Sure, every startup is a gamble, but let’s just say that Moosa Baquie and his team at the Waterloo startup SmartLines know a bit more than most about weighing the odds and making safe bets. After all, they’re in the business of disrupting the online wagering space.
SmartLines is an online portal that aggregates the betting lines offered by major online sports books. Its algorithm locates opportunity – sifting and finding the wagers that offer the biggest payout with the lowest risk. It tracks the ever-changing odds offered by sports books in real time, generating updates every five minutes for its users.
What it aims to do is help its users make money.
“What we’re able to do is identify the edge,” says Baquie, SmartLines CTO and co-founder. “We know when the edge is really high, so then we advise our users to put more money on that specific bet. When the edge is low, it’s not that worthwhile in terms of the risk and the money you’re getting back, [and] we tend to suggest lower amounts for those bets.”
Online wagering falls into a legal grey world in Canada, with laws and public acceptance in a considerable state of flux. The Criminal Code says that bets placed on a single sports event are illegal, but the federal government also allows the provinces to run lotteries; the provinces get around the federal prohibition on sports betting by running games like Ontario’s ProLine, which mandates a minimum of three-team parlays. The upshot? Making bets on three sports events at a time is legal. Making a bet on one, not so much.
Meanwhile, placing bets by phone or online in the U.S. or elsewhere without any restriction whatsoever is just a click or a phone call away. In fact, the Canadian Gaming Association estimates that $4 billion worth of bets are placed by Canadians outside of Canada every year.
The Ontario government recently petitioned the federal government for a Criminal Code amendment that would legalize single-event sports betting, so the province’s casinos don’t lose their competitive position with those in the U.S.
And Premier Doug Ford himself recently tweeted, “The NHL, NBA, CFL and MLS all agree – let’s regulate single sports betting in a responsible manner to give consumers a legal alternative to illegal or offshore sportsbooks and U.S.-based casinos.”
The state of flux is no small part of what brought Baquie and his two co-founders, Andrew Cameron and Tyler MacNeil, to the space. Much like their own algorithm, they took note of the shifting sands, weighed the potential payoff against the risk environment and decided an attractive play was at hand.
“I saw this as the next big space in terms of disrupting,” Baquie says, comparing wagering to the emerging acceptance of marijuana and cryptocurrency.
“Just last year the [U.S.] Supreme Court overruled the previous ban on sports betting in America. States are now starting to legalize it. Attitudes toward sports betting are shifting.”
SmartLines got its start last year at The Next 36, the Y Combinator-like incubator based in Toronto. Cameron, a University of Waterloo student doing graduate work in quantum optics and information, gained acceptance to the 2018 Next 36 cohort on the strength of the SmartLines idea; he needed a technical co-founder with startup experience and turned to Baquie, a fifth-year student at Wilfrid Laurier University in math and computer science.
MacNeil is a childhood friend of Cameron’s from their days growing up in P.E.I., and who used to be a data scientist at the Atlantic Lottery Commission.
“Tyler was an avid sports better,” says Baquie. “He has all these spreadsheets. He’s made thousands and thousands of dollars off sports betting. He said, ‘I compare odds manually every day. It’s very hard. I go home, my friends do it as well. It’s a very tedious task. Maybe we can automate it, create a tool that would help people out.’
“That’s where the idea was essentially born.”
SmartLines raised $42,000 through Next Canada, which administers The Next 36, and that money in turn made the company eligible for a grant, bringing pre-seed funding so far to $70,000. Earlier this month the company earned another $5,000 at a Laurier-sponsored pitch competition.
Communitech photo: Sara Jalali
The plan, Baquie says, is to shortly roll out an online betting simulator to use in conjunction with the company’s website, which flags high-value bets currently available, and thereby educate users and make them comfortable placing bets without risking real money. Once enough users are comfortable, the hope is they’ll place real bets at the sports books who are offering odds flagged as optimal by the SmartLines site.
The traffic that SmartLines pushes to betting sites is the key, the co-founders hope, to eventual monetization.
“Once we can show that we’re redirecting, say, 10,000 people a month to your [betting] platform, then we realistically open up negotiations with [that platform].
“We want to open up partnerships, so that whenever [we] redirect people to these sites, we would charge a one- to two-per-cent fee on their bet and take that as our revenue approach.”
Baquie stresses that their algorithm doesn’t guarantee winnings. All it does is flag the bets that are more heavily weighted in a bettor’s favour than others, based on odds offered by bookies.
“It’s very clearly stated that what we suggest are not guaranteed outcomes, but merely suggestions from our algorithm working to identify edges. That does not always translate into you actually winning your bet.”
That said, Baquie recalls that Tyler used the algorithm manually for six months, expecting a return of five to 10 per cent.
“The actual amount [of return] was 500 per cent.”
Baquie is well aware that the biggest hurdle facing the startup is not only the still-formidable stigma associated with gambling, but that his startup may well be accused of leading users toward an activity associated with addiction. It’s a concern he faces head-on.
“Our goal for SmartLines is to bring sports betting into the mainstream. We plan to do this by educating users. We want them to be placing smart bets. We want to educate them to the risks about gambling.”
He says his dev team is exploring building in safety features directly into their platform. If a user begins to lose a sizeable amount of money over a short period of time, a flag will emerge suggesting they reduce the size of their wager, change their approach, and/or step back from playing altogether.
“Safety and education is a top priority here,” Baquie says. “We don’t want you coming here and blowing big amounts of money.
“Our methodology at SmartLines is you should be placing small bets over a consistent period of time.”
Baquie’s concern is based on personal experience. Last summer, while playing blackjack at the Niagara and Brantford casinos, he got a first-hand taste of the outcomes that unfold when wagering goes wrong, losing $2,000 in a single night. He eventually recouped his losses, but the experience left an impression.
“This past summer I got into card-counting at the casinos. I found moderate success doing it and also found huge losses doing it. That struck home with me the problems someone might go through.
“I’ve lost thousands of dollars in a single night. I know what that feels like. I don’t want people to feel like that using our platform. I do not want to be creating more problem gamblers through our system. I want to create educated and smart gamblers through our system.
“If you do have a problem or issue, we want to make sure that the resources are there on our site and that SmartLines does everything it can to help you through that period of your life.
“Because losing money makes your stomach turn. You feel like the worst person ever.”
Baquie and his 11-member team, all of whom are part-timers, moved into the Communitech Data Hub just last month. They're part of the Laurier Launchpad Incubator, which is also housed at the Data Hub (and in Brantford); Launchpad provides support, mentorship and resources to startups affiliated with the Laurier community.
The co-founders are now in the process of seeking seed funding; Baquie recently pitched in front of investors in Toronto and says the company has 11 months of runway based on existing reserves. The key is to their future, and their fundraising goal, is getting users to jump aboard and use their platform.
In short, they’re going all-in, in the firm belief they’ve got a winning bet.
