Larkspur Business x Jimmy Daytona: The Ins and Outs of Betting Business

Online sportsbooks have long been a part of Canada’s gambling culture. Before online gambling, some land-based bookies used to take bets over the phone. Have you ever stopped to wonder how the entire betting business works? Where do the odds come from? How do bookmakers make money regardless of how an event plays out?

You’re in luck because that’s precisely what we plan to discover today. To help us understand, we’ve invited a betting expert from BetZillion CA, Mr. Jimmy Daytona, to LarkspurBusiness.ca.

Larkspur Business Asks Jimmy Daytona Is Sports Betting Legal in Canada?

Betting Business, photo by Scott Graham, unsplash.com

According to recent reports, the sports betting industry in Canada has the potential to grow to $2.4 billion in 2023! Do you think it would’ve been possible if the activity had been illegal?

Sports betting has been in Canada since the 1980s. The first-ever land-based gambling establishment in the country was a sportsbook, not a casino! Online gambling, however, has been largely unregulated.

But the Canadian Criminal law didn’t stop potential gamblers from participating in betting. Any offshore license is valid as long as you’re of legal age. As of 2021 and the C-218 bill, provincial governments now have the power to regulate online gambling and impose taxes on the winnings.

So, there’s no doubt that online gambling, sports betting to be precise, is entirely legal in the country.

Sports Betting: How Are the Odds Calculated?

You already know the odds if you’ve been betting for a while. Even if you’re new, you should know that odds project the likelihood of an event and the potential winning from the bet.

In Canada, the American format is the most popular, where the winnings are calculated based on a $100 wager. The underdog and the favorites are distinguished by the “+” and “-” on the odds. But that’s all common knowledge. Let’s get to the part that’s not common knowledge.

You must understand here that the odds are not supposed to be accurate. The goal of the odds is to balance the action between the bettors. You can’t blindly trust a pair's odds and expect the sports event to play out accordingly. If the odds were accurate, everyone would bet on the favorite. While it still leaves room for the bookie to make money from commissions, it’s not nearly as lucrative as the lost bets from bettors.

When the odds bring perfect volume on both sides, that’s the ideal scenario for the bookmakers. If the odds are balanced, they can expect to make anywhere between 5% to 10% of the total pot. Back in the day, everything was manual. It’s no shock that you can barely find any data on the factors the manual oddsmakers used. The bookie community had its system to derive odds. It was a big hush-hush for the outside world.

Power Ratings/Rankings

One thing known about the odds-making process is the power ratings. Again, how these ratings were derived is still a mystery. But it’s believed that the bookies used to share the same ratings across the board to keep things consistent. This rating was a unique system for the oddsmakers to keep track of teams, performances, team changes, schedule, weather, and everything else that matters in the paradigm.

After the first draft of the power rankings went live, the bookmakers started factoring in more recent data like injury news, recent match results, player transfers, etc. And another thing they used to call “horse sense.” When we say across the board, we mean in a particular area. Take Las Vegas, for example. Vegas has been the hub of bookmakers for a very long time.

Modern-Day Oddsmaking

In the modern day, however, the odds primarily depend on technological advancement. The “gut feeling” or the horse sense has its place in the industry, but algorithms now control everything. Mathematicians and statisticians have considerable roles to play in modern-day oddsmaking. A lot of computing power balances the odds for the favorite and the underdog.

The power ratings, however, are still relevant. Understanding market sentiment, risk management, and reaction to specific lines are the most prominent in determining odds. And computers are mainly used to analyze and scale this data beyond anything humans can do. The modern-day oddsmakers are known as odds compilers.

Another interesting aspect of how bookmakers make money is by saving money. Instead of taking the chore upon themselves, bookmakers often outsource oddsmaking to 3rd party companies. These companies specialize in data processing that helps bookmakers get accurate odds at a fraction of the cost of investing in the equipment.

But it doesn’t mean the odds don’t go through quality checks before going live on the sportsbook. Bookmakers post the odds only when the horse's feelings and the data align with each other. Another way bookmakers make money is by copying the competition. It indeed doesn’t sound like the most ethical approach to most. But it’s undoubtedly something that happens more than you’d think.

Tips from Jimmy Daytona to Find the Best Bookmaker

As we’re nearing the end of our post, we asked Mr. Jimmy Daytona to share some tips with our readers. Follow them and land on the most reliable online betting sites.

• Always look for independent reviews, like the ones on the BetZillion website.
• Always bet at licensed online bookmakers. The license is the first line of defense.
• Look for online payment methods that you can use before signing up.
• Compare the odds at multiple betting sites before choosing one.
• Read real user reviews about the betting site on online forums.