What Is a Betting Exchange?
At first glance a betting exchange may look exactly like a bookmaker with a selection of sports and the ability to place a bet on the outcome you choose. The main difference is that with an exchange, you’re betting against other bettors and not the bookmaker itself.
This means that you can seek out the odds that you want to play for rather than being limited to the odds that the bookie is willing to offer. A traditional bookmaker accepts all bets placed instantly and makes money by laying the bets elsewhere. They have the liability and if there’s a big result in favour of the punters, a bookmaker will take a large financial hit.
At a betting exchange the setup couldn’t be any more different as the liability all lies with other bettors. The exchange charges commission for facilitating the bets but is not an active party in each bet that’s placed. Instead, you’ll be playing against other bettors who accept your bet and choose to match it. You’ll be able to enter all the usual markets such as horse racing and football, placing bets to win as well as more specific bets including BTTS and First Goalscorer.
Unlike at a bookmaker, with an exchange you must wait for your bet to be matched and accepted. There is a chance that no-one will accept your bet if the odds aren’t attractive. For the bet to go ahead another bettor must be willing to take up the opposite position at the odds you’re requesting.
The Benefits of Using a Betting Exchange
The whole reason that betting exchanges are possible is that, unlike a traditional bookmaker, they allow lay bets. This means that at a betting exchange you can place a bet for your nominated selection to lose. For all intents and purposes, this is the position the bookie would normally assume but an exchange allows you to adopt this role yourself.
Being able to lay bets means exchanges are perfectly suited to matched betting, enabling bettors to take hedge a bet to reduce the risk.
Aside from being to place a lay bet, there are many other benefits to a betting exchange. There is much more diversity and choice in an exchange, allowing you to seek out the odds you want in a particular market.
A traditional bookie skims a portion off the odds they offer which is how they make their money. This means that the true odds are slightly better than what you’ll see and you should be able to achieve this at an exchange. Remember, all that’s necessary is for someone to be willing to accept the opposite position and you’re in business!
WIth hundreds of thousands of bettors participating on the exchange, there’s a pressure to make sure you’re getting fair odds. Unlike a bookmaker where the gameplay is dictated by a single person or entity, at an exchange there’s the weight a mass market behind the odds offered and accepted.
Even if you’ve never experienced it yourself, everyone has hard stories about bookmakers refusing bets, closing accounts or limiting how bettors can play. None of this happens on an exchange because the outcome is irrelevant for the business running the platform. A betting exchange is simply an intermediary for the bet, taking a small commission in return for providing the facility.
Revolutionising the Industry
First introduced around the year 2000, betting exchanges have completely changed the industry.
Before their arrival, traditional bookmakers had a real stranglehold on play and were able to dictate the terms on which bettors could participate. The introduction of exchanges provided a flexibility which wasn’t present before, including the new possibility of laying bets.
Most bettors today are very familiar with the concepts of cashing out and in-play betting but these were only introduced by exchanges. When traditional bookmakers were in charge, all bets were halted as soon as the event started with no possibility of laying or altering the bet to take into account game developments. Betting exchanges altered the market forever by allowing bets to be closed early or changed via in-play betting and cashing out.
These two options allow punters to either minimise their losses or accept a guaranteed profit. Customer can now even set up automated cashing out so when their bet hits a limit, it’s automatically closed.
The Drawbacks of a Betting Exchange
It’s clear that betting exchanges allow a far greater depth in the market and provide options which aren’t available elsewhere but are there any negatives to what’s on offer?
The short answer is potentially yes.
If you’re considering laying a bet, you need to understand how the odds work. Unlike a fixed odds bet, losses aren’t capped at outset so you could end up shelling out a large sum. For example, a £10 stake with odds of 10/1; if you lose you’ll be stung for a total of £100 - ouch!
There still aren’t many betting exchanges yet which means there aren’t a lot of customers. In one way this is helpful as it means the liquidity in the market is concentrated and not spread around multiple providers.
However, on the flip side it means that betting exchanges charge a fairly steep commission. Betfair is one of the biggest exchanges and charges 5%, a rate which can rapidly eat into winnings especially if margins are small. If you compare betting exchanges you should be able to find some that offer a lower commission rate. Smarkets is one of the best betting exchanges, offering commission of just 2%. However, with a smaller client base, it’s a tradeoff, so you’ll need to decide which is the most important: betting exchange commission or greater liquidity.
If accumulators are your thing, then you’ll need a traditional bookmaker. Due to the complexities in how the change works, it’s not possible to place an acca. Companies like Betfair offer a traditional bookies service alongside their exchange so you can switch between the two depending on what type of bet you’re placing.
Find the Best Betting Exchange Sign-Up Offers at Yesbets
Although they’re different in many ways, betting exchanges offer real potential for bettors looking to explore the market to its fullest. Yesbets carries details of all the top betting exchange promotions so you can compare them to what’s available from traditional bookmakers to get the most value from your bet. With sign-up offers and free bets, there are plenty of deals available so keep checking back at Yesbets to find the hottest promotions around.