The operator of Bettor Investments, one of the first sports betting mutual funds to be founded in Nevada, is under increased scrutiny following reports that he has twice before filled for personal bankruptcy.
Matt Stuart, 46, founded Bettor Investments under a 2016 law that allows for “entity betting” in the state of Nevada. That rule allows authorized businesses to make sports bets on behalf of investors from around the world, with the business and the investors sharing in any profits. In many ways, the groups act as mutual funds, with sports wagering as an investment vehicle that hopefully provides positive returns.
Manager Had History of Financial Issues
On Saturday, the Las Vegas Review-Journal reported that investors only recently learned that Stuart had a history of bankruptcy, leading some to question whether he should ever have been allowed to manage their money. This would have been difficult for interested parties to discover, as the information was only available by searching a court database. Court documents confirm that Stuart first filed for bankruptcy in 1994.
This is not the first sign of trouble for Bettor Investments. In December 2016, Stuart told investors that he would no longer place bets through CG Technology anymore. This effectively ended his betting for the group, as CG Technology was the only sportsbook to take bets from entities due to the regulatory requirements to do so. CG Technology also helped craft the laws that allowed for entity betting.
The Review-Journal obtained emails that showed Stuart had heated discussions with CG Technology over the regulatory demands of entity betting. The sports book refused to tell Stuart what they were doing to promote the new industry, while Stuart balked at requests for more information on investors.
“[I] am NOT going to continue to make wagers with CG Technology,” Stuart told his investors by email in December 2016. “Why should we help them price betting lines so they can squeeze an additional 3-4 percent in order to make back some of those fines levied on them? NO! This ‘customer’ is NOT coming back!”
Investors Report ‘Radio Silence’
Last month, clients told the Review-Journal that Stuart had stopped responding to emails and other communications requesting payment of outstanding promissory notes. That led to complaints being filed with the Nevada attorney general and secretary of state.
“Myself and a great number of similar investors have been defrauded out of the money we put into Bettor Investments,” client Todd Thomas said in his complaints to the secretary of state. “Matt has defaulted on his monthly investor payments since approximately December and has gone radio silent to investors asking for their money back.”
Given that only about a half-dozen entity betting firms have been set up under the law, fans of these groups fear that the problems at Bettor Investments might sink the already struggling industry. According to Thomas, however, that might not be such a bad thing, at least in the current environment.
“I thought the idea of sports mutual funds was cool, but it seems there is little to no regulation,” he told the Review-Journal. “I wouldn’t touch such a fund again with a 10-foot pole.”
