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Sports Handicapper Hoping to Upend Industry Closes in First Year

Sports Handicapper Hoping to Upend Industry Closes in First Year

(Bloomberg) -- Former Philadelphia Phillies pitcher Michael Schwimer thought his company could bring unprecedented transparency and mainstream appeal to a dark corner of the sports betting world. Now it’s rethinking the approach after just five months.

Schwimer last year launched Jambos Picks, a high-end subscription service that sold sports betting advice. The tout industry, as it’s known, has a reputation for corruption, misdirection and outright fraud, but Schwimer hoped that better business practices and the company’s predictive algorithms could build a legitimate business that delivered value for its clients.

On Tuesday, Schwimer said Jambos would shutter its paid-subscription service following the Super Bowl next month. He cited two main hurdles: Subscribers were having a hard time placing bets at the odds he was suggesting, and the service required a large bankroll to use properly. Despite warnings, he said, a minority of subscribers were unprepared to handle heavy losses early.

Sports Handicapper Hoping to Upend Industry Closes in First Year

“It still kind of caught me the wrong way and I didn’t like the feeling,” Schwimer said in an interview. The quick betting-line movements made Schwimer and the Jambos board doubt they could continue to be effective moving forward.

Jambos’s failure shows the spread of legal sports betting will be no sure thing for people and businesses that sprout up to support and profit off the industry.

Made Money

Schwimer declined to comment on how many subscribers Jambos had, or how much money the company made from subscriptions. He said the service ended up making money for 17-week subscribers who used it properly and was profitable -- even with refunds it gave during weeks and months in which the picks lost money.

According to Schwimer, it was becoming increasingly hard for bettors to place bets at the recommended odds because lines moved within minutes of the picks going out. He said the company has evidence that the movement was correlated to his picks being sent.

“The vast majority of our recommendations were moving very quickly,” he said.

Others in the sports gambling world, including professional bettors, have expressed skepticism. They’ve argued that Jambos wasn’t that influential, and that the liquidity in some of these markets (such as the first-half totals in a small college basketball game) was so small that lines moved with even the slightest of action.

Following the Super Bowl, Jambos will keep giving out some picks free. Schwimer said he believes there’s still an opportunity for a successful tout service, “just not the way we did it.”

He mentioned that it could either be an extremely expensive service for a select group of 50 or so clients, or a setup in which a sportsbook operator agrees to hold lines for a set period of time and allow the tout’s customers to wager up to a certain limit.

“I think there are a couple of ways that it could work,” Schwimer said. “I’m not sure that we’re ever going to do it again. I don’t know. But I’m certainly not going to close the door on anything.”

--With assistance from Ira Boudway.

To contact the reporter on this story: Eben Novy-Williams in New York at enovywilliam@bloomberg.net

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, John J. Edwards III, Rob Golum

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