Stock Trading Vs Sports Betting

While the continuous wobbly performances of stock markets globally persist due to lack of investors’ confidence, sports betting seems to be the latest attraction.

Recently, a university don won ₦58.9m in sports bet in Nigeria. Godwin Ighalo, a Professor of Computer Engineering at the Ambrose Alli University, Ekpoma, Edo State, won the sum of ₦58,945,553, after placing bets with just ₦800 in 1960Bet.

It is the biggest sum ever won in the history of sports betting in Nigeria. The sexagenarian accomplished the feat after placing bets on two different bet slips of ₦500 and ₦300. On the ₦500 ticket, Mr. Ighalo won ₦36,840,971.25 while the ₦300 slip won him ₦22,104,582.75.

An interesting critique on bettingresource.com attempts to compare sports betting and stock trading, while investorguide.com tries to differentiate between gambling and investing generally.

Traditional Gambler Vs Investor
Before comparing sports betting and stock trading, learn the difference between the traditional gambler and the non traditional gambler (investor).

Be it sports betting, stock market, playing poker or any sort of gambling, the traditional gambler will be a long term loser because they gamble without edge and proper money management. These traditional bettors are usually degenerates, problem gamblers or "action junkies." A non traditional gambler (an investor) on the other hand is someone who only gambles (invests) with an edge and proper money management for long term success.

According to bettingresource.com, sports betting attracts many traditional gamblers because of its simple nature and as a result traditional gamblers (long term losers) out number investors (long term winners). Stock market on the other hand rarely attracts any traditional gamblers because of its complex structure and as a result investors out number traditional gamblers. We know that investors are long term winners relative to traditional gamblers who are losers. And that is exactly why many consider sports betting as gambling (high risk investment) and stock trading as investing (low risk gamble).

But if you look at sports betting and stock trading in terms of investors perspective only, sports betting is a much safer play because it is easy to manage, cheaper in the vig (commission) and much cheaper in the bankroll. Both are a form of gambling and the kicker with both is same--in order to be successful you need to be skillful, especially with money management and finding the edge.

Sports betting is much easier to manage because most of the variables and information are publicly available and all you have to do is analyse everything to find the edge. Stock market on the other hand is more complex--monitoring the performance of companies is much harder than monitoring sports teams. There are too many unknown variables in the stock market that could affect the performance of your stocks. Often, these variables are not available to the public immediately and because of this it is really difficult to gain an edge unless you are an insider in the company or stock market. Insider trading is illegal but it is much more common than match fixing in sports betting.

When it comes to bankroll, sports betting wins hands down. Assuming you have the edge in sports betting and stock market, you are more likely to get much better return on your investment in sports betting than stock market.

However, sports investing and stock investing are viewed differently by government regulators. Governments around the globe encourage stock wagering, a nice respectable occupation in the eyes of most. Sports bettors, on the other hand, are shunned. They do not wear suits and ties. And in many cases, sports investors do not enjoy the support of the general public or the government regulatory bodies. Why? Taxes! We (bettingresource.com) could write a whole new article on this topic but for now let us just state the fact that it is much easier for the government to milk taxes from stock investors than sports investors.

Is Investing Good, Gambling Bad?
On its part, investorguide.com tries to differentiate between gambling and investing. Before differentiating between gambling and investing, it first defines gambling and investing from dictionary.com web site:

Gamble: "To bet on an uncertain outcome, as of a contest. To take a risk in the hope of gaining an advantage or a benefit."

Invest: "To commit money or capital in order to gain a financial return."

Obviously, the distinction isn't clear. In investing, are you not betting on an uncertain outcome? Are you not taking a risk in the hope of gaining an advantage or benefit? In gambling, are you not committing money? Are you not doing it in order to gain a financial return?

It would be hard to argue with the claim that investing is, on the balance, a good thing because not all types of investing are productive. Investing is widely regarded as the engine that drives capitalism. It tends to put money in the hands of those with the most promising and productive uses for it, and drives the economy gradually upward. Investors aren't merely betting on which companies will succeed, they're providing the capital those companies need to accomplish their goals.

Gambling, on the other hand, is not so clearly making a positive contribution. Gambling does tend to help local economies, but also usually brings with it well-documented unpleasant side effects; as gambling can be addictive and destructive, but investing can't. It’s up to the reader to decide whether gambling is, on the balance, a plus or a minus.

According to investorguide.com, the questions of whether gambling is morally wrong and how strictly it should be regulated are important. Governments generally frown on gambling (unless, of course, they're getting the lion's share of the profits, such as with state lotteries). Many religions frown on gambling (but they don't seem to mind the tithe –ten percent). There is no problem with a person being morally opposed to gambling, as long as that person knows exactly what he/she means by 'gambling'.

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