Way back in 2004, Mark Cuban, an entrepreneur as well as the owner of the NBA's Dallas Mavericks, expressed interest in starting a sports betting hedge fund. Cuban wrote on his Blog Maverick blog that sports betting had several advantages over investing in businesses, including better information (i.e., local newspapers cover teams every day), detailed statistics, and no such thing as insider information. 

Cuban never started such a fund, but in April 2010, a London investment company called Centaur launched "Galileo," the first-ever Managed Sports Fund. Galileo sought to generate returns through sports betting. The plan was to bet on soccer, tennis, cricket, horse racing and golf, and then to expand to the NFL and baseball. Last month, however, Galileo advised investors that the fund was going into liquidation and there was no money left, Journal Live reports. Altogether, Galileo investors lost approximately $2.5 million.

Back in April 2010, one of Centaur's managing director projected a 15-25% rate of return based on the fund's "unique software" that "ensures we purely trade on statistics and probabilities. The process is very clinical, which is our edge.” As Wager Minds notes, one big red flag possibly overlooked by Galileo investors was that the fund was not regulated by the UK's FSA, but rather by the Gibraltan government.