This week, Businessweek gives us a fascinating look inside a London-based sports bettting hedge fund. I highly recommend reading the entire article.

The Galileo Managed Sports Fund, which launched in April under the umbrella of the nine-year-old Centaur Group, is the world’s first sports-betting hedge fund. The idea has been knocking around for a while. Six years ago, Mark Cuban, the billionaire owner of the National Basketball Assn.’s Dallas Mavericks, proposed a similar fund, only to see his idea crash on the shoals of American prohibitionism. While the NBA forbids anyone involved with the league from betting on its games, there was a larger problem: Outside of Nevada, Delaware, and Oregon, betting on sports is largely illegal.

There are some interesting comments from a technical perspective over on Hacker News and there is a nice writeup of the financial dimensions at Hedge Fund Lounge.

The Feds have struck back and struck back hard! This story has everything – domain names seized, executives arrested, and billions of dollars in fines agains the three largest online poker companies. Keep in mind these companies operate completely legally in most of the world and are even publicly traded. This is almost the equivalent of Saudi Arabia arresting the executives of the American movie studios because their movies are on the internet and accessible to citizens of that country who are legally prohibited from viewing them. Things are going to get ugly folks…

via the LA Times

The founders of the three largest online poker sites were indicted by the FBI on Friday in what could serve as a death blow to the thriving industry.

Eleven executives at PokerStars, Full Tilt Poker and Absolute Poker were charged with bank fraud and money laundering in an indictment unsealed in a Manhattan court. Two of the executives were arrested on Friday morning in Utah and Nevada. Federal agents are searching for the others.

Prosecutors are seeking to immediately shut down the sites and to eventually send the executives to jail and to recover $3 billion from the companies. By Friday afternoon Full Tilt Poker’s site displayed a message explaining that “this domain name has been seized by the F.B.I. pursuant to an Arrest Warrant.”

The online gambling industry has taken off over the last decade, drawing an estimated 15 million Americans to bet online.

In 2006 Congress passed a law prohibiting online gambling. Most of the leading sites found ways to work around the law using foreign banks, but prosecutors allege that in doing so they broke the law.

“These defendants concocted an elaborate criminal fraud scheme, alternately tricking some U.S. banks and effectively bribing others to assure the continued flow of billions in illegal gambling profits,” Preet Bharara, the U.S. attorney in Manhattan, said in a statement.

Read more…

Bloomberg posted an article yesterday about the rapid rise of “in running” sports betting in the online world. In running wagering allows for betting after a game has started – whether it be on an individual play, a quarter, or the remainder of a game. The growth of this form of sports betting has been remarkable and is projected to continue. Bloomberg writes:

For the bookies, in-running betting has become their biggest growth area. Five years ago it was considered a niche product, offered only by one or two bookies looking to differentiate themselves. Bookmakers now say in-running betting accounts for up to 30 percent of their revenue and that it is growing rapidly. Several predict it will account for half their business by 2010.

This new trend seems to fit the overall cultural trend of shrinking attention spans and increasing availability of “on demand” access to entertainment services. In a global society that demands instant gratification and a generation raised on 30 second youtube videos, the rise of in game betting should hardly come as a surprise.

The article also addresses the potential downsides of in running wagering including the problem of time delays in broadcasts and mentions the recent murder of a chinese couple involved in a plot to exploit this issue as covered previously by iBet.pro.

In running has brought its own issues for bookmakers, mainly because the televised feeds that they receive in their offices (and the ones you receive at home) are delayed from the live match. It is normally only about three seconds but, in some cases, it can be 10 seconds or longer.

This means that bettors can sit at racecourses, football grounds or even the Olympics with a laptop computer and a wireless connection and get bets on the match before the bookmaker sees it on TV. Most bookies now have a small delay in their bet acceptance procedures to help guard against this, but if the delay is big enough they will find themselves taking bets after something crucial has happened.

British police are currently investigating the deaths of a Chinese man and his girlfriend who allegedly employed spotters at British soccer matches to beat in running bookmakers in China and Southeast Asia, according to news reports. They are said to be investigating reports that Zhen Xing Yang had been murdered by either bookmakers upset at his scheme or by some of the spotters, who it is claimed he failed to pay for their work.

On an unrelated note, today is the first day of the 2008 NFL season – good luck to everyone placing a wager. You may want to read this article to remind you of how not to handle your betting.

In addition to sports betting, I occasionally like to play backgammon and blackjack online. Recently I noticed that more and more “celebrities” were appearing at the table – names such as Tom Cruise, Jon Stewart, and even Howard Stern. Looking for answers, I found this blackjack site that explained the phenomenon to me. Apparently people are registering these names as a form of online “vanity plates”. Using the names, the users are able to receive the VIP treatment at the virtual tables from both the site administrators and the fellow players. These names are called “Gold Usernames” and are frequently sold to the highest bidder through various aftermarket channels. In some countries this is considered a form of identity theft, even landing a Moroccan man a 3 year jail sentence for using the name of the prince of that country! The man was released after serving 43 days of his term due to pressure from petition signers and Human Rights groups around the world, but this case has raised awareness that in some instances, a username is not just a username. I can see this becoming an issue more and more in sports betting online as more and more “peer to peer” sites open up and folks are competing directly against other users rather than the house.

The U.S. Government is at it again. This time they’re going after the evil “casinos” within the virtual world of Second Life. These players are betting in the virtual currency of the Second Life world called “Linden Dollars”. The U.S. apparently thinks that this is a real threat to our security and this the crackdown has begun. If this weren’t a true story I think it would be a good humor piece for “the Onion“. As it is I find it sad and really discouraging. Is this really where we want our law enforcement dollars to be going? Where is Osama Bin Laden?

From the Inquirer:

Online gambling is illegal in the States, and the FBI had been running an investigation into Second Life to determine if it was breaking any laws, so it’s good to see that the war on terrorist funding has not been in vain. Obviously.

No word on whether this will appease the FBI or whether they will demand arrests of either Linden staff or gamers. But don’t expect Linden to stand up for your privacy if they come after you – Linden’s new Terms of Service states they will comply with all subpoenas from law enforcement to give away as much information about your as the Feds require.

Box Scores – web 1.0? Thats’s the case according to this recent Fortune Magazine article.

The replacement is the Winning Probabilty Added graph or WPA. From the Kansas City Star:

The concept of WPA has been around for almost 40 years. But the stat caught fire on the Web after the publication of last year’s The Book: Playing the Percentages in Baseball by sabermetricians Tom Tango, Mitchel Lichtman and Andrew Dolphin. The WE values currently in vogue were established in that book.

David Appelman, owner and Web master of FanGraphs.com, seized upon the WPA framework and incorporated it into his site, where you can find WPA statistics for every player, every team and every game. And you can look at these (and a lot more) both in numerical format or on easy-to-read graphs.

“What’s great about WPA,” Appelman said, “is that after the game you can quantify a player’s contribution to the win or loss.

Check out FanGraphs for more examples of WPA charts and how they might be used to improve your winning percentages.

A new trend I’m seeing these days are public gambling sites offering “Sure Thing” bets based on the principles of arbitrage, once reserved for hedge funds and financial markets.

Sure thing bets are a lot different than the “guaranteed” picks of the old days. In the old days a handicapper simply would promise that their picks would win or you wouldn’t pay. This can be hazardous to your wallet in a very short period of time. These days the picks that are identified require you to bet at two different sites or with two different individuals on an exchange. Becuase the variation of the odds are so great, no matter which team wins the match, you will be certain to make money – even when you subtract the vigorish commanded by the sportsbook!

Anyway, here is a list of links to sites offering “Sure Thing” bets. I haven’t been sufficiently motivated to set up the many sportsbooks accounts I would need to take advantage of these situations, but I’m starting to rethink that philosophy. On one hand it seems to be that a sure bet kind of defeats the whole excitement of gambling and turns it into a boring financial instrument such as a savings bond. On the other hand, that new Tesla Roadster would really look great in my garage Perhaps this will be the subject of a future post…

• Betbrain
• OddsExchange
• OddsExplorer

A new season of baseball is upon us and in it’s honor I’ve rounded up a list of some nice sites to help you to win more of your baseball wagers.

• Sportscapperisland.com offers 5 reasons to bet on baseball. From my experience #3 is right on the money:
  

  3. Out of all sports, baseball is probably the most well known for streaks. With each team playing five or six days a week, there are many more streaks to be predicted. Riding a hot team or fading (betting against) a slumping one at the right time can be a gold mine.

• Professor Bukiet of eGrandSlam.com presents his 2007 MLB Season Predictions. 110 wins for the Yankees? As a Red Sox fan, all I can say is I’m glad these games are played on the field and not on paper.
• Baseball-Reference.com offers a ton of baseball statistics for your analyzing enjoyment. The site has a clean design and is fairly responsive with not too many ads. I give it a thumbs up.
• A bit off-topic, but cool nonetheless, Liveboard looks like a neat little gadget for baseball fans. It basically is a wireless device that displays realtime baseball scores with LED lights in a device that looks like a baseball scoreboard. Although it’s a bit pricey at $299.00, at least they aren’t charging subscription fees.

Good luck with your baseball bets – I hope you all have a winning season. Go Red Sox and go Padres!

News.com has an interesting article about the IBM “Many Eyes” project. Basically, it’s a way that anyone can upload data and create visualizations of the data using various templates created by the folks at IBM. The templates include simple items such as bar graphs and pie charts as well as more complex constructs such as global maps and tag clouds. As you can see from the quote above, they are actively looking for sports statistics freaks to start using the service and so I thought I’d give it a try. I uploaded some simple NBA player data I got from Sportsinteractive.com and created the chart below (make sure to click on it to get the full idea).

Apparently there is a way to link different datasets together though I didn’t get that far. Anyway, it seems like a reasonably cool service. Here are some queries of the various visualizations that may be of interest:

MLB
NBA
(Sorry no good NFL or NHL data as of yet.)

If you find any cool sports visualizations or create some of your own, please post them in the comments section here – I’d love to check them out!