A “betting exchange” is a website page that lets you make your own markets and bets for other people to bet on. Basically, YOU can be an online bookmaker.
Betting Exchange Overview
When you place a bet with an online bookmaker, for example “Barcelona to win 2-0” you are gambling that the event will happen and when it does you will win money.
But, this means you do NOT think Barcelona will lose or draw. So on a betting exchange site you can bet that Barcelona will NOT draw or lose!
How does this work?
When you bet on Barcelona to win 2-0 you “Back” a bet but if you bet that Barcelona will NOT lose or draw or won 2-1 or win 4-0 etc. then you “Lay” a bet.
This is what bookmakers do, they “Lay” hundreds of bets and pay out on the results that “win”.
So on a standard Win Lose Draw football game bet the bookmaker “Lays” 3 bets, then pays out on the 1 result.
With betting exchanges you can do the same thing!
Betting exchanges and traditional bookmakers comparison
There are two main differences between gambling on an exchange website and on a traditional online gambling website.
The first difference is that it is not the betting exchange website that you are betting with. They are not taking your bets and paying them if they win. Instead, they are “Matching” your bet to another customer’s bet (If you “Back” then you are matched with a customer’s “Lay” bet, or if you “Lay” you are matched with another customer’s “Back” bet) so to make their money.
The gambling exchanges take a very small % of your winnings because they are helping people to gamble with each other rather than operating like a traditional bookmaker. They cannot make any money on the service unless they take a small %.
A traditional bookmaker is taking your bets (called a “Sportsbook”) and paying out if they win. So they make money when you lose (your stake).
A betting exchange doesn’t make money when you lose. The person who “lays” or “backs” the bet wins the money lost.
Betting exchanges only take a % of winning bets – that are either “backed” or “laid”.
The second difference is the “odds” given. Traditional bookmakers usually have similar odds or “fixed” odds for many events and follow strict guidelines for making their odds and they also change the odds depending on how much money people have bet on different results.
Betting exchanges have many different people from all over the betting planet laying and making bets and so the odds can be much higher than traditional bookmakers.
For example – if you take the WIN LOSE DRAW odds for Barcelona vs Real Madrid, the traditional bookmakers will have very close odds e.g. Home 6/5 Draw 11/5 Away 7/4 but on a betting exchange you might see Home @ 3/1 Draw @ 5/1 Away @ 5/1.
This is because some Real Madrid fans cannot accept that Barcelona might beat them and so “Lay” silly odds while some Barcelona fans cannot accept that Real Madrid will beat them and so they will “Lay” silly odds too!
What is the “Back” bet?
This is a bet that you think will happen and so when you place your bet you “back” it to win – so if the bet “wins” they pay you but if it “loses” they keep your stake.
What is the “Lay” bet?
This is a bet that you think will NOT happen so when you “Lay” your bet you are asking people if they want to bet “against” you – that is, place a bet with you (instead of with a traditional bookmaker) – if the bet “wins” then you pay them, if the result “loses” you keep their stake.
For example, it you “Lay” Barcelona to win 2-0 @ 10/1 you are saying - “I don’t think Barcelona will win 2-0 so please bet me and if Barcelona win 2-0 I will give you 10 x your stake, but if it is any other result I will keep your stake.”
How to use it
To place a “Back” bet is the same as betting with an online bookmaker, select the bet and your stake.
To place a “Lay” bet, you select the bet, then choose the odds you want to make for the bet and then the amount of how much a punter bets – this will then show you your “Liability”. Your “Liability” is how much you have to pay if the bet “wins”.
To “Lay” bets you must have enough funds in your account to pay the liability.
When you have selected to “Back” or “Lay” then you must wait to have your bet “matched” with another customer, when it is “matched” your bet is placed.
About Betfair
Betfair is the biggest, most famous and popular betting exchange and is where you will be able to match your bets more quickly and easily.
It is quite easy to set up an account however you will need to provide identification.
They also have a regular online betting sportsbook so you can gamble as you would with a normal online bookmaker if you prefer not to bet against other people.
Final Word
If you are looking to gain greater profits with less risk then betting exchanges like Betfair are better places to bet because you get much better odds than you get with normal online bookmakers.
You can also find very interesting specials that are offered with some very high odds so betting exchanges are great places to bet for fun too.
