lol, I think the mob tried this back in the 1920s. It's one of the most obviously illegal things you can do, and would get your fund shut down in a heartbeat the minute it's exposed.
As to the rest of your post, I'll put it like this: If you invest in stocks, the odds are structurally stacked in your favor. (This wasn't always the case, but has been the case for a while, and there's no indication that it's going to change any time soon.) If you wager money on sports, the odds are always against you. Why would a hedge fund (think about this for a second) throw money away on such wagers?
I can imagine a hedge fund that takes bets and separates fools from their money, but most or all of them have anti-vice policies and would never countenance such a thing.
To notice that Lebron is depressed because he had to put down his dog and bet that his depression will influence his performance on the court is illegal?
> Odds are structurally stacked in your favor. (This wasn't always the case, but has been the case for a while, and there's no indication that it's going to change any time soon.
This is just an assumption based on nothing, on the other hand it's true from first principles that you need people to agree with you to make money in stocks whereas in sports bets you not only don't need those but actually hope that people are taking the other side of the bet
> If you wager money on sports, the odds are always against you.
The house edge can be compared with other costs that hedge fund incour when they trade stocks, also they are not present on prediction markets and are very slim on betting exchanges such as Betfair