November 9, 2015
What we’re reading this week
Daily Fantasy Sports
Lots of people are playing daily fantasy sports on the sites Draft Kings and Fan Duel with hopes of hitting it big. To put it in perspective: the sites will bring in a combined revenue of $60 million the first week of the NFL season. Vegas sports books will do about $30 million. These sites are driven by heavy marketing campaigns with Draft Kings purporting to payout $1 Billion this year. But who wins that money? Guys like Saahil Sud. Sud plays hundreds of contests daily and claims to bet an average $140,000 every day with an annual return of 8%. In his past career he was a data scientist at a digital marketing firm, having studied math and economics at Amherst College. He says he’s made more than $2 million so far this year. There’s a lesson in there somewhere…
More Daily Fantasy Sports!?!
At least one other person recognizes the harm in daily fantasy sports. New York Attorney General Eric Schneiderman ordered Draft Kings and Fan Duel to stop accepting entries in New York on the grounds that daily fantasy sports are gambling (yes) and gambling on sports is not allowed in New York (yes). Fan Duel responded, “The game has been played — legally — in New York for years and years, but after the Attorney General realized he could now get himself some press coverage, he decided a game that has been around for a long, long time is suddenly now not legal.” This is, actually, a decent argument.
Active vs Passive
Here is a very interesting article for investment nerds on why active traders underperform passive traders. Despite the fact that we manage money actively at Gainplan we believe many the same things that passive investors believe. This means that we do some cool things on both sides of the table.
Securities Fraud on Cyber Steroids
The title comes from U.S. Attorney Preet Bharara and his description of what went down on Wall Street regarding the 2015 indictment of Gery Shalon. Allegedly the crimes began in 2012 and are the genesis of a “brave new world” of computer hacking for profit. JPMorgan, E*Trade Financial Corp., Scottrade Financial Services Inc. and Dow Jones & Co. are among the hackers’ victims. This group was involved with allegedly running illegal Internet casinos, elaborate pump-and-dump stock schemes, credit-card fraud and fake pharmaceuticals. Most notably, they were responsible for the largest bank breach on record, including the theft of information from 83 million customer accounts from JPMorgan Chase. This article provides a detailed look at the timeline and scope of the crimes. Here is the recently unsealed indictment.
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