team in a preseason blog and praising NBA
Commissioner David Stern for suspending players who fought with
fans at a recent game in Detroit.