Pregame-Mutual-Fund
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RJ Bell, CEO and Founder of Pregame, provided answers to our questions about Pregame’s transparency. In his answer, Bell compared Pregame’s level of disclosure to the mutual fund industry’s disclosure. In his words:

I’m proud of the fact that our promotion approach is no different than the typical mutual fund. When a fund outperforms the market over X period, they promote that – without being obligated to promote the period which is less impressive. In both the case of Pregame.com and mutual funds, the raw data is available to consider for any time period the customer is interested in. Why would sports betting picks be held to a higher standard than mutual funds? Why should pick sellers be the only professionals forced to promote in a way that will turn off the average customer?

This is a misstatement.

Mutual fund advertisements are regulated by the Securities and Exchange Commission. In an attempt to protect consumers from misleading advertising, the SEC has laid out strict rules for how mutual funds can advertise their performance. If a fund ever references their performance, they must also disclosure their 1, 5 and 10 year performances (or shorter if the fund has not been around for that long). If a fund violates these rules, they can be sanctioned.

Meanwhile, Pregame advertises performance like this:

These are the three Pregame pros featured on the top left of the ‘Buy Picks’ page. As you can see, the sample sizes that are being advertised range from 5 picks to 29 picks. Now, if Pregame were disclosing at the same level of a mutual fund, they’d also have the 1, 5 and 10 year  (or lifetime, if shorter) records for each of these pros. But they don’t.

And if you try to find the 1, 5, and 10 year (or lifetime) record of any of these pros, the Pregame website will force you through hundreds of captchas such that it would take hundreds of man hours to determine these longer-term records. Over at Vanguard, one of the largest mutual fund companies, you can find the long term performance of any of their funds with a few clicks of your mouse. It literally took us less than 30 seconds to find.

No captchas. No clicking through calendars by day. No hiding.

The claim that Pregame engages in promotion “no different” than the typical mutual fund is either ignorance or deception. Or both.

 

One Response to “The Difference Between Mutual Funds and Pregame”

  1. Andy Seth

    was curious why you didn’t change your line of questioning with RJ on twitter yesterday from “provide us lifetime records of your pros” to “provide us 1, 5, and 10 year records for your pros.” given the way he is hiding behind this mutual fund disclosure defense, i’m not sure where he would have turned to hide.

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