Sports Betting Hedge Fund you say?  Someone’s diving in head first.

In news that will likely have all of us living on the street panhandling for change within a years time, the well groomed Darren Rovell, of CNBC, reports that sports betting hedge funds may be the wave of financial gain (and likely ruin) in the very near future.  The idea, floated some years ago by Mark Cuban (who then probably received an expletive filled phone call from David Stern), has now become a reality thanks to a London based group called Centaur (ARod, naturally, would like to know more) and it’s fund, Galileo.

Galileo’s managers analyze and trade the betting markets, taking the emotion out of the betting game and putting quantitative analysis in its place.

“We have unique software we’ve written over five years that ensures we purely trade on statistics and probabilities,” said Tony Woodhams, managing director of Centaur. “The process is very clinical, which is our edge.”

Besides emotion, Woodhams said that the sports market has a lot of mispricing, with some bookmakers that don’t often set the best lines for every game. The market isn’t effected by the economy and there’s no intervention from outside parties like a central bank or a government.

Those who got in on the ground floor of the fund have invested a minimum of $150,000. Woodhams said there are fewer than 20 founding investors, with the goal of growing assets under management to $100 million over the next two years.

Woodhams says the sports hedge fund’s projected rate of return is 15 to 25 percent. That’s after fees, which include a 3 percent management fee and a hefty 30 percent performance fee on net profits.

The fund will be betting on soccer, tennis, cricket, horse racing and golf, with plans to expand to the NFL and baseball over the next year.

Their strategic plan…bet heavy on anyone playing the Browns.

[HT: TMac and The Sporting Blog]