The Hit Rate Edge Sports Betting, which is currently promoting itself via Facebook ads, claims to offer “tax-free income” of 25% per month and “consistent income no matter what happens to financial markets”.
In a recent post on its Facebook page it claims it is a “complete no brainer” for savers earning no interest to get higher returns by investing in its betting scheme.
Who are The Hit Rate Edge?
The Hit Rage Edge does not have a public web presence beyond its Facebook page and does not openly disclose who is behind the company. A blog post obliquely refers to “our founder” without stating who the founder is.
However, in addition to its corporate Facebook page, THRE has a Facebook group called “The HIT RATE EDGE Sports Betting”. This group has two admins – THRE’s corporate profile and one Chris Legge. On its contact page, THRE also lists its email address as leggesolutions.co.uk. Legge Solutions Ltd is wholly owned by Christopher Raymond Legge.
So as per its contact details, The Hit Rate Edge = Legge Solutions = Chris Legge.
Legge / the not-so-mysterious founder claims to have “created many algorithmic trading systems over his thirty-seven-year financial services career that traded mainstream assets classes [sic], stocks, bonds, currency, ETFs, options, property derivatives” etc.
No further details of Legge’s prodigious career are provided. Legge’s LinkedIn profile lists his only position in his entire career as the aforementioned Legge Solutions, which was founded ten years ago in January 2010. According to Companies House, Legge was born in April 1977, meaning he started his career in finance and developing algorithmic trading systems at the tender age of seven. When I was seven I was only just starting to get to grips with Pac-Man.
How safe is the investment?
Although anyone can make 25% from a good month of betting (you can generate a 100% return in 30 seconds from roulette), it is impossible to consistently make 25% month in month out. Betting is a zero sum game and the expected return is zero, minus costs.
That is a side issue however, as even if The Hit Rate Edge’s magic 25% per month algorithm was real, it would still be breaking the law.
The Hit Rate Edge’s offer to take investors’ money and generate passive returns via gambling amounts to a collective investment scheme.
While there are references to “software licences” and “the customer’s own betting account” which may represent a pretence at not offering a collective investment, THRE’s promotions make it clear that day-to-day control of investors’ money is passed to THRE.
The HRE system automatically distributes its profits each time your account increases to a predetermined income level; 10%, 15%, 20% or 25%. The frequency of income payments is dependent on the level of profits generated by the HRE system. The HRE software automatically withdraws profits from your betting exchange account to your bank account.
Running a collective investment scheme in the UK requires authorisation from the Financial Conduct Authority. As does issuing financial promotions, including its Facebook ads. THRE is not regulated by the FCA, so by running a collective scheme and issuing financial promotions, they are committing a criminal offence.
The only reason THRE hasn’t registered with the FCA and opened a collective fund the legal way, is that in doing so they would have to reveal that their magic formula that produces 25% monthly returns doesn’t exist.
As THRE has no magic formula producing 25% monthly returns, the only means it has of paying returns to investors is the investors’ own money, making THRE a Ponzi scheme.
THRE refers in its ads to limited liquidity in the betting markets, as a means to justify time-limited FOMO marketing (Fear Of Missing Out). This just emphasises that their claim to be able to generate returns of 25% per month (which equates to 1,355% per year) is nonsense. If you had a magic algorithm that generated returns of 25% per month, but it only worked for a limited amount of money, you would not offer it to random people via Facebook ads and limit your own returns.
Should I invest with The Hit Rate Edge?
This blog does not give financial advice. The following are statements of publicly available facts or widely accepted investment principles, not a personalised recommendation. Investors should consult a regulated independent financial adviser if they are in any doubt.
Any investment offering a ROI of 25% per month is in reality a virtually guaranteed loser for all but those running it. The mathematics of Ponzi schemes guarantees that the vast majority, if not all, of investors will lose their money.
Do not invest unless you are prepared for total losses.