A betting exchange matches people together who want to place and take bets. When you place a bet its known as backing and this is essentially what we do at the bookmakers, we back an event to happen.
So as an example
If I was betting on Derby to win, the odds are 5.5. If I bet £10, I expect to make £45 profit if Derby win. If I wasn’t confident Derby could win I would actually lay them at the exchange, which means I could take someone else´s bet.
If I place a £10 lay bet at odds of 5.7. That means if Derby don’t win, I take the £10 stake. But if Derby do win, I pay out £47. So I’m being a bookmaker essentially and paying out winnings and keeping a stake if the bet doesn´t win.
This is a really important aspect of matched betting because it allows us to mirror the bet that we have made with the bookmaker covering every eventuality. So if your bet wins at the bookmakers it loses at the exchange but if you win at the exchange you lose at the bookmakers. Now ordinarily this would mean you would make no money at all if you just backed at the bookmakers and layed at the exchange but because we are bringing bonus money into the equation it tips the balance hugley in our favour and means we can make big profits on those bonuses every single time without any risk to our own money.