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Investing in a Sports Arbitrage ‘Investment Fund’ – Some Advice

Posted by Aegist on August 31st, 2007

Sports Arbitrage Guide is about how you, an individual, can do sports arbitrage trading yourself. The goal of SAG is to walk complete novices through the most fundamental aspects of sports arbitrage and help them not get overwhelmed, or lose too much money on silly mistakes. Part of achieving that goal is to provide as much information about the Sports Arbitrage ‘Industry’ as possible. We do that primarily in our Components section of the website where we list every single Sports Arbitrage alert service that we know of, every free trial that we know of, every e-book on the subject, and all of the accessories that can be downloaded to assist arbitrage traders. We have also set up SureBetBookies as a guide through all of the bookmakers used by sports arbitrage programs so that it is easier for novices to select sportsbooks to trade with.

So knowing that, it shouldn’t be a surprise that advising people about ‘investments’ is not what we do. And we are not about to start doing that. However there are a large number of companies around the world who offer to trade sports arbitrage for you, guaranteeing a certain return on investment. On one hand I think this has nothing to do with SAG, because there are millions of companies which offer to take your money from you and promise to pay back more than they took…at a later date, and they clearly have nothing to do with what SAG is about, however because a small number of companies which make this promise mention Sports Arbitrage in their product description, it seems appropriate that I should make some sort of comment on the topic.

Firstly, I have not yet heard a positive report about a company which solicits money from people to invest in a sports arbitrage trading fund. Secondly, if you receive an unsolicited call from someone promising you a lot of money, if you first just give them a lot of money, then just please don’t do it. I guarantee it will end in heartbreak.

The first company I came across which was solely dedicated to enticing people to invest in their sports arbitrage trading fund was Sports Arbitrage Investor, and from the outset I heard nothing about them but story after story of people being promised the world until they parted with their money, then never being able to make contact with the company again let alone ever getting their money back.

While I learnt about Sports Arbitrage Investor, I was actually using Risk Free Profit’s software SureBetPro. Alongside their software, Risk Free Profit offered their members the opportunity to invest a limited amount of money into a trading pool. Everything I read about the RFP trading pool made sense to me, and I actually believe it was legitimate (partly because the promise was reasonable, partly because the rules were strict, and largely because I thought the SureBetPro software was reasonable and therefore the company had a reasonable reputation). Nonetheless, there are payments that are due from that trading pool which members were meant to receive more than a year and a half ago which still have not been paid.

More recently my attention has been drawn to this string of Sports Arbitrage investment programs coming out of Australia. To list a few which I have noticed, there is OzFuture, Rhodes Peninsular Investments, Spectre Trading, and AFL Systems. There seems to be a common theme with Queensland Australia, particularly around the Gold Coast, however Spectre Trading actually operates from Fishwyck in the ACT, so there is no single common theme which holds them together. I have no idea why there are so many ‘investment funds’ coming out of Australia, but there it is. The important point that needs to be made though, is about whether they are real ‘investments’ or not. They all claim to be using your money for sports arbitrage, trading your investment for a compounding profit, and then paying you your money back at the end. The problem is that I actually believe that such a thing is ‘possible’. I know that arbitrage trading is a real phenomenon, and I know that real ongoing profit can be made, and it can be compounded. So how do you know if the company you are researching is a scam, or legit?

More often than not, there is no solid way to know. If you are lucky, they will shoot themselves in the foot with their glossy brochures or fancy website and provide proof that they are full of it. For example, OzFutures has stupidly put up a ‘Past Performance’ page on their website and claimed that they are ‘actual trades’ (screenshot). Careful analysis though clearly shows that the trades they are claiming to make, and specifically the compounding they are claiming to make is practically impossible to do with sports arbitrage. It is impossible because arbitrage is done with 2 (or more) different bookmakers, and when one trade is completed, all of your money ends up in one bookmaker or the other (whichever side wins). In order for you to then place your next trade, you have to withdraw money from that bookmaker and put it into the second bookmaker again so that you can place the second trade. Ignoring all of the actual technical problems with this, the most obvious problem is that it nearly always takes 12-48 hours for a withdrawal from a bookmaker, and so you are limited to one trade every couple of days at most. The ‘actual trades’ posted on the OzFutures website indicates that they can place as many as 4 trades a day, and compound their entire bankroll in each trade. It simply isn’t possible, and there is no way that I would trust a company with my money which doesn’t even understand one of the most basic facts of sports arbitrage with my money.

Not all of the companies are so forthcoming with their information (or disinformation) as that though, and so I will refer to an article published by the Queensland Government Dept of Fair Trading. To summarize, it says that they too have received a lot of complaints about gambling systems, and investment opportunities claiming to be arbitrage based while the reality of most of these systems is that they are simply gambling with other people’s money. They will try to do what they can to bring the people behind these types of scams to justice, but in general there is no way to recuperate the losses of the individual. Their recommendation is simple, and I concur wholeheartedly: These ‘investments’ are high risk, so do not use money you can’t afford to lose. Buy at your own peril.

In conclusion I just want to finish on the point I started on: If you receive an unsolicited phone call from someone offering to make you money, but you need to give them money first…just don’t do it. Obvious no?

Other Links to Queensland Government Fair Trading (etc) warnings:

Be Scam Smart!

Beware Scammers Targetting Your Business

Computer Prediction Software Betting Scams

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