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Carl Bialik’s article on billionaire Mark Cuban’s idea for a hedge fund related to point spreads is very interesting in terms of arbitrage and online gambling. Just recently, the US outlawed online gambling, forcing many poker and betting sites to close. As someone who has been to Las Vegas and made many bets, I never tried to “hedge” my bets by looking for small discrepancies from sports book to sports book. Now with the internet, Cuban can just click on the countless of sports gambling websites to find any bets and then decide what he wants to bet on. Unlike regular sports bettors, Cuban will just bet lots on games where he finds two points spreads for the same game that have different numbers. He would bet on the two different teams and hope for the games actual outcome to be between the two spreads so he wins both bets, but if it does not, then he wins one bet and looses one. While he wouldn’t break even because of commission’s fees, I think this idea is a good one. If you have billions of dollars to spear, then this type of strategy can net someone a lot of money. While you would take small losses(commission) all the time from bets that break even, hitting one bet would bank a lot of money. The main problem for small time internet users though is that they can not bet, because they don’t have offshore bank accounts like Cuban.

So the question is it fair that rich people can use the internet differently then the average US citizen? I believe there should be laws outlawing people like Cuban to still be able to bet on sports. While social network sites like Facebook and MySpace make millions, the government is taking away the common citizens chance to make money. Unless the US government brings back online gambling for everyone, then people like Cuban should not be exempt from the law.