Hi Guys. I would like your input about this business model, any comments (negative or positive) would be greatly appreciated.
Before I get flamed, some background. I'm an engineer, with an MBA in a top business school (not bragging about that), deep understanding of finance and math, 15 years of business and entrepreneurial experience, 5 as a professional investor in poker (I don't consider myself a gambler) as a player and as the owner of a successful poker business (we invest professionally money in poker games through our trained players).
So, I was thinking about a sports betting business with the following model:
- Starting with soccer, and focused on lower and unknown leagues -2nd division Somalia, to say something-. Starting with bets on 15 different leagues (of course available either on bookies or exchanges)
- Based on "quantity" (volume), around 300-500 bets per month mainly on O/U and 1x2.
- We have detailed historical and statistical info of those unknown leagues for the last 5 years, and people updating/capturing latest results and new leagues every month.
- We have a team of analysts doing modelling (using all the knowledge about soccer created from the last 30 years by scientists - not our own models) and checking weather
- We have some IT skills, so reporting, betting and modelling are pretty automated
- We will NOT use news, injuries or info that cannot be translated in a math model for our decisions.
- Bets will be made using EV as the measure and we will take -EV bets (maximum -2% or -3%), based in our belief (and extensive scientific research available) that even closing odds are not the greatest predictor (they are good, not great) of real odds.
- We well be using 1% Bankroll for O/U and 0.5% for 1x2 (is not Kelly optimal but so far our measure of edge is pretty uncertain).
- We believe can reach 62% hit rate on O/U, and 60% on 1x2
- Our bankroll will start in the USD thousands
Comments? Complaints? In your opinion what would be the biggest issue for this model to work? Is it viable? Can we reach 5% ROI? How long before going broke ?