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Game On: Sports Finance Poised to Make a Major Play in the Stock Market

Let’s say you’re a sports enthusiast. And, let’s also say that you like to invest in the stock market. You could blend your interests by investing in a stock like Madison Square Garden Company, a powerhouse in live sports and entertainment venues. Or, you could “Just Do It” with Nike Inc., the leading global designer of athletic footwear and apparel. But, if you do your research you’ll see that Nike’s North American sales struggled to keep pace with that of their rival, adidas who enjoyed a strong financial performance both in North America and China during the past year – so choose carefully.

But what if there was a different way to invest in sports? What if you could invest in shares of your favorite sports and your favorite teams? And, what if your earnings – and losses – were based on their performance each game?

Well, if you’re a fan of the NFL, NBA, NHL, or MLB sports organizations, AllSportsMarket (ASM) has been very busy developing financial technology that will offer a new playing field to experienced investors – and promises to open up the world of investing to many people who, until now, have sat in the bleachers.

For the last three years, ASM has operated a beta stock trading exchange that allows participants to buy and sell shares with “learning currency” – think “Monopoly” money – in sports teams, just like traditional stocks, and earn dividends when their teams perform well. Global Sports Financial Exchange, Inc., is the California licensee of ASM’s financial technology platform, and their CEO, Zack Ward just may look familiar to you.

As a veteran actor, Ward has appeared in many movie and television roles including “Transformers,” “CSI,” “Lost,” and “American Horror Story.” But, his first movie role as a child actor is his most notable. He played Scut Farkus, the bully in “A Christmas Story.” The holiday classic airs every year earning Ward a new generation of fans who love to hate him.
“It’s an honor and blessing,” said Ward. “When I walk into a room I get an extra 15-second grace period of people being nice to me before they decide whether or not they really hate me.”

The World’s First Sports Stock Market™

So, just what is sports investing? How does the ASM exchange work?

Ward explained these details and more at length in a recent interview with “Advisors Magazine.”

“The sports stock market is exactly the same thing as a stock market; you buy shares in your team, and the shares are performance based. So, if you buy 100 shares of your favorite sports team, and they win their game, then the share value goes up in price. At the end of that game, you get dividends. Also, at the end of each quarter, for the teams that have continued to win, you get dividends from each of those teams. When your team loses, your shares go down in price, but you still keep all your shares.”

Some may be thinking, is this just gambling in disguise? Or, is it just another version of daily fantasy sports?

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Emphatically, it is not according to Ward, and The New Sports Economy Institute (NSEI) which is the parent company of ASM.

NSEI, whose mission is “transforming society through sports,” is a 501(c)(3) non-profit, tax exempt organization registered in California, and approved by the Internal Revenue Service.

“Unlike gambling where if you put down $100 on a game, as soon as they lose that game, you’ve lost $100, you don’t get anything. But when you buy stock in your team, the value may go down, but you still have your shares,” explained Ward. “For instance, if you invest shares worth $100 dollars in your team and they lost the game, the price of your shares may have gone down to $85. The next time your team plays a game, those shares may go up in value.”

To further distance the sports stock exchange from gambling, and align it with regulated investing Ward added:

“Also, during the game, you can adjust your position in real time. So again, unlike gambling where you put your money down and make a bet, and no matter what happens you can’t change your bet. Once the game starts, you are locked in. With investing, you can make real-time adjustments to your position in the market based upon the information you’re getting.”

As an investor, you can watch a game and either purchase additional shares, or sell your shares based on your judgement of the team’s performance, and your own prediction of the outcome. For instance, Ward offered the example of a baseball game where an investor’s team has lost the first three innings. As the shares have gone down in value, the investor may decide to purchase more shares at this time at a lower value because he knows that a couple of heavy-hitters are on deck, and the shares may go back up in value. Another investor may opt to sell her shares to reduce her loss if she feels her team can’t make a comeback.

Regulation

Technology entrepreneurs, Ace Underhill and Chris Rabalais are the inventors and creators of AllSportsMarket. Over the last five years, Ward has helped them with branding and communication to tell the story of this new sports investing platform.

Together, the team created the Sports Integrity Protection Amendment (SIPA) for the state of California. The purpose was to bring awareness to the sports stock exchange market so that the state could create legislation and be aware of it prior to the platform becoming regulated. While SIPA did not become a law, it did help the ASM team show a history of transparency.

As the company continued to move forward towards a regulated market, Ward was appointed as CEO of Global Sports Financial Exchange to oversee branding, and as Ward said, “...to create the conversation and make it digestible for people.”

Explaining the concept and the financial technology to politicians and the legislature has been a challenge because of the stigma of gambling. What’s required is a paradigm shift for society.
“The only way that people have connected sports and money for the past million years has been through gambling – and the problem with gambling is that the house always wins,” said Ward.
For the last three years, ASM’s sports stock exchange has been a beta test market.

“Like any type of platform, you have to ensure that your algorithms and that the platform are working perfectly, that there are no bugs in the system, and that everything is 100 percent transparent, so that it can be auditable,” Ward said, adding that this helps ASM show the state, the SEC, the U.S. Commodity Futures Trading Commission, as well as federal regulators, how the system works “so they can look at it an understand the process perfectly.”



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Some transactions on ASM’s beta platform have been conducted with learning currency. Those interested in participating can go to allsportsmarket.com to sign up. You will be given $2,500 in learning currency to start making investments and create your “sportfolio.”

Another version is the limited money “pilot market” which trades real money.

Ward referenced the track record of Elon Musk’s, PayPal as an example of a company that regrouped after its initial launch to follow the proper protocol dictated by the rules and regulations of the federal government. On the flip side, he points to the daily fantasy sports industry, whose legality is determined by each state, and has been the subject of many lawsuits across the country. ASM wants to follow the path of the former.

“Our goal, learning from the people who have come before us when it comes to financial technologies, is to make sure that we are transparent, and make sure that we abide by all federal regulations before we start excepting monies,” said Ward.

New Path to Financial Literacy

The NSEI mission also states that its objective is to “create a strong economy with strong ethics and bring financial literacy to the masses via sports trading instruments.”

According to Standard & Poor’s Ratings Services Survey, “Financial Literacy Around the World,” the U.S. adult population placed 14th in financial literacy rankings. Currently, only 17 states require high school students to take a course in personal finance. Many financial advisors want to see financial education for Americans start in grammar school – not in early adulthood once they start working and managing their earnings.

Ward suggests that participating in ASM’s sports stock market is a great way for parents to teach children about investing. Investment is put inside a lens that children can relate to.

“If you try to talk to your 10-year-old about market fluctuations and dividends, their eyes are going to roll back in their head, and you’ll lose them. But if you ask them, ‘What’s your favorite team?,’ they’re going to tell you. If you explain that you’re then going to buy shares in that team and watch how they progress, by the end of that season, your kids are going to understand the ebb and flow of a market. They’re going to understand the difference between investing money and wasting money,” said Ward. “So now when they’re in their 20’s, they may be set with enough financial literacy to make good decisions because it’s been engrained in them through the thing they love the most, and can enjoy with their parents – sports and their favorite team. They didn’t even know they were getting educated.”

When ASM started the beta test, they were at a $100,000,000 market cap of learning currency. With some 7,000 beta investors – or sports traders – across 81 countries over the last three years, the beta users have raised the market cap to over a billion dollars according to Ward.

“My ambition in my life over the last 38 years has been in the entertainment industry, and I’ve been very fortunate in my levels of success. However, my mission is, ‘What does the world need?’” said Ward. “I think this can do something incredible bringing investing to people who would never consider it before, and that could change their world.”

“Gambling has its place in society. That’s going to be for everybody to make their own personal decision,” he said. “But here are the facts: gambling built Las Vegas; investment and the stock market built the United States of America.”

 

For more information on AllSportsMarketing visit: allsportsmarket.com

 

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