Hedge Funds, News

Professional Sports Arbitrageur Seeks Investors For Offshore Hedge Fund

Interested?

To: [A bunch of hedge funds]
Subject: Arbitrage Investment

Greetings: I am professional sports arbitrageur. I am investigating the formation of my own offshore hedge fund that would fund my arbitrage activities, and I thought I would concurrently contact exisiting hedge funds to see if they would be interested in investing in this fantastic, risk free concept, saving me the time, effort and expense of establishing my own fund.

I am engaged in the practice of sports arbitrage, that is, simulataneous wagering on both sides of a sporting event when a market inefficency occurs and the two seperate bookmakers set the wager lines such that a guranteed profit can be made by this simultaneous wager. The outcome of the match is irrelevant, as the profit is made because the books set the odds differently. There is nothing illegal about it (in every country in the world, except the USA; therefore, the fund and it’s operation would be domiciled offshore) – it’s a perfectly legitimate way to take advantage of the high number of sports bookmakers in the world while making a guaranteed profit. I have designed a proprietary system for instant review of over 100 online bookmakers and recognition of any and all arbitrage opportunities; these opportunities usually exist for only a few minutes, so immediate recognition and action on the arbitrage is required.

I would envision the fund having a cap of probably $1-2 million US. Any more than that and I would start running into problems making sure the bookmakers would accept my wagers. This money would be spread across at least 50 bookmakers. I should have no trouble returning at least 4% per month (48% per year) to my investors with no real risk, after my fees and expenses. I would hope to be able to get closer to returning 6% per month (72% per year), but the compelling thing to remember is – there is no risk. No money is wagered/invested, until the existence of an arbitrage opportunity occurs, rendering the outcome of the sporting event irrelevant.

I am not aware of what specific criteria your fund has, but from what I can tell, a $1-2 million investment in a concept like this that has no risk and returns nearly 50% per year would be a wise investment. Please let me know if you would like to discuss this further. Email or call anytime.

Conversely, if you are not interested, would you mind telling me why not? Is it too small of an investment for your fund? Does this concept not seem believeable to you? Any input would be helpful?

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130 Responses to “Professional Sports Arbitrageur Seeks Investors For Offshore Hedge Fund”

  1. Guest says:

    could work, too small

    -guy who has thought of this and abandoned sports betting models for more hedgefundy ones

  2. Anonymous says:

    He’s basically a bookie who’s looking for new, wealthy, clients.

    • DownWithOPM says:

      Except the complete opposite. Cf. Mark Cuban being pitched and pitching the same idea years ago. It works, it just doesn’t scale.

  3. Guest says:

    I’m in.  Sign me up.

    –Gary Foster

  4. Guest says:

    How many times can he say “no risk” in a single email?  

  5. Guest says:

    not sure why you included this story?  looks like a typical hedge fund marketing presentation to me except he forgot to say 2 & 20.  i’d probably give him money over 90% of the harvard & yale lads with no socks and loafers up in ny

  6. Guest says:

    I like the sound of this. Risk free, you say? Guaranteed profits? I’d like to invest in this strategy, no questions asked.

    – Fred Wilpon

    • guest says:

      PS can we scale it to about 100M instead?  I have to pay off some jackass in 3 years.  Thx!  

  7. Novak Djokovic says:

    If you’re going to cover tennis, please call me.

  8. Guest says:

    Is that you, Nails?

  9. Guest says:

    This kid never remembered Porter’s Five Forces.  He forgot that there are no barriers to entry on this idea.  Any quant out there can set up a spreadsheet or a program that links to all the bookies, and then spits out the “arbitrage.”

  10. MM says:

    I already tried this. Al Pacino screwed me up before I could get going.

    Matthew McConaughey

  11. Texashedge says:

    This actually wouldn’t be a terrible idea if it weren’t for, you know, the vig.

  12. WallStreetFatCat says:

    When I put all of my money into mortgage backed securities in 2006 all of the guys at lehman told me they were risk free too… I think they forgot to mention that their model assumed that housing prices would never go down.

  13. HFguy says:

    better than most shit i see everyday. only thing he forgot is the initial 100000 – 200000 to set up the firm that would be a 10% drag. and too small. 

  14. Guest says:

    Is this like writing insurance coverage on loans that cannot possibly fail?  If so,where do I send my check?

  15. Mknuckles says:

    “I should have no trouble returning at least 4% per month (48% per year)”

    Interesting math.

    • Guest says:

      Only suckers reinvest profits

      • Guest says:

        He did say that the market would only bear about $1-2mm before bookies would stop taking his bets. Presumably the remainder can be profitably side-pocketed in LightSquared equity.

        When he says risk free I don’t think he has fully considered the fat tail risk of finding two Jamaican guys with machetes in his living room (sorry, World Headquarters*).

    • AIG Quant says:

      I caught it it too.  4 * 13 = ~ 50.  Idiot.

    • Moody's Summer Intern Analyst says:

      You’re doing it backwards.  He started with 48 and divided by 12, of course.

    • Bored quant says:

      someone tell him that 1.04^12=1.601

      which is a 60% return per year.

      stupidity, modesty, and dangerous overconfidence. COUNT ME IN.

    • Bored quant says:

      someone tell him that 1.04^12=1.601

      which is a 60% return per year.

      stupidity, modesty, and dangerous overconfidence. COUNT ME IN.

  16. Confucius says:

    Total disregard for counterparty risk = green shoots

  17. Rational says:

    Right, it’s also a snap to get the online bookies to send you a check for your winnings, so at least that isn’t an issue

    • DownWithOPM says:

      In places like the UK and Germany they’ll send you a bank wire same-day. Hence the repeated references to ‘offshore.’

      I know, I know, Ireland’s not a real country. But think of the hooker parties we can have as the biggest sports-betting arb fund in all of GERMANY!

      [Wait till you see the girls with the cerulean bracelets]

      • Anonymous says:

        cf LAD LN [equity] — the bookies are major, legitimate companies in places like Britain: you’re not dealing with Vinnie and Big Al from Bensonhurst.

        (edit- this was meant to be in response to Rational)

  18. in love with pmco avatar says:

    i am sure a few “families” will have issue with his new business venture

  19. Love Bean says:

    I am engaged in the practice of Beanie Baby arbitrage, that is, simulataneous wagering on both sides of a Beanie Baby when a market inefficency occurs and the two seperate Ebay bidder set the wager lines such that a guranteed profit can be made by this simultaneous wager. The outcome of the match is irrelevant, as the profit is made because the bids set the odds differently. There is nothing illegal about it (in every country in the world, except the USA; therefore, the fund and it’s operation would be domiciled offshore) – it’s a perfectly legitimate way to take advantage of the high number of Beanie Babies listed in the world while making a guaranteed profit. I have designed a proprietary system for instant review of over 100 online bidder and sellers of any and all arbitrage opportunities; these opportunities usually exist for only a few minutes, so immediate recognition and action on the arbitrage is required.  I would envision the fund having a cap of probably $1-2 million US. Any more than that and I would start running into problems making sure the sellers would accept my wagers. This money would be spread across at least 50 bids. I should have no trouble returning at least 4% per month (48% per year) to my investors with no real risk, after my fees and expenses. I would hope to be able to get closer to returning 6% per month (72% per year), but the compelling thing to remember is – there is no risk. No money is wagered/invested, until the existence of an arbitrage opportunity occurs, rendering the outcome of the sporting event irrelevant.  I am not aware of what specific criteria your fund has, but from what I can tell, a $1-2 million investment in a concept like this that has no risk and returns nearly 50% per year would be a wise investment. Please let me know if you would like to discuss this further. Email or call anytime. Conversely, if you are not interested, would you mind telling me why not? Is it too small of an investment for your fund? Does this concept not seem believeable to you? Do you just hate Beanie Babies? Any input would be helpful? -Karl MaloneBeanie Baby Arbitror

  20. Gues says:

    1-2 million, really?

    that’s less than what Phil spends in grooming products for me each year

    – Sent from Wilbur´s IPAD

  21. Joey55 says:

    this is far from risk free.  he has credit exposure to a bunch of dodgy offshore gambling sites and one default would blow out years of money made on the small spreads that these trades would pick up.  bad idea.

    • Guest says:

      “this is far from risk free.”

      get out of town.

    • ahahah says:

      Not too mention the fact that he’s asking investors to give him cash that he’ll deposit in an offshore bank account, that he controls, which he may or may not use to gamble on sports….

      • RU Kidding Me? says:

        Is everyone high today on this board? What the fuck kind of comments are these? REALLY? THIS MIGHT NOT BE A GOOD INVESTMENT? Do you think Bess put this story up here because it really is a hot tip?

      • RU Kidding Me? says:

        Is everyone high today on this board? What the fuck kind of comments are these? REALLY? THIS MIGHT NOT BE A GOOD INVESTMENT? Do you think Bess put this story up here because it really is a hot tip?

    • guest says:

      You’re hired!

      – UBS risk management

  22. Anonymous says:

    Do bookies provide FIX feeds?

  23. Brian1284 says:

    So his strategy is to bet against Wilpon and the Mets.  84 games left in the season and a simple mix of some money lines and run lines would give you at least a 48% return.  No way the mets go over .500 for the rest of the season.

  24. Cliff ASSness says:

    yes, but you need to incorporate both value AND momentum into your model.  and talk a lot about using common sense and not just math…that’s how it’s done

  25. Cosmo says:

    It can’t be done Newman.  I’ve worked the numbers and there’s no way it can be done.  Forget it.

  26. L3X_Luthor says:

    Just wait until I start arbitraging different wholesale prices for Light^2 and GPS data transmission.

  27. Chuddy says:

    This passes our due diligence test……..where do we wire the funds?

    ~ The Wilpons

  28. Swallow my goo says:

    Can I get $20 on the Rays tonight?
    Thanks,

    ~ Nails

  29. 25th Hour Trader says:

    Disclaimer: Instead of cash, we intend to pay our investors “in kind” and by “in kind” we mean assorted sports memorabilia such as bobble heads, jockstraps, etc.

    P. Falcone, Chief Risk Officer
    Two For The Money, LLC

  30. Guest says:

    I am pretty sure I know who this is.

  31. Lord Humongous says:

    Is that you Bovery?

    – guy who would like his money back someday

  32. Lord Humongous says:

    Is that you Bovery?

    – guy who would like his money back someday

  33. Fund McFundson says:

    No thank you.

    -a bunch of hedge funds

  34. Fund McFundson says:

    No thank you.

    -a bunch of hedge funds

  35. AAAardvark1 Trading says:

    Greetings,
    I arbitrage stock options, and recently, I discovered that the same options are traded at DIFFERENT EXCHANGES at the same time!  (Shhhhhh!). And the guys in New York don’t realize that the guys in Chicago are doing the same things at different prices and vice-versa (dummies) so I am raising all the $$ I can toreallystart tradingthesethingsalot tomaketonsof$$$$

    Send checks here:
     214 S. Canal St.  Unit 328
    Chicago Il  60605

  36. AAAardvark1 Trading says:

    Greetings,
    I arbitrage stock options, and recently, I discovered that the same options are traded at DIFFERENT EXCHANGES at the same time!  (Shhhhhh!). And the guys in New York don’t realize that the guys in Chicago are doing the same things at different prices and vice-versa (dummies) so I am raising all the $$ I can toreallystart tradingthesethingsalot tomaketonsof$$$$

    Send checks here:
     214 S. Canal St.  Unit 328
    Chicago Il  60605

  37. Anonymous says:

    Seems like a gig for STAR…beep…boop…trrr…beep.  I hope he sent his email to those guys. They would be the right size for this too.

  38. Anonymous says:

    Seems like a gig for STAR…beep…boop…trrr…beep.  I hope he sent his email to those guys. They would be the right size for this too.

  39. Jimmy says:

    I am pretty sure selling nickel SPX puts is at max margin is a better and more scalable strategy.

  40. Jimmy says:

    I am pretty sure selling nickel SPX puts is at max margin is a better and more scalable strategy.

  41. Guest says:

    counterparty credit risk ! what happens when a bookie comes to break your legs?

  42. Guest says:

    counterparty credit risk ! what happens when a bookie comes to break your legs?

  43. Shawn says:

    Where was this e-mail sent from? 1998?

    –Guy who knows all the sweet sports arbs disappeared ten years ago

  44. guest says:

    I will say that I have used this concept many times using various online sites and you CAN turn a profit betting this way without a doubt.

    But with that being said, this type of situation where you can guarantee profit mostly arises for props, and most books have extremely low limits on props.

    This is coming from a guy who used to have 15 different accounts (between me and two friends) spread across the same network in order to exceed the betting limits. You are suggesting all of this under one name. It just isn’t going to work out.

    • Wilshire Consulting says:

      Interesting first analysis.  Do you have an updated CV?

    • Wilshire Consulting says:

      Interesting first analysis.  Do you have an updated CV?

    • Wilshire Consulting says:

      Interesting first analysis.  Do you have an updated CV?

    • Wilshire Consulting says:

      Interesting first analysis.  Do you have an updated CV?

    • Guest says:

      Interesting. What’s your home address again?

      Vinnie (Not your cousin)

    • Guest says:

      Interesting. What’s your home address again?

      Vinnie (Not your cousin)

    • Guest says:

      Interesting. What’s your home address again?

      Vinnie (Not your cousin)

    • Guest says:

      Interesting. What’s your home address again?

      Vinnie (Not your cousin)

    • Guest says:

      Interesting. What’s your home address again?

      Vinnie (Not your cousin)

    • Guest says:

      Interesting. What’s your home address again?

      Vinnie (Not your cousin)

    • Guest says:

      Interesting. What’s your home address again?

      Vinnie (Not your cousin)

    • L3X_Luthor says:

      Profits don’t come mostly from props. Like the flash traders, they come from taking the better price as the market moves. On big events each major book will take 50-100k or more, M casino says they’ll take 100-500k in live bets [run by Cantor]. Plus you have the various signup and deposit bonuses.

      15 acc’ts spread among 3 guys is ludicrously, laughably low. That’s like a HF mgr saying he talks to a whole five guys on Wall St to trade stocks and bond and FX.

      Try 40-50 per next time…whenever you get out of HS.

    • L3X_Luthor says:

      Profits don’t come mostly from props. Like the flash traders, they come from taking the better price as the market moves. On big events each major book will take 50-100k or more, M casino says they’ll take 100-500k in live bets [run by Cantor]. Plus you have the various signup and deposit bonuses.

      15 acc’ts spread among 3 guys is ludicrously, laughably low. That’s like a HF mgr saying he talks to a whole five guys on Wall St to trade stocks and bond and FX.

      Try 40-50 per next time…whenever you get out of HS.

      • guest says:

        Clearly someone has a hard time understanding. The 15 accounts I spoke of was in regards to one specific ONLINE SPORTSBOOK network, not casinos. Online sportsbooks are where most of the line errors arise. Go try and get 15 different accounts on the SAME sportsbook/playersonly network and lemme know how it ends up.

        • DownWithOPM says:

          I was talking about online sportsbooks *in addition* to offline ones, n00b. The one who clearly misunderstands is still you.

          Tell me again how ‘most of the profits come from propz?’ roflmao.

    • L3X_Luthor says:

      Profits don’t come mostly from props. Like the flash traders, they come from taking the better price as the market moves. On big events each major book will take 50-100k or more, M casino says they’ll take 100-500k in live bets [run by Cantor]. Plus you have the various signup and deposit bonuses.

      15 acc’ts spread among 3 guys is ludicrously, laughably low. That’s like a HF mgr saying he talks to a whole five guys on Wall St to trade stocks and bond and FX.

      Try 40-50 per next time…whenever you get out of HS.

    • L3X_Luthor says:

      Profits don’t come mostly from props. Like the flash traders, they come from taking the better price as the market moves. On big events each major book will take 50-100k or more, M casino says they’ll take 100-500k in live bets [run by Cantor]. Plus you have the various signup and deposit bonuses.

      15 acc’ts spread among 3 guys is ludicrously, laughably low. That’s like a HF mgr saying he talks to a whole five guys on Wall St to trade stocks and bond and FX.

      Try 40-50 per next time…whenever you get out of HS.

    • L3X_Luthor says:

      Profits don’t come mostly from props. Like the flash traders, they come from taking the better price as the market moves. On big events each major book will take 50-100k or more, M casino says they’ll take 100-500k in live bets [run by Cantor]. Plus you have the various signup and deposit bonuses.

      15 acc’ts spread among 3 guys is ludicrously, laughably low. That’s like a HF mgr saying he talks to a whole five guys on Wall St to trade stocks and bond and FX.

      Try 40-50 per next time…whenever you get out of HS.

  45. guest says:

    I will say that I have used this concept many times using various online sites and you CAN turn a profit betting this way without a doubt.

    But with that being said, this type of situation where you can guarantee profit mostly arises for props, and most books have extremely low limits on props.

    This is coming from a guy who used to have 15 different accounts (between me and two friends) spread across the same network in order to exceed the betting limits. You are suggesting all of this under one name. It just isn’t going to work out.

  46. Anonymous says:

    This is common sports betting practice. When looking solely at the bets placed, it is risk free; however, not when adding external variable circumstance to the equation. For example, bookmaker #1 might have made a mistake in their posted line, cancel the price, and you’re left holding a non-risk free one-side bet. Or, one of the 50 bookmakers that you’re spreading your $2m around becomes insolvent and you lose your deposit.

    But the major issue involves scalability of arbitrage sports betting. You’ll be shut down by the sports books far faster than you can spread the bet amounts needed to make a worthwhile return.

  47. Anonymous says:

    This is common sports betting practice. When looking solely at the bets placed, it is risk free; however, not when adding external variable circumstance to the equation. For example, bookmaker #1 might have made a mistake in their posted line, cancel the price, and you’re left holding a non-risk free one-side bet. Or, one of the 50 bookmakers that you’re spreading your $2m around becomes insolvent and you lose your deposit.

    But the major issue involves scalability of arbitrage sports betting. You’ll be shut down by the sports books far faster than you can spread the bet amounts needed to make a worthwhile return.

  48. Anonymous says:

    This is common sports betting practice. When looking solely at the bets placed, it is risk free; however, not when adding external variable circumstance to the equation. For example, bookmaker #1 might have made a mistake in their posted line, cancel the price, and you’re left holding a non-risk free one-side bet. Or, one of the 50 bookmakers that you’re spreading your $2m around becomes insolvent and you lose your deposit.

    But the major issue involves scalability of arbitrage sports betting. You’ll be shut down by the sports books far faster than you can spread the bet amounts needed to make a worthwhile return.

  49. Anonymous says:

    This is common sports betting practice. When looking solely at the bets placed, it is risk free; however, not when adding external variable circumstance to the equation. For example, bookmaker #1 might have made a mistake in their posted line, cancel the price, and you’re left holding a non-risk free one-side bet. Or, one of the 50 bookmakers that you’re spreading your $2m around becomes insolvent and you lose your deposit.

    But the major issue involves scalability of arbitrage sports betting. You’ll be shut down by the sports books far faster than you can spread the bet amounts needed to make a worthwhile return.

  50. Anonymous says:

    This is common sports betting practice. When looking solely at the bets placed, it is risk free; however, not when adding external variable circumstance to the equation. For example, bookmaker #1 might have made a mistake in their posted line, cancel the price, and you’re left holding a non-risk free one-side bet. Or, one of the 50 bookmakers that you’re spreading your $2m around becomes insolvent and you lose your deposit.

    But the major issue involves scalability of arbitrage sports betting. You’ll be shut down by the sports books far faster than you can spread the bet amounts needed to make a worthwhile return.

  51. Anonymous says:

    This is common sports betting practice. When looking solely at the bets placed, it is risk free; however, not when adding external variable circumstance to the equation. For example, bookmaker #1 might have made a mistake in their posted line, cancel the price, and you’re left holding a non-risk free one-side bet. Or, one of the 50 bookmakers that you’re spreading your $2m around becomes insolvent and you lose your deposit.

    But the major issue involves scalability of arbitrage sports betting. You’ll be shut down by the sports books far faster than you can spread the bet amounts needed to make a worthwhile return.

  52. Lbz360 says:

    All you guys are IDIOTS no one has asked him what the Beta is on the betting fund. How can you even consider this investment without that most important figure. 

  53. Hedge This says:

    He should work with the guys who wrote about before..numberFire or something. They were ridiculously accurate in terms of their picks in the playoffs.

  54. Brendan Poots says:

    how do i contact you

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  57. Daniel says:

    Hi,

    How can I subscribe to the Elite membership?

    Great post, keep up the good work ;)

    Kind regards,
    Daniel