A betting exchange is an alternative available to the bettor who does not wish to bet with bookmakers.
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The main difference between exchanges and traditional bookmakers is that, rather than betting against a gambling company, you are betting against another bettor similar to yourself. This bettor will have opposite views to you on the outcome of an event and, therefore, is likely to match your odds (matching becomes more likely the bigger stakes you wage). So, for example, if you think Manchester United will beat Manchester City at odds of, say, 2-1, then you will bet for this outcome to happen. The person against whom you are betting is wagering that an opposite outcome will occur. So, if you make a bet, then you do not stand to lose to the bookmakers, but to a fellow backer instead.
However, this would never benefit a company such as Betfair, because where would its money come from? This is where you have to decide whether it’s worth chancing your arm on the exchanges. Betfair always makes a profit because it takes a small percentage of your profit as a commission – this is simply how a betting exchange works. Naturally, this is a much more sensible way of doing things from the bookmakers’ perspective, because it never stands to lose anything.
One of the unique advantages of the exchange market is that bettors are able to lay, as well as back. This is not a concept practiced by any of the major bookmakers, and Betfair have discovered rather a niche. The idea is a simple one: if you think an outcome is not going to happen, for example if you do not think that Manchester United will beat Manchester City at the given odds, then you can place a lay bet that indicates your desire for United to lose to City.
This is a very popular method among bettors, particularly in live betting, when the odds are more favorable. If you think that a team is going to lose at halftime when it is 1-0 up, the lay odds are better than they would have been at the start of the match. This, of course, is the general rule of thumb for all normal bookmakers when it comes to standard bets, but with the added option to lay rather than back.
The ‘lay’ bet is possibly what Betfair is most famous for. This is the only service that provides you with the opportunity to bet against an outcome. This unorthodox option is a relatively new scheme offered to bettors, and it is popular because, for example, in a competitive race the chances of the favorite horse winning are most likely lessened. Using the same ‘matching’ process as you find when you are ‘backing’ a horse, you can lay a horse to lose and wait to see if your bet comes through.
There are many benefits of using a betting exchange as opposed to traditional online bookmakers. Perhaps the most obvious is the fact that you are given the opportunity to offer your own odds on a horse, soccer team or any other sporting entity, and wait for your odds to be matched.
If your odds are matched, then you probably have better odds than you’d find if you bet with normal online bookmakers since bettors, by nature, want decent odds. In all likelihood, the price will probably also be longer due to the fact that you cut out the ‘middle man’ that gambling companies ultimately represent. Both these factors give you the chance to enhance your odds and allow you to stay with one betting site rather than rooting through different companies’ offers.
Anybody can place odds and hope that someone else will follow them. Because Betfair is a free market, bettors are usually inclined to try and make their odds better, and this is the main difference when compared with other bookmakers such as Ladbrokes and Bet365. The main benefit is that you are paired with a member of the public rather than having to go through a company to get your odds.
If the layout of Betfair seems unusual at first, it is probably because it shows its odds in decimals. Rather than the standard fraction used in high-street bookmakers, Betfair uses decimals because they give a more precise outcome of what you can win.
The exchanges are definitely worth exploring, if only because they offer the ‘lay’ outcome, which can be very useful to a bettor who is against backing favorites. Add to that the user-friendly service, attractive odds and flexible betting options offered by sites such as Betfair , and you can see why the betting exchanges are always an appealing alternative to things such as in-play betting for gamblers.
"An experienced bettor with a decade writing about sports and gambling, Dan's expertise includes college football, college basketball, golf, the NFL and more."
Reviewer since September 2019