An inheritance, lottery win or a rare sporting talent are three likely candidates, and you don't have to look far to find hundreds of stories about former star players now working mundane jobs or lottery winners who have blown through millions. Some UK based readers will be familiar with lottery winner Callie Rogers who won nearly two million pounds in 2003 and ten years later, after attempting suicide, was studying nursing with a net worth of £2,000.
On a personal note, while he never earned the riches that top players receive these days, back in the day I was friends with the brother of David Price, the footballer who played in three FA Cup Finals and a Cup-Winners Cup Final for Arsenal as well as his local team Crystal Palace.
Forced to retire at the relatively early age of 28, David was putting down computer room flooring and driving a mini-cab after blowing his relative wealth on extravagances and simply being too generous. He would often pick up the bill for nights out with friends, most of whom pretty much vanished overnight after his career was over.
Peter Webb's article takes a rueful look at the image of 'gambling markets' and the attitude of the press which loves a good Elliot Short-like story. While the business model used by traditional bookmakers - "we only accept losers" - should be ultimately doomed (a fate that would be accelerated with the banning of FOBTs), the exchanges and their shenanigans don't help themselves. The insider-trading scandal this week in Fantasy Sports is another example of the industry shooting itself in the foot.
Back to more mundane issues, Peter and I are on the same page on this issue:
You also have the issue that people who have never traded successfully are positioning themselves as experts or people are seeking to exploit the trading opportunity, rather than getting on and doing it, that isn’t helping matters. So even the best opportunity to profit from sports markets that ever existed, can get horribly fudged.
I feel sorry for people on the wrong side of these scams. But it has to be said, it’s fairly obvious that if you are producing stellar returns on something, you just reinvest the money yourself. No need to seek outside involvement. I know that, because that is exactly what I and many others have done. I’ve never met a serious participant in the market who wouldn’t do the same.The infamous Sultan and Odwyer come to mind as characters here. Both were mentioned in a post back in February 2013 and then of course there was our old friend Adam Heathcote, but the key point to understand is that if you have an edge, you don't need anyone else's funds to get the ball rolling. I started with a Betfair deposit of £98.50 in 2004, and as I have mentioned before, that remains my only deposit into Betfair. It took me a while to get going, and honestly I don't believe the same opportunities exist today as they did 12 or so years ago, but it was a fun ride at least until I hit the 50% Premium Charge limit.
Having too much money actually works against you as Peter explains:
...even starting with small amounts, you can move to much bigger ones very quickly, if you have an edge. This is something fairly unique to sports markets. So if I start with a small amount of capital I don’t really need any more, I just compound what I have.
The fact is, even if you have a decent track record it’s impossible to put that extra money to use because your ‘system’ will collapse under the weight of your own stakes. In effect, you become the market! The upshot of this is that sports markets are just not scalable enough to warrant raising significant funds to deploy in them.I do have a problem with Peter's qualification of the word 'unique' here - there is no degree of uniqueness! Something is either unique or it is not unique. Something can't be 'fairly' unique, but what Peter says is correct so far as scalability is concerned. If you are playing with a few pounds, it is much easier to get value than if you are playing with tens of thousands. The below market is from tonight's baseball game between the Toronto Blue Jays and the Texas Rangers:
With just £2,107 traded at the time of writing, that's not exactly a liquid market where a large stake would be required. So next time you read that someone needs funds, understand that means they have no edge. If they have an edge, they don't need your money.
Speaking of fools, I just saw this from TheLADbible:
I don't think betting is their strong suit.
There is no fool like a careless gambler who starts taking victory for granted - Hunter S Thompson