In a normal year, sports bettors would be firing away on regular season MLB games, as well as the NHL and NBA playoffs. Over the past several months of the COVID-19 shutdown, with no major U.S. sports to wager on, many professional and recreational gamblers have turned their attention (and bankrolls) to the stock market.
Brokerage firms around the country have reported a spike in trading activity since the sports world was forced to shut down due to the coronavirus pandemic. The lack of pro sports betting options in conjunction with extensive time to watch financial shows instead of Sportscenter has added to a rise in day-trading during the pandemic.
Hearing that many Americans, specifically those with moderate incomes, see the market as a means to make money during the pandemic is equivalent to fool’s gold. Realizing that average everyday hard-working Americans, most likely unemployed, made significant bank transfers for stock trading on a daily basis is alarming.
In both sports betting and investing there are many strategies that can be used and individuals need to come up with a disciplined plan. With sports betting, the fundamental approach involves researching teams and watching games to gain an edge. A technical approach to betting involves utilizing team momentum and things like ATS (Against the Spread) trends to construct models. However, many are quickly learning that the stock mark—especially during these uncertain times—is nearly impossible to predict.
Sports gamblers looking for a thrill often associated with the rush of hitting a five-team parlay are learning the hard way: Wall Street is harder to beat than the sportsbooks. The best sports bettors in the world only win 55 percent of the time. Historically, day traders tend to lose at an even more staggering rate.
Dave Portnoy, founder and CEO of Barstool Sports, told Business Insider that “he deposited $3 million into an E-Trade account”. In addition, as all Sirius listeners are aware he has gone as far as to change the name of the company's daily gambling radio show from "Picks Central" to "Stocks Central."
In his defense, the shrewd CEO also made a very candid admission: "to be very clear, I have zero clue what I'm doing."
Back in April, Portnoy stated he had seen losses in his trading account to the tune of $647,000. Most of us do not have that kind of capital to lose, but it sends home the message we all need to hear. Don’t attempt to jump into sectors you are not familiar with—especially during a pandemic when you likely have a mortgage to pay.
With the National Hockey League already on its way back and the NBA, MLB and NFL are all likely to follow, will the new day traders stick around when there are games once again to bet on? It takes a lot of time and effort to pay attention all day to the market. I believe it's fair to conclude that there will be a natural decline once sports return and most Americans return to their jobs.
As we know, for most, beating the sportsbooks is not the easiest of endeavors. However, from what the last few months has taught us, sports betting is easier to beat than trading stocks during a pandemic where “expert advice” changes by the second and the channel you tune into. Just take a look at infectious disease expert Dr. Anthony Fauci who recently told 60 Minutes: "There's no reason to be walking around with a mask." If that advice can change so rapidly, imagine trying to determine the ebb and flow of investing in companies that make the vitally essential face coverings.
**Shrugs** Give me a moneyline underdog parlay, please?!
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