Chris Connelly of Contrarian Investments talks to EGR NA

EGR North America (EGR NA): You’ve been up and running for just over a year now, how’s it gone?

Chris Connelly (CC): We had some hiccups early on with the regulatory process. That was new but we’ve navigated that and now everything’s dialed in and running smoothly this year. Performance-wise, we started well but struggled in the second half of the last NFL season. We generally profit when the books do well because we are contrarian and taking on the public, and the books did very badly in December and January. But we are climbing out of that now.

EGR NA: Has it been easy finding investors?

CC: The initial investors were people who’d followed my success before starting the fund, and it’s grown organically to 32 investors with three more pending approval. It’s people looking to diversify their holdings and now I have investors all over the US and a couple of foreign investors as well.

That said, it’s not to the point I thought it would be. I thought we’d grow a lot faster. I’ve always known sports betting to be an alternative asset class but people in the US have a hard time separating gambling from sports betting. There’s a negative stigma to it still which has created a challenge but at the end of the day if people see a return on their money it doesn’t matter where it comes from. Legalization will help these issues too.

EGR NA: What impact do you see that having?

CC: I think that’s going to be a big time plus to us, apart from that legitimization. Up to $150bn is wagered offshore compared to $5bn wagered legally in Nevada, so a legal market will be much more liquid. It gives us a great opportunity to manage a larger fund without moving lines against ourselves.

EGR NA: What are the biggest issues you’ve faced?

CC: One of the downfalls with this is I only have one sportsbook that accepts mutual fund wagers – CG Technology. So when the lines are not there, I have to pass. That’s another thing that will change with legalization. There’ll be more opportunities, like a betting exchange as you see in Europe. It’s also been tough dealing with investors. I did this professionally for four years before the fund and I did well. But having investors weighs on you. My style is contrarian and going against public perception and investors don’t like to see you’re invested in the Jaguars and the Browns. We’re betting numbers not teams but that takes some explaining. The pressure of dealing with other people’s money is greater too. I know how hard it is to earn money in this and I want to repay the people who’ve put faith in me. It’s a lot more stress than if it was just me.

EGR NA: We’ve seen several funds similar to yours shut down and still only CGT takes bets from them. Is this concept doomed not to take off?

CC: I still think there’s a great opportunity in this market and I’m surprised it hasn’t taken off more than it has. The opportunity here far outweighs the returns I could produce in the stock market. We’re not going up against computer algorithms, we’re going up against the betting public and I think there’s a lot of opportunities to produce a return.

EGR NA: What kind of money are you moving?

CC: Per play, it depends but around $16,000 on average. I was betting around $3,000-5,000 a play before, so I’m not making a huge jump with other people’s money.