SEC files charges against Nevada sports betting mutual fund
The U.S. Securities and Exchange Commission filed multiple fraud charges and violations against the founder of one of the first sports betting mutual funds in Nevada, which raised $145,500 from roughly 70 investors in more than 20 states.
The charges against Bettor Investments, formerly of Reno, and founder Matt Stuart come more than a year after several of Stuart’s clients told the Las Vegas Review-Journal he had gone “radio silent” and was not responding to requests to return their money.
“Nobody was able to communicate with him whatsoever,” said Gary Lowitt, one of the investors in the fund. “He became a ghost.”
Stuart registered Bettor Investments in 2015, shortly after a law was enacted that authorized business entities to place wagers on behalf of investors from around the world, with investors sharing in the wins and losses.
Between 2016 and 2017, several of Stuart’s clients invested between $5,000 and $10,000, according to investors. The fund’s minimum was $500.
Stuart had a history of mismanaging funds. Before CG Technology ran a background check and gave Stuart permission to place bets on behalf of Bettor Investments in March 2016, he had filed for bankruptcy twice.
In late 2016, Stuart told investors that he no longer would place wagers through CG Technology. He told the Review-Journal that he shut his fund down because of regulations and concerns over the health of CG Technology, which had been fined for an illegal gambling and money laundering scheme.
He refunded about $70,000 to approximately 15 investors and converted the rest into 12-month promissory notes with “guaranteed” 14 percent rates of return, according to the SEC.
The notes required Stuart repay $136,800 to investors when the promissory notes became due, but Stuart only had about $517 on-hand to wager, and Bettor Investments suffered losses of almost 30 percent.
When investors started reaching out to Stuart once the notes came due, he shut down the Bettor Investments website and stopped responding to phone calls and emails, they said.
After more than a year and a half of waiting, Lowitt said he still hasn’t been able to reach Stuart. According to the SEC, the 47-year-old resides in Post Falls, Idaho, where he works as a casino dealer.
“I don’t expect to get the money back. I don’t think Matt has the money,” Lowitt said. “As far as I can tell, the whole idea of sports entity wagering has basically fallen apart. It was an interesting idea, but I don’t think it was well thought out by the state of Nevada.”
Contact Bailey Schulz at bschulz@reviewjournal.com or 702-383-0233. Follow @bailey_schulz on Twitter.