What Is Betting Exchange, and How Does It Work?

Betting exchange is one of the most revolutionary concepts in sports betting ever. In the last twenty years, this type of betting has become very popular among the betting population for several reasons. We are pretty sure that although you may have never used Betfair or any other betting exchange, you have undoubtedly heard of the term “trading on betting exchange” and that you may not have been aware of the breadth of that term and the complexity of the betting exchanges themselves.

What separates the concept of betting exchanges from traditional online betting sites is that the betting exchange exists here as an intermediary between bettors, who take bets between themselves. The exchange charges a small commission for its service. The advantages of betting exchanges in relation to traditional bookmakers are many, from higher odds, the better offer of betting markets, to security. At the same time, there are some disadvantages, and we will talk more about these things during this article.

Continue reading our detailed guide if you are ready to enter the magical world of online betting exchanges.

What is Betting Exchange?

With this way of sports betting, you are not betting against the bookmaker but against other players on the platform. Simply put, you choose whether to be a bookmaker (and then offer odds on the event so that others can bet on it), or you bet as standard as in other gambling sites, but in this case, there is no sportsbook, but you bet against other players. Betting Exchange is simply an intermediary between player transactions, so it is sometimes called sports betting exchange.

The main difference between traditional betting sites and Betting Exchange operators is that you are not betting against a huge company with unlimited resources, like Bet365. Still, you are betting against other players who have more or less the same knowledge and skills as you.

How Did It All Start?

At the beginning of this century, the first website appeared that offered the option for bettors to compete with each other with equal chances of winning. That website, called Flutter.com, may have unknowingly revolutionized sports betting.

Shortly afterward, “big investors,” noticed this site and saw the unlimited potential of this project and the very principle of betting between players. Soon the English Betfair platform appeared, which is still the dominant company for Betting Exchange sites. These two sites soon merged into one big one, called Betfair – Betting Exchange.

Over the years, other platforms and betting exchange sites like Betdaq, Matchbook, and Smarkets have appeared, but no one has ever reached the popularity and number of users as Betfair has. Maybe a platform will appear in the future that will overthrow the Betfair betting exchange because this type of betting is the future of sports betting.

How Does Betting Exchange Work?

If you are interested enough and think that you could start betting on one of the betting exchange platforms, read the following paragraphs and see how placing a bet on the betting exchange works.

You can use the betting exchange for classic sports betting, i.e., traditionally place bets and try to make money by betting on sporting events. Still, you can also use the exchange by taking the role of bookmaker and start accepting bets from other players, which is a genuinely revolutionary concept.

What is very specific for betting exchanges is that the odds are not static, but they are constantly moving, both in pre-game markets and in betting exchange in-play markets. Therefore, the market’s volatility is fluent instead of the static that we see in classic online bookmakers. It is this volatility that gives players an excellent opportunity to make money betting on sports!

Since players can take the role of a classic bettor (BACK bet) and a bookmaker (LAY bet), sometimes a significant shift in the odds may occur, and the bettor can make a safe bet on a particular match before it starts or during in-play betting. This discipline of sports betting is called Arbitrage Betting and is very popular among bettors.

Let’s see how placing a safe bet on a betting exchange works:

Imagine that you played a draw in one football game with odds of 3.00 and a stake of €100. This bet brings €200 of net profit if the match ends in a draw and €100 of potential loss if there is any other outcome.

If the result of your selected game at halftime is a draw, the odds on the same outcome will generally be around 2.00. Then there is a perfect opportunity to take the role of bookmaker and offer to other players to accept a bet of €150 on that odds.

Taking both possible outcomes in this way gives the player in any option a net €50 profit (minus commissions), which is without a doubt a safe bet that always brings a profit.

Advantages and Disadvantages of Betting on Betting Exchanges

There are many advantages so that we will list only some of the most obvious:

In general, the odds are always a bit higher on Betting Exchange sites for the simple reason that the other players set the odds, and these players try to be competitive with high odds. Also, there are no sportsbook margins on these pages; there is only a small percentage that the winner pays to the platform for each bet (commission). Betting Exchange is simply a catalyst for bets between players.

It is fascinating to know that you compete against other bettors, so you have a better chance of success. Also, in every match, you can be a player and a bookmaker as many times as you want. That is, you have the opportunity to make safe bets. Therefore, there is no option for a player to be limited or suspended by the platform because the more bets you place, the more the betting exchange makes a profit for itself. Also, players at Betfair can try online casino games as well.

As for the shortcomings of playing in betting exchanges, there are not many of them. The main drawback is the situation that can happen to players, which is that they cannot find the odds they want. That is, no players are offering the needed odds on the platform. In such a situation, players are forced to play on other respectable betting sites, but this situation happens very rarely in large markets.

Another disadvantage of betting exchange sites is that bonuses and promotions are not as attractive to players as at traditional betting sites. Namely, there were absolutely no bonuses and very few promotions until recently, but that has changed lately. However, the bonuses are far in quality from those offered by online sports bookmakers.

The last drawback of betting exchanges is the impossibility of playing combined and system tickets. It is simply impossible to find two identical people willing to play and accept an exact combined bet.

Types of Sports and Betting Markets

On Betting Exchange platforms, you have an offer of all possible sports as well as in regular online and local bookmakers.

Also, in terms of betting types, it is possible to bet on pre-game markets and betting exchange in-play markets, so there are no obstacles for players who prefer to play live matches.

As we said, these Betting Exchange platforms charge a certain percentage for their services. The percentage varies and ranges from 2-5%, which is charged to the winner. This is certainly less than bookmakers that set their margin at 10% and sometimes significantly more. So, there’s no reason why you shouldn’t start betting as much today on Betting Exchange platforms, such as Betfair or Matchbook.

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