Mark Cuban on Sports Betting

[tech]

Very interesting article: Link (http://www.dallasnews.com/sharedcontent/dws/bus/stories/113004dnbusCubanFund.7887.html)

[krazyace5]

Can you copy and paste it? I hate news sites that make you register to read news articles.

Thanks

[RaDiCaLReeD]

exactly

[theantelope]

Very interesting thread: link (http://forumserver.twoplustwo.com/showthreaded.php?Cat=&Number=1312500&page=0&view=c ollapsed&sb=5&o=14&fpart=1)

[tech]

My bad. Next time I will check all 50,000+ posts on the site before posting. /images/graemlins/smile.gif

[tech]

Sorry -- forgot they made you register.

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Gambling: A better investing bet?

Cuban proposes hedge fund that would wager on sports


11:55 AM CST on Tuesday, November 30, 2004


By BILL DEENER / The Dallas Morning News



Dallas Mavericks owner Mark Cuban apparently gets as disgusted with the stock market as he does with NBA officials.

He considers stock investing not much more than gambling – a trip to Vegas, as he calls it. For those inclined to wager, he says he has a better idea.


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Mark Cuban Mr. Cuban plans to open a hedge fund that bets on sporting events. Professional gamblers will manage the fund, and he says investors will be rewarded. In other words, he's serious about this.

"The goal of the fund would be to make money and to prove that the current equity markets are more Ponzi scheme than efficient markets," Mr. Cuban said in an e-mail response to questions.

"There is far more hypocrisy in equity markets than there is in non-traditional markets and that impacts those markets' ability to be fair."

Over the weekend, Mr. Cuban posted a letter to readers of his blog titled "My New Hedge Fund."

It begins: "I've decided to start a new hedge fund. However, this hedge fund won't invest in stocks or bonds. It's going to be a fund that only places bets – a gambling hedge fund."

The letter rails against the unfairness of stock investing and how much more information gamblers have about the local sports team than investors do about a company. The media inspect every nook and cranny of the local sports teams, he says, and release much more information than publicly traded companies.

"In sports, when someone does something wrong, they tell you the next day. If someone is suspended, you know it; if someone is hurt, they report it and do a better job of policing that than any industry watch group," he writes.

State and federal regulators, as well as officials with the National Basketball Association, declined to comment on Mr. Cuban's plans.

However, Denise Crawford, commissioner of the Texas State Securities Board, said state regulators conduct background checks on hedge fund advisers. They also have to pass a state examination testing their knowledge of investment advisory services.

Mr. Cuban did not offer many details about the venture. He does not specify when the fund will be up and running, which sports the fund will bet on or what it will be called. He does say he won't pick the teams.

"It won't be me figuring out what bets to place, or what games to play. I will find the best and the brightest [gamblers] with a confirmable track record and hire them," he said.

Ed Easterling, president of Crestmont Research in Dallas and an expert on hedge funds, said he finds the idea intriguing. He assumes the fund wouldn't place bets on the Dallas Mavericks basketball team since Mr. Cuban owns the franchise, but everything else would be fair game.

"He could very well be successful," Mr. Easterling said. "I know he will have a deep market to invest in because there are a lot of sports to bet on."

In starting a hedge fund, Mr. Cuban may find himself in a whole new ballgame.

For a long time, hedge funds were lightly regulated on the theory that people participating in them were sophisticated investors and able to take care of themselves. But in recent years, there has been an explosion of hedge funds and the SEC has adopted more stringent rules.

Basically, if Mr. Cuban's fund raises more than $30 million in assets and has at least 15 investors, the advisers of the fund will have to register with the SEC by February 2006.

This means that the advisers would have to tell the SEC their names, addresses and how much money they manage. The SEC also would conduct inspections, and the hedge fund would have to name chief compliance officers.

Presumably, Mr. Cuban would set up his fund similarly to other hedge funds, meaning it would be open only to so-called accredited investors. Typically, they have at least $1 million in assets.

So while a hedge fund run by professional gamblers may sound far-fetched, the industry has a long history of engaging in exotic trading strategies.

In this case, though, it seems as though Mr. Cuban is simply trying to make a point about the current state of the stock market. He says as much on the blog:

"By showing that gambling in the traditional sense is less of a gamble than gambling in the stock market, traditional markets will hopefully have to change to the benefit of investors."

[theantelope]

Why was it you took my post as an attack? I was just pointing out the other discussion. jeeze.

[kdog]

If he does get this thing up and running, who is going to be big enough to book the action and for how long (assuming it wins)?