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sports gambling

Sports betting vs. the stock market: Which is riskier?

“A large, steady company has a low chance of plummeting and causing you to lose all your money, but even Peyton Manning doesn’t cover the spread sometimes,” he said. He asked for his identity to be withheld due to legal concerns.

Manning is really, really good at what he does for a living. Gambling on football star Peyton Manning to win might seem like a safe bet, especially compared with picking winners in the stock market. While many stocks offer steady returns, investors sometimes hit the jackpot (think: buying Apple back in early 2009 or Tesla in 2012). Heck, even his commercials are funny. For example, a stop-loss order instructs a broker to dump a stock when it tumbles below a specific price.

To put it another way, the stock market is a lot more forgiving than the MGM Grand (let alone your local sports bookie).

“Betting is more difficult and riskier,” said one resident of Hoboken, New Jersey, who bets on illegal gambling sites and also invests in stocks. It’s easy to see why fans may be tempted to gamble on their favorite teams and athletes.

Related: How $2 billion Clippers bet could pay off

Gamblers and investors also have far different time horizons.

CNNMoney (New York) First published August 31, 2014: 8:14 AM ET

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Such hedging tools are not as readily or even feasible to sports gamblers, Fine said.

The same can’t be said for those who bet big on the Denver Broncos last Super Bowl. Gambling on sports may be more fun, but it’s definitely a more risky use of money than putting it in the stock market. And in neither instance can you be guaranteed to be correct,” said Randall Fine, managing director of The Fine Point Group, one of the casino industry’s largest consulting firms. People often invest in funds that buy dozens or even hundreds of stocks, which helps reduce the risk. And of course, they both hate to lose.

That’s the percentage of time that Stovall’s research shows the S&P 500 — the gold standard in the stock market — has increased in value during the years since 1926.

All or nothing: Gambling on sports tends to be a zero-sum game.

“You can hold onto your betting tickets all your life, but you’re not going to get squat,” said Stovall.

Related: 4 reasons September could be good for stocks

The betting appeal: Americans bet an estimated $380 billion each year on sports.

“A lot of people regard investing as gambling, but I frequently say no.

At the same time, investing in stocks actually carries higher upside potential.

But take it from one person who has lots of experience in both worlds. The stock might go up and down some, but it typically doesn’t go to zero.

They both believe they can predict the future, and they sometimes fall into the trap of making decisions with their hearts instead of their brains.

“You’re making a wager based on some facts and some intuitions.

In the long run, investors have the chance to make more money because there are fewer downside risks.

Related: Apple and 9 other stocks hit new records

Investors also have the ability to spread their money out among many stocks.

A stock can theoretically be held onto for an infinite amount of time, but a sports bet can end in the blink of an eye.

However, someone sinking $500 into Apple stock has little risk of losing that entire initial investment, especially in the short term.

Those are pretty good odds. A bettor gambling on the Green Bay Packers will instantly lose his or her entire $500 bet if Aaron Rodgers and his teammates fail to win or cover the spread.

And investors have greater access to tools that can minimize the risk of losing money. Which casino in Atlantic City, Las Vegas or Macau pays the bettor 73% of the time?” said Sam Stovall, chief investment strategist at S&P Capital IQ.

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But don’t let those similarities fool you.

Even the unlucky investors who jumped into the market at its peak in October 2007 eventually made their money back when stocks reclaimed their pre-recession levels in 2013

NY AG opens inquiry into allegations of fantasy sports insider betting

“A rose is a rose.”

The legal stance by Jason Robins of DraftKings that daily fantasy sports leagues are not a chance-based gamble has done nothing to tamp down what has become an intensifying national debate around the country.

The debate comes as the websites have flooded the airwaves with commercials in recent months touting how average fans became overnight millionaires by playing daily fantasy leagues. He said the casino industry sees fantasy sports as a potential partner “to grow both of our businesses.”

In letters to DraftKings and FanDuel, obtained by CBS News, Schneiderman’s office asks both companies to identify the employee or employees who may responsible for insider trading.

“It’s really the same type of person who, on the game side, likes chess,” Robins said. “It isn’t that different from the stock market.”

“This screams and cries out for regulation,” said sports betting law expert Dan Wallach during a different panel at the gambling conference, suggesting it could be a haven for money laundering.. He said his industry is much more likely to attract customers who play chess and the stock market than people who make bets at sports books.

Many in the highly regulated casino industry insist daily fantasy sports leagues are gambling sites, shouldn’t be treated any differently than traditional sports betting and, as a result, should be regulated. On the question of money laundering, DraftKings referred questions to a statement from the Fantasy Sports Trade Association that said the sites have “instituted monitoring systems to identify and prevent fraudulent or suspicious transactions.”

The daily fantasy sports industry has gone to great lengths to distance itself from traditional sports wagering.

draft-1.jpg

A screen grab from the Draft Kings fantasy sports web site.

Signing up for a DraftKings account involves choosing a username, providing an email address, clicking a box that says the person is older than 18 or 19, depending on the state, and providing credit card information. Others suggest the sites could be a potential haven for money-laundering.

Observers, though, believe that after spending hundreds of millions of dollars on advertising during football games, the spotlight on the daily fantasy sports industry may ultimately lead lawmakers and regulators to keep a closer watch.

Macias said the company takes a multi-layered approach to check age and identity. Daily fantasy sports allows online players to pick a roster of point-earning players from various teams for a single day of competition and win money, in some cases $1 million.

Robins cites an exemption in a 2006 federal law for fantasy sports that he believes allow his site and others including FanDuel to offer contests that normally spanned an entire season down to a single day. The mid-level content manager later won $350,000 at rival site FanDuel that same week, the Times reported.

Meanwhile, a New Jersey congressman has asked for a hearing on the legal status of daily fantasy sports, the commissioner of the NCAA’s Southeastern Conference has barred daily fantasy site ads on the SEC Network, and the casino industry’s American Gaming Association is looking into the industry as part of a broader look at legalizing sports betting beyond a few states.

Robins said fewer than 15 percent of the people using his site bet on sports the traditional way, either legally or illegally.

“Fantasy is real gambling,” said Dennis Drazin, chairman of New Jersey’s Monmouth Park Racetrack, during a panel discussion. The NFL agrees with their legal stance.

Robins, though, implied there should be no confusing his operation for a casino’s. And on Tuesday night, New York Attorney General Eric Schneiderman announced his office was opening an inquiry into the allegations.

He didn’t say where that number came from and didn’t take questions after the moderated panel discussion to clarify, walking quickly out a side door as reporters asked questions. DraftKings spokeswoman Sabrina Macias said later that the number is based on internal research.

The allegations, which amount to profiting from insider trading, have brought into question the practices of the fantasy sports industry. The AG’s office says this is in initial inquiry designed to allow the companies to provide a quick reply, and includes the names of possible employees involved.

The debate was a hot topic of conversation at the Global Gaming Expo in Las Vegas.

Two major fantasy sports companies are under fire over allegations that amount to insider trading, the New York Times reported Monday night. The CEO of the ubiquitous DraftKings website made no effort to get cozy as he sat in front of a crowd of casino executives at a trade show last week in Las Vegas.

“If it’s gray, our job is to make it black and white,” said Geoff Freeman, the association’s president and CEO. No other identification is sought.

An employee with one of the companies, DraftKings, admitted last week to inadvertently releasing data before the start of the third week of NFL games