Exchange betting is a relatively new addition to the world of online betting, having only been established at the very end of the 20th Century. Betting exchanges are modelled on the finanical markets and add various elements of flexibility to the world of sport betting. In this introduction, we are going to look at the key differences between traditional bookmakers and betting exchanges:
You are not betting against the the exchange
First and foremost, when using a betting exchange you are not betting against the exchange. The whole concept of the exchange is to match up the bets of punters with opposing opinions, so you are actually betting against someone who disagrees with the bet you are making and is willing to pay you if they are wrong.
So how does it make any money?
Commission. The betting exchange takes a percentage of the profit from the punter who wins the bet. The punter who loses does not pay anything further. Typically, this commission is up to 5%, but given you often find better odds on the exchanges anyway, this is not a great issue.
Because all bets on the exchange are made against another customer, all its customers have the ability lay bets, i.e. to be the bookmaker. You can set the odds for an outcome and the amount you are willing to lose. To “lay” a bet is identical to backing it to lose. If you consider a tennis match with just two possible outcomes, betting on one player to win is exactly the same as betting on the other player to lose!
Multiple markets for each event
The betting exchange consists of markets for each event they cover. It is typical for a single football match to have 30 or more markets availabe, covering every aspect of the game. Within each market are the possible outcomes, and the currently available prices.
You can request your own price
If you don’t like the look of the available prices for something, you can ask for better. This is the processs of placing an order into the market, and if someone comes along who wants to oppose it, you get “matched” and the bet is live. Before it is matched you are free to change the requested odds, value or even cancel your bet. This is particularly useful when betting in-play.
Originally this was a unique feature to the betting exchanges. Today the bookmakers are catching up with their in-play offerings, but they are never able to react as fluently as the exchange markets. This is simply because the exchange market is governed by the opinion of hundreds of active users, constantly tweaking and adjusting the available prices by backing and laying. In theory at least, the odds during in-play betting on the exchanges should always be very fair and close to the true odds of the selection occuring.