Episode 105 ... Brendan Poots (58:00)

Family in Perth, but he's Irish
Bet size versus volume of bets taken per match very important (bet sizing)
English Premier League match has average pool of $10-$20MM , AFL (Australian Football League) only $300,000
Bet size must be proportional to pool, must focus on liquid sports
There are only a few global sports betting exchanges
Advent of in-play sports betting, basically real-time now, not a binary outcome anymore
Win lose draw ... must consider the draws in many sports
Money comes in towards kickoff, odds tend to be farther off before then
"Having a bet" is an Irish tradition, "the joys of punting"
Studied chemical engineering in University
Played cricket in England, his sponsor was a bookmaker. he worked nights for him
Couldn't cut the mustard as a cricketer, switched to investment banking
2006 got scholarship to Columbia U., got his MBA
Didn't want to be lackey at age 33 in investment banking [also true for me with an MBA at age 30 after dot com bust]
Plus no jobs after Great Financial Crisis
Understood BetFair, 2008-2009 started building his own sports betting business
Made money on his own with sports betting, built short track record
2010 raised some money and started his "sports hedge fund"
Individuals now give him several hundred thousand dollars a pop to manage
Started out as a punter but quickly morphed into strategic betting
"Betting" "Gambling" "Investing in Sport"
Has offshore office in Gibraltar, AIFMD regulated
Australia-based fund, small fund, number of investors limited, investors must have $500K+
Everyone got hit in Global Financial Crisis, but sports betting uncorrelated, immune to crisis
Lot of smart people in financial world, tough to compete, esp. if you lack passion
He lacked motivation and passion for finance, but loved sports
He's obstinate and likes proving people wrong
He's good at compartmentalizing his loves, driven by numbers and opportunity, not emotionally invested in any one team
First investors were friends, but still had to capital-guarantee their investments
Sports betting is no longer a binary outcome
Betfair, Matchbook
Bad month -1%, good month +4%, he has taken the volatility out of it
Cherry picks the trades he makes, only acts when he can capture big premium
95-97% of his trades are hedged, will act in real time to offset bet
Typical trade lasts 15 or 20 minutes, by end of game he's long gone
Psychological aspect of taking your profit and running, plus the risk/reward ratio changes after first goal (for example)
Doesn't touch basketball (injuries throw off data)
Markets overreact to injured players, presents opportunity
European fund denominated in GBP
Need more than a smart statistician or mathematician, need one with an innate understanding of the sport
Need to understand momentum shifts in sports
AFL too small a market, just can't play it, liquidity isn't there, can't hedge, can't exit
His analysts don't trade and his traders don't analyze
American gamblers used to binary outcomes, don't get the hedging concept
Needs at least 25% premium (his price vs. market price) in marketplace for him to get interested, a.k.a., Ben Grossbaum's "margin of safety"
Trials trading strategies, builds database, backtests it against old results
Historical sports data is a commodity, easy to build a model
Real-time data you have to subscribe to
Ball possession used to be considered a useful statistic, not true anymore, just noise
People want to see volatility-adjusted returns, "number of negative months"
Match fixing, spot fixing still happens ... incentives not there at high levels of sport, just low levels
"Tennis players at low levels scratching around for a living"
Three things you need to know to get into sports betting:

there's always another race
bet what you know and understand
if you want to make money, do it in a boring way, slow and steady

His typical bet size is very small -- single trade max 3% funds under management (bankroll), typically 1 to 1.5%
Hit singles, not home runs (which are hard to find)
www.priomha.com
Twitter: @priomha