Sydney sports betting fund director faces sentence after defrauding investors of AU$1.2 million

A Sydney man who said he had developed an algorithm to beat the bookmakers could avoid a prison sentence for defrauding investors in his sports betting fund, according to a report from the Australian Associated Press (AAP), relayed by trade publication Casino.org.

Michael Pryde, 32, was the sole director of Simply the Bets Pty Ltd, which is now bankrupt. The company used the algorithm to bet on baseball, basketball, golf and horse racing. According to his bankruptcy trustee, Pryde persuaded more than 100 investors, many of them friends and family members, to put in AU$5.5 million (US$3.6 million) to fund the scheme.

The charges

Pryde pleaded guilty in March to dishonestly obtaining financial advantage by deception and to using a false document to obtain financial advantage. He also admitted defrauding 18 Simply the Bets investors of AU$1.2 million (US$790,000).

The report says that between August 2018 and January 2023 Pryde returned AU$2.4 million to participants. He earned around AU$320,000 under an agreed 20 per cent cut. The source does not say how much investors lost overall, and it does not detail how the other investors, beyond the 18 named in the admission, were affected.

What the defence told the court

Pryde's lawyer, John Sutton, told the Sydney court on Tuesday that his client never intended to defraud anyone. He said the scheme got off to a good start. According to Sutton's account, the fraud began when Pryde started accepting money from new investors while things were going badly. He then abandoned the system and began chasing his losses in an effort to dig himself out of a hole.

"Quickly, he was losing money because he was gambling outside the model in an impatient, imprudent way, a reckless way... Inevitably, the house won or, put in another way, the scheme lost." – John Sutton, defence lawyer, as reported by AAP

The report says Pryde then compiled a fraudulent document to try to delay bankruptcy, hoping to win the money back by gambling more recklessly. That strategy failed. Sutton described the move as "so naive as to be embarrassing" and said his client was "no Melissa Caddick".

Caddick was a bogus financial adviser who, shortly before her disappearance in 2020, defrauded friends and family of around AU$30 million in a Ponzi scheme, according to the source. She spent on houses, luxury cars, designer clothing, jewellery and expensive art. By contrast, Sutton said Pryde lived relatively frugally and did not use investors' money for personal expenses. He also said Pryde is remorseful and is seeking help for gambling addiction. These are the defence's assertions, put to the court in a bid for leniency. They are not findings by the judge.

What happens next

Sutton asked the judge for an intensive corrections order, which would be served in the community, instead of a full prison sentence. Pryde was scheduled to be sentenced on Thursday. The outcome was not known when the source article was published, and the source does not name the judge or the court.

The claim that the algorithm gave Pryde an edge over bookmakers comes from Pryde's own description of the scheme, as reported. The source offers no independent evidence of how it performed. Readers should treat any promise of a guaranteed betting edge with caution, and anyone affected by gambling harm can contact Gambling Help Online on 1800 858 858.