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May-01-2007,
Navigating the Offshore Minefield: Asset Allocation Post-UIGEA...By Jay Graziani

With March Madness now behind us, many punters will take their betting down a notch, lowering their account balances until August. Lack of betting action is not the only reason to reduce your cash exposure offshore - the logistics of enforcing the UIGEA will be revealed over the summer, lending uncertainty to the financial future of the offshore gambling industry.

Many players are now caught between the proverbial rock and hard place. They may want to draw-down offshore balances to protect against an industry collapse, but they also realize that money that reaches U.S. soil may never make it back out, leaving them in a jam come August when it is time to reload those accounts for football season.

The solution is two-fold. First, realize that all of your offshore money is at risk to at least some degree, so anything that you cannot afford to lose should be withdrawn from sportsbooks and put into your bank account or under your mattress. Second, take a careful look at how to allocate your remaining funds to minimize risk while maximizing the options and opportunities available offshore.

Sportsbook selection is essential in today's marketplace. One clear effect of the restricted market participation brought on by the UIGEA has been more variation in pricing between outlets. Small scalps have been available, and opinionated lines seem much more common. With many participants unable to transfer money quickly between accounts, being funded at the right spots can give you first crack at favorable or rogue lines.

Diversification is also essential due to the increased volatile of the industry. Sportsbooks that are here today may be gone tomorrow, taking a nice chunk of your bankroll along with them. For the average player, spreading the bankroll among 5-8 different sportsbooks should provide the right mix of line variation, safety, and wagering power.

You should look to divide your bankroll by 3 categories:

All-Purpose Sportsbooks. These are the Bloomingdale's of the offshore world - one-stop outlets to cover almost everything you might want, while providing stability and reputation. The Greek, WSEX, and Bookmaker/CRIS fall into this category. Their "sister" books can also be included, most notably BetJamaica, Matchbook, and BetDSI. These shops will book action on most sports and props, although the lines will be a little tougher to beat than at smaller operations. At least 40% of your total bankroll should be parked in 2-3 of these types of books for general wagering and safety, with no more than 20% at any one group.

Second-Tier Sportsbooks. Another 40% of your bankroll can be spread around at slightly less-established operations. Look for books with useful options like reduced juice, baseball dimelines, free half point days, cash or free-play bonuses or other perks. Opinionated lines are also a key characteristic. Legendz, Bodog, Tradesports, and 5Dimes are three operations in this category that are well-regarded and likely offer value to most bettors. Keep no more than 10-20% of your bankroll at any one operation.

High-Risk Sportsbooks. Sportsbooks lacking established track records should be mostly avoided in the current environment. However, with the added risk can come added reward, usually in the form of either cash bonuses or slow-moving (or just outright bad) lines. When bonus-hunting, avoid excessive rollover requirements. In today's environment, the shelf life of any operation is far from guaranteed, and agreeing to play-through requirements that will take weeks or months to meet will cause added stress in the event of adverse news. Play up to 20% of your funds in these books, with no more than 10% of your bankroll in any single account. Even with a 10X rollover requirement, this small of an amount should be clearable within a few days by any player. Keep a careful eye on any high-risk books that you decide to patronize so you can quickly withdraw if a slow-pay situation seems to be developing. Withdraw your funds as soon as you have extracted the value from the account - this means immediately after meeting rollover for bonus hustlers. For players playing into weak/slow lines you may end up keeping your account active until you get booted, but you should actively draw down your account balance to lock in profits and minimize downside risk.

Within this framework, you should make sure you incorporate reduced-juice options. With the exit of Pinnacle from the American market and the ominous future of Cascade, low juice is a rare commodity offshore. Currently, the best low-juice opportunities are found on the betting exchanges. For Americans, Matchbook and Tradesports are the main options. 5Dimes, BetRoyal, BestLine, and Guardian all offer at least some low-juice options. For baseball bettors, keep in mind that many books are offering dimelines, including WSEX, BetJamaica, BestLine and ABCIslands. 5Dimes offers a dimeline and nickel overnights that are of tremendous value to smaller players.

For a typical "recreational" player with a $5000 bankroll, a reasonable allocation may look like this:

Matchbook: $1000 - provides low-juice option and safety
The Greek: $1000 - lots of betting options, safety
5Dimes: $1000 - Reduced juice and lots of betting options and props
Tradesports: $750 - another low-juice option
BoDog: $750 - low limits but some value on props and inflated public lines
Betroyal: $500 - cash bonus and opinionated lines and props

This allocation gives a 2% flat bettor six line-shopping options with the funding to make at least five normal-sized bets at each book. This allocation also ensures that no sportsbook holds more than 20% of the total available funds, to minimize damage from delayed withdrawals or sportsbook failure.

05-01-07
Jay Graziani
MajorWager.com
graziani@majorwager.com



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