A sports betting exchange is an online platform that facilitates peer-to-peer betting using modern technology.
Using a sports betting exchange for your betting is rather different from using ordinary bookmakers, and many would say better. There are several advantages of using an exchange and we shall look at those in due course.
Losing bets are at the heart of sports betting exchanges because for every winner there is someone else who loses. This is because on an exchange you are betting against another person rather than against the bookie (bookmaker). This underscores the main difference between a betting exchange and a traditional bookmaker – the fact that on an exchange you can bet against an outcome as well as for it. Betting against a certain outcome is called laying and it opens up a whole new range of betting opportunities which will be explained more fully in due course.
Many people enjoy a bet and as long as you keep it within bounds, using sensible stakes that you can afford to lose without anxiety, then why not? There is something about winning money rather than having to work for it that is very pleasurable! It is absolutely certain though, and you have to realise and accept this fact – You will have losing bets as well as winners. The trick is of course to win more than you lose.
For many years you had to go down to your local bookmaker in town in order to place a bet, say at Ladbrokes, Coral, or Betfred, for example. However the arrival of the internet changed the situation, for then many bookmakers came online allowing punters (bettors) to place bets via their computer from the comfort of their own home. Following on from there the betting exchanges appeared online, offering a different way of doing things that soon became very popular, and we shall see why.
Betfair was one of the first sports betting exchanges, founded in 2000 by Andrew Black and Edward Wray. It was a clever idea involving matching bets between people, rather than people betting against a bookmaker. This is an early example of peer-to-peer interaction which is becoming increasingly popular on the web. It cut out the bookmaker, and offered instead a platform for peer-to-peer betting with the operators taking only a small and fixed commission from winning bets. This encouraged people to bet since they were encouraged to win rather than to lose which of course, is what traditional bookmakers rely on in order to profit.
Betfair has since been joined by other online exchanges including Betdaq, and Matchbook amongst others, but it still holds the number one spot with the highest liquidity due to the largest pool of customers overall. It has over four million customers worldwide, and is generally reckoned to be the most reliable online exchange with the widest range of available markets to bet on.
There are a few reliable alternatives to Betfair but the volume of bets handled by them is much lower; so that high rollers, i.e. those betting large amounts of money, may not be able to get their bets matched there.
Well a betting exchange allows you to back or lay the outcome of a sporting event, whether it be a horse race, football match, cricket match, tennis match, or whatever. This means you can bet for a horse or team to win or you can bet for it not to win. So you can back a horse or team or you can lay it. There can be advantages to laying rather than backing. For example in a horse race of twelve runners you may not know which horse will win but you might choose to simply lay a horse that simply has little chance of winning. You might judge this from its form in previous races (information you can get from Racing Post), or you can simply see its chances reflected by the odds on offer before the race. A horse which has odds of 100 or more to lay is obviously judged by the majority of punters to have little chance of coming first.
On an exchange, odds are not determined by just one or two people, but by the collective opinion of very many bettors, and by the amount of money put on or against each selection. Thus the odds are generally reckoned to probably be the most accurate.
When you place a bet on an exchange you are predicting an outcome of a specific event in the future. An exchange attempts to match someone who thinks a certain outcome will occur with someone else who thinks it will not. So we have four elements of a bet – the staked amount, the odds in decimal form, the return if the back bet wins (stake plus profit), and the liability which is the amount the losing bet loses.
Of course the downside of laying is that, at high odds you might need to spend £/$/€100 or more to make just £/$/€1 profit, for example, and, should you lose then your loss is considerable. There are those who do this though because horses at high odds rarely win… Although they do sometimes win.
You generally find that the odds to lay a selection are higher than those to back and it is important to realise that a lay bet carries a higher liability. If you back a selection and it loses then you have lost your stake, but, if you lay that selection and it wins then your liability is considerably more. It works like this. On an exchange your liability equals Backers stake x (Lay odds – 1).
If, for example you were to lay a red hot favourite in a football match at odds of 1.32 for £/$/€10 then your potential loss would be £/$/€10 x (1.32 - 1) = 0.32 x 10 = £/$/€3.32 whilst a £/$/€10 lay at odds of 5.00 gives you a much greater liability of £/$/€40!
This is why professional lay bettors prefer to lay favourites often in a horse race since the odds are low.
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There are several advantages and few disadvantages to using a sports exchange rather than a bookmaker for your betting. Here are some advantages:
A betting exchange generally provides more choice for punters. This is because on an exchange you are betting against others and you can ask for more favourable odds, which means another member on the exchange taking on more risk. A bookie puts up their odds and you can take them or leave them. They may change their odds somewhat during the day but at any given time the offered odds are fixed for you to accept or not.
A betting exchange generally gives better value than a traditional bookie. The usual high street or online bookie makes its profits by skimming a small amount off each bet transaction, by offering odds which are slightly less than reflected by the real likelihood of each outcome. Thus the bookie constructs what is called an over round meaning that the percentage equivalent of all the odds offered on a bet amount to slightly more than 100%, and then the difference is their profit.
An exchange company makes its profits in a different way. It takes a commission payment from all winning bets, and this is currently 5% for most people. The more bets you place, the less commission you may pay, as they give a discount depending on the volume of bets placed.
Basically then, a sports exchange simply provides a platform for bettors to match bets against each other, taking a small commission on winning bets for its trouble.
An exchange is more flexible by allowing people to trade bets. For example if you were to back a horse early in the day at odds of 5.0 and then just before the race begins you notice that the odds have reduced to 4.5, then you can lay back that bet, or cash out, making a guaranteed, albeit small profit. There are many ways to trade, with football, tennis, and horse racing being most popular. There are many who favour trading over outright betting as being safer, since you do not have to actually get right the actual winner but simply know which way the odds are likely to move and then either back first and then lay, or, lay first and then back. The rule is to lay low and back high in order to make a profit with changing odds.
Betfair trading is a whole subject in itself. A simple example is as follows: In a football match, once the favourite team scores the first goal then the odds for it to win will plummet, since most expect the team to go on to win. So if you were to back the favourite before the match then once your team had scored that first goal you would be able to lay it back at lower odds and make a small profit. Should however, the other team then score a goal quite soon after then you will see the odds for the favourite go back up a certain amount because now it becomes less certain. The moving odds tend to reflect the majority view of the likely outcome although often the market will over react, and experienced traders will take advantage of this.
As well as being able to lock in a profit when you have an ongoing bet that looks pretty certain to win by cashing out, and even auto cash out facility whereby it will automatically trigger the correct bets to ensure your profit based on preset parameters once you are in a winning position whilst in play. Thus you would not necessarily have to sit through an entire football or tennis match in order to execute the required back and lay bets.
Being able to lay a bet is extremely useful for people who use a matched betting technique. With matched betting you take advantage of traditional bookmakers by using their special or promotional offers. Because competition between bookies is high they quite often give out a free bet, especially for new customers, and this can be made to turn a profit whatever the outcome of a sporting event by simply cancelling out the risk of a back bet by laying it off. Even bookmakers themselves apparently lay off some of their bets to reduce their liability sometimes, and the exchanges are where they do it.
The exchanges allow people who have been limited or banned by traditional bookies, perhaps for winning too much, to still be able to bet. The ordinary bookmakers do not like people to win too much money from them since obviously it eats into their profits. They keep a fairly close eye on their customers these days by means of various online software such as tracking and spying, and they are apt to limit anyone with regard to the size of their bets, or even ban them without warning if they think a person is a savvy bettor and likely to cost them a lot of money. Some bookies like Stan James, are very hot in this respect, while others such as Asian bookies are much more relaxed. A successful bettor therefore is likely to eventually have his bookie account closed, (known as being “gubbed”) but he or she can still turn to the exchanges to bet since they encourage rather than penalize winners.
Sports betting exchanges generally do not offer a wealth of promotional or special offers. They imply that their better odds more than make up for this. Betfair, however, has an incorporated bookmaker called its Sportsbook and this does occasionally produce some worthwhile offers.
You cannot always get your bet matched on an exchange, if there is low liquidity on an obscure event for example, or if you are wanting to use high stakes. For most ordinary folk, however, this is rarely an issue.
You cannot place accumulator bets on an exchange, but there again Betfair has a Sportsbook that allows you to do this although the odds might be slightly less attractive.
You are backing when you place a bet believing that something will happen, such as say Chelsea will win their next match against Huddersfield. If they then do it means your bet is successful and you make a profit, the amount depending on the odds taken.
You need to find the page for your chosen event and you will see two main columns showing the best odds available. On the left, in blue, are the odds to back, and on the right, in pink, are odds available to lay. Beneath the odds values are numbers which represent the amount of money available at the present moment at those odds. Coming up towards the start of an event you will see the numbers change as more money comes into the market from backers and layers.
So to place a back bet you simply click the blue box with best odds and enter your stake amount. Then click the button to actually place the bet. Note that Betfair has a minimum stake of £/$/€2, although there are ways to get around this and play with smaller stakes.
Laying is the opposite of backing and here you are betting that something will not happen and you make a profit provided you are correct.
However, when laying, the amount of money you enter is not the amount you are risking; it is instead the back stake that you would accept at those odds. The backing stake multiplied by the odds is the actual amount of money you are actually risking. This known as your liability. The exchange holds sufficient of your funds aside to cover your liability until the result is known. Interestingly however, if you are laying for example on a horse race, you can lay more than one selection and get away with less liability than you might have expected. This is because the exchange knows that only one horse can actually win.
So if you want to lay a selection then you choose your event and look at the pink boxes on the right side. Here you click on your selection at best odds to lay, i.e. the lowest on offer, or you can ask for lower odds by putting in your preferred value and wait for it to be matched.
An exchange tries to match up people with others who take an opposing view of an event outcome. If you want to review a bet then you click on “my bets” and then see the amount that has been matched or still remains unmatched. You can then cancel any unmatched amount or adjust the odds in order to get matched. Note though that in resubmitting a bet it is then put to the back of the queue and so may take time to get matched, if at all.
Another useful feature is the community forum which has news and information about a whole range of sports, plus access to other members opinions and advice. You need to choose a forum chat name and then you can get into the conversation with others, some of whom may be experienced users with useful tips to offer.
In addition to sports operators have also a section dedicated to the financial markets and includes the main stock exchanges like New York and London. Thus you can place bets on the financial indices or stock prices, or even property prices.
Another area of betting that has become popular is politics, and if you have a strong view about who will win an American presidential election then you might be able to profit from it. These kind of bets are likely of course to be longer running than betting on a football match taking place later today.
There is a comprehensive menu on most exchanges that is easy to understand. Some may also have quick links to go from one place to another on their website. It is simply a matter of becoming familiar with the set- up
Before placing a bet it is as well to carefully read through the rules. In horse racing, for example, you might want to check how many places are covered if you intend to bet each way or even just for a place, which you can do on an exchange unlike with most bookies. There can be some confusion also when a horse is withdrawn from a race. How many places will still count? Betfair does not usually reduce odds in these circumstances although some bookmakers will by invoking a special clause in their terms and conditions. You find on Betfair the rules for each market are posted on the right hand side.
An exchange has some markets not found on many ordinary bookmakers, and a useful type is the place market. You can bet that a horse will come at least in the first two or three, say, at the finish of a race and many people find this an easier judgement than trying to pick the outright winner. Sometimes you can get up to four places paid in a horse race, whilst if there are only six runners or less at the start then it might be only two. When there are three places paid then the odds are often about one quarter or one fifth of the win odds. You can often back just for a place on other sports too, such as in Formula 1 motor racing, or top scorers in a golf match. So place betting is favoured by many since it offers less risk albeit with the disadvantage of much lower odds.
Another feature of betting is the handicap where the underdog is given a pre-arranged advantage in order to more equally spread the risk. In a tennis match, for example, a player up against a top seed like Federer might in the betting market be given a three game advantage so as to even out the odds somewhat and make a bet on the underdog more appealing. In horse racing you may have a handicap already applied to horse by means of making it carry more weight, so a different way of trying to make odds more attractive. In football you can find the so-called Asian market where a handicap is applied to a favourite sometimes with the idea of eliminating the draw from the equation. Your bet will then win or lose depending on the number of goals scored and the handicap you accepted.
So you should now have a good working knowledge of how sports betting exchanges work and if you are going to get involved you might want to heed the advice of professionals who say you should paper trade first. This means you do not actually place any bets for a short while but instead write down what you would have bet on and then see how you would have fared. This is a good way to test various different markets and decide what sort of strategies are most likely to make a profit for you. Once you have sufficient experience with this you can then proceed to actually bet with money, but even then it is advisable to start small and only increase your bets when you find a winning formula. Good Luck!
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The number one Betting Exchange. 5% fees on winning trades. The highest liquidity. | Visit | ||
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Access to Betfair liquidity with a 3% fees on winning trades. Not all markets. | Visit |
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