Sports betting is evolving, growing and becoming more sophisticated. According to financial expert Tony Woodhams, sports betting will become “one of the largest financial markets in the world over the next 20 years.”
In the coming weeks, the first regulated betting hedge fund will begin trading. Woodhams will manage the London-based Centaur Galileo Sports Trading Hedge Fund. He has approximately 20 investors, who have forked over €100,000 each in hopes of capitalizing on the fund’s goal of 15 to 25 percent return after fees.
Currently, Galileo has five traders and four analysts and is hiring. Woodhams expects his staff to double within the year. He’s not looking for professional gamblers and being a sports expert isn’t a prerequisite.
“Gambling is a word that we associated with uncomfortable risk,” Woodhams says. “We’re looking for mathematicians and traders. We’re looking for people who are unemotional, who don’t get frustrated when they fall short on a couple of trades.
“They don’t have to be [sports] experts. It can actually help if they aren’t, if they come in with a fresh set of eyes and you just look at the numbers. The pattern of the numbers will tell you all you need to know.”
Woodhams says his office looks like any other financial investment firm, but instead of MSNBC on all the computer monitors and televisions, his analysts are glued to sports.
In the initial start-up period, the Galileo fund will focus on trading soccer, rugby, tennis, golf and cricket. Woodhams plans to add NFL, NBA, MLB and college football and basketball in the future.
He also says it’s just a matter of time before online gambling is legalized and regulated in the United States. “America’s a betting country,” Woodhams told BusinessWeek.
This week, Woodhams visited with Covers.com’s David Payne about the fundamentals of his strategy and the future of online gambling.
Q: If you were to pinpoint one key to the success of your fund, what would it be?
A: The fundamental key is to remove the emotion from the wager. I was talking to a successful trader the other week, who had a clinical approach to trading. But he said when leaves office he likes to place a few bets on his favorite football club. He said his grandfather used to take him to the games so he has an emotional attachment, which affects his decision making when wagering. We take that emotional attachment out.
Look at Wimbledon, for example. The price on Andy Murray is almost always wrong. You are always going to get these waves of patriotic betting that’s going to push the price to an inappropriate level. People are emotional when betting. We use a clinical approach.
Q: Live in-game betting seems to be the key to what has made your business possible, correct?
A: Yes. Three years ago, live betting was responsible for five percent of the gambling markets. Now, it’s grown to 50 percent. It’s basically turned the gambling markets into financial markets.
Q: Please explain the process of how your fund will trade during a live sporting event.
A: Let’s take tennis, for example. You can trade tennis similar to how financial investors range trade. If you and I were in a tennis match and oddmakers valued us as having similar ability, the odds would be 50/50. If you win the first game with your serve, the price will move away from mid-value about three to four percent. All you’ve done is won your serve, which you’re expected to do. But you get that move toward you as a player. We can range trade and pick the highs and lows in the market. Opportunities like that exist 1,000 times a week.
Q: How many trades will you make during, for example, a tennis match?
A: We’ve made upwards of 300 to 400 trades during one match. But we’re just chipping away and making small percentages on each trade. (Woodhams says the fund will never wager more than five percent on a single event).
Q: You’ve said the software your fund relies on uses 10 years worth of data. But a lot of bettors believe a game that was played 10 years ago really has nothing to do with a game being played today. What’s your response to that argument?
A: They’re right. We rarely go back more than 12 to 18 months when looking at data on a match.
In the coming weeks, the first regulated betting hedge fund will begin trading. Woodhams will manage the London-based Centaur Galileo Sports Trading Hedge Fund. He has approximately 20 investors, who have forked over €100,000 each in hopes of capitalizing on the fund’s goal of 15 to 25 percent return after fees.
Currently, Galileo has five traders and four analysts and is hiring. Woodhams expects his staff to double within the year. He’s not looking for professional gamblers and being a sports expert isn’t a prerequisite.
“Gambling is a word that we associated with uncomfortable risk,” Woodhams says. “We’re looking for mathematicians and traders. We’re looking for people who are unemotional, who don’t get frustrated when they fall short on a couple of trades.
“They don’t have to be [sports] experts. It can actually help if they aren’t, if they come in with a fresh set of eyes and you just look at the numbers. The pattern of the numbers will tell you all you need to know.”
Woodhams says his office looks like any other financial investment firm, but instead of MSNBC on all the computer monitors and televisions, his analysts are glued to sports.
In the initial start-up period, the Galileo fund will focus on trading soccer, rugby, tennis, golf and cricket. Woodhams plans to add NFL, NBA, MLB and college football and basketball in the future.
He also says it’s just a matter of time before online gambling is legalized and regulated in the United States. “America’s a betting country,” Woodhams told BusinessWeek.
This week, Woodhams visited with Covers.com’s David Payne about the fundamentals of his strategy and the future of online gambling.
Q: If you were to pinpoint one key to the success of your fund, what would it be?
A: The fundamental key is to remove the emotion from the wager. I was talking to a successful trader the other week, who had a clinical approach to trading. But he said when leaves office he likes to place a few bets on his favorite football club. He said his grandfather used to take him to the games so he has an emotional attachment, which affects his decision making when wagering. We take that emotional attachment out.
Look at Wimbledon, for example. The price on Andy Murray is almost always wrong. You are always going to get these waves of patriotic betting that’s going to push the price to an inappropriate level. People are emotional when betting. We use a clinical approach.
Q: Live in-game betting seems to be the key to what has made your business possible, correct?
A: Yes. Three years ago, live betting was responsible for five percent of the gambling markets. Now, it’s grown to 50 percent. It’s basically turned the gambling markets into financial markets.
Q: Please explain the process of how your fund will trade during a live sporting event.
A: Let’s take tennis, for example. You can trade tennis similar to how financial investors range trade. If you and I were in a tennis match and oddmakers valued us as having similar ability, the odds would be 50/50. If you win the first game with your serve, the price will move away from mid-value about three to four percent. All you’ve done is won your serve, which you’re expected to do. But you get that move toward you as a player. We can range trade and pick the highs and lows in the market. Opportunities like that exist 1,000 times a week.
Q: How many trades will you make during, for example, a tennis match?
A: We’ve made upwards of 300 to 400 trades during one match. But we’re just chipping away and making small percentages on each trade. (Woodhams says the fund will never wager more than five percent on a single event).
Q: You’ve said the software your fund relies on uses 10 years worth of data. But a lot of bettors believe a game that was played 10 years ago really has nothing to do with a game being played today. What’s your response to that argument?
A: They’re right. We rarely go back more than 12 to 18 months when looking at data on a match.
