Can sports betting be seen as a form of investment?

There is no doubt that people do gamble professionally. Other play sports betting sites such as Match.Center for fun and to add a bit of spice to up and coming sporting events.

Although it is possible to make a living by sports betting, could you ever use it as a tool for investment?

To try and determine this, let’s look at other markets such as stocks, forex trading and cryptocurrency. From this, we should be in a better position to determine whether sports betting can be used for investment purposes.

Stock Market

Those that play the market look to determine human behaviour, world events i.e. politics, and natural and manmade disasters. There are also various asset classes and investment vehicles including:

• Individual Stocks
• Mutual Funds
• ETFs and Index Funds
• Bonds

Successful traders can determine market highs and lows and sell and buy accordingly. There are both long term and short term trades, and a true trading strategy behind the success.

Forex Trading

Forex trading is trading the value of one currency against another. Like stocks, there are various influential factors that forex traders take into account. This includes economic releases, political news and events, GDP, interest rates and commodity prices.

Forex traders buy currency pairs and use market movements to sell one currency against another for a profit.

Cryptocurrency

Cryptocurrency is a more volatile version of the stock market. Here currency is traded against fiat currencies (sterling, the dollar, the euro) with an aim of selling when the price is high and buying when the price is low.

Although many have heard of bitcoin, 8000 currencies have been developed. The general principles of trading remain the same although cryptocurrency traders tend to look at things like technology stack, use case, and what blockchain the coin or token uses to conduct transactions.

Sports Betting

Sports betting is where you bet on the outcome of a sport. Like the investment markets above, you have to formulate a strategy for success, predict outcomes, and place wagers accordingly. In addition, you have factors like in-play betting where you can bet on the number of corners in a football match, for example.

Let’s compare key factors to see if sports betting can be considered a good tool for investment.

• Strategy – Sports betting, stocks, forex, and cryptocurrency traders all need a strategy or at least a formula for success.
• Influenced by events – Sports betting is influenced by who is picked to play, injuries, and indeed politics. Both America and Russia have boycotted the Olympic Games for example.
  Market trading regardless of type is heavily influenced by world events.
• Plays– Sports betting relies on the different types of plays or wagers. The stock market features different types of investment vehicles while cryptocurrency does have some ETF and leverage capability. Forex also has leverage.

When you way up these factors there are well defined similarities. But what about the differences?

On the surface betting on the outcome of a sporting match is different to buying say £5k’s worth of bitcoin and waiting for the price to rise. That said, given that not every trade is successful, is that different to losing a bet on a football match?

The key difference then is that yes the price of bitcoin can fall but it can also bounce back and become profitable, but once you’ve lost a bet you’ve lost your money.

That said, with the right strategies you could turn your sports bet into a profitable income. One to think about.