Of all the ways sports fans can invest in their favorite athletes and teams, collectibles are an increasingly smart choice.
In the month of January 2021 alone, US bettors wagered a record $3.8 billion on sports, with Nevada leading the way among individual states at a whopping $646 million.
To put those numbers in perspective, that $3.8 billion figure is greater than the estimated net worths of Oprah Winfrey ($3.5 billion), Michael Jordan ($2.2 billion), and the entire collection of Kardashians and Jenners ($2 billion).
Most shockingly, thanks to the state’s tax laws, Nevada’s return for January stands at nearly 29%, sucking $52.3 million in profits out of the sports betting economy and into government coffers. If extrapolated over the total nationwide handle, that would mean US bookmakers crushed bettors to the tune of over $1 billion in a span of just 31 days.
But let’s talk about a separate industry also centered on placing wagers on athletes and teams.
The trading card market, specifically related to the NBA, has been busy setting its own records of late, growing by a reported 373% in 2020. Let’s look back at January of this year: Michael Jordan’s iconic PSA 10 1986 Fleer card, which began the month trading at $222,000, sold for as high as $720,000 by month’s end, an increase of nearly 225%.
Similarly, LeBron James’ Topps Chrome rookie card appreciated by 94% over that same time period, Steph Curry’s Topps rookie jumped up 109%, and Kevin Durant’s Topps Chrome rookie increased by 39%.
But beyond this nearly unparalleled growth — we’re setting aside Bitcoin here — there are a number of factors that make trading cards a better investment than sports gambling. Unlike betting, where a single loss reduces one’s “investment” to zero, significantly few sports trading cards have ever seen their value drop by such an extreme degree overnight.
Additionally, while a single betting ticket will never return more than 90-95% ROI (the bet amount minus the juice) and holds no additional future value, educated card investments offer returns of hundreds and even thousands of percent, and have historically only continued to appreciate the longer they’re held: Bill Russell’s 1957 Topps card grew from a price of $4,000 in 2004 to nearly $350,000 in 2021.
Of course, just as not all bets are created equal — with the ultra-popular parlay bets generally offering the worst odds of all — not all cards are, either. One only needs to look at those investors speculating on young, unproven players at the peak of the 2020 card boom to see how similar both the collectibles and gambling markets can be.
However, even in those extreme cases, no trading card investments truly went to zero, and market participants had plenty of time to cut their losses, recoup some of their investment, and move it into the next opportunity.
The evidence is clear — it’s time to treat trading cards not just as a more preferable investment option for sports fans than gambling, but as a fully legitimate alternative asset.