What are Betting Exchanges, how to use them & how they differ from Traditional Bookmakers
Betting exchanges are a relatively new addition to the world of online gambling, exchanges allow you to get better odds on your bets and let you be the bookmaker.
What are betting exchanges
A betting exchange allows gamblers to bet against each other rather than a bookmaker. Customers can offer odds to, or request odds from fellow bettors.
This allows customers to either back or lay bets depending on what they think will win. Backing a bet is rather self-explanatory as it is the same principle of placing a bet to win at any other bookies except that the people who are paying your winnings are other punters rather than the betting firm.
You can also act as the bookie yourself by placing a lay bet which is backing a selection to lose.
How are exchanges different to other bookies?
Exchanges differ from other bookies because you are betting against other punters rather than the bookmaker’s odds.
Value for bettors will generally be better on an exchange. Bookmakers offer slightly worse odds than the Implied Probability in order to guarantee themselves a profit whereas in the exchange you are betting against other punters who will offer greater odds in an attempt to make sure their lay bet is matched.
On an exchange, the market isn’t priced up by one person but other punters who calculate the odds themselves, if someone wanted to lay a selection at much greater odds than the probability then you could take advantage of this by backing the selection at these inflated prices.
How to use betting exchanges
On the betting exchanges odds are generally better than at a regular betting firm.
In the FA Cup game between Chelsea and Manchester United odds of 11/10 are offered on the exchanges for a home win whereas at a regular bookmaker it is priced up at evens which is slightly worse than what is offered on the exchange.
You can also place a lay bet which allows you to act as the bookmaker yourself.
A lay bet is backing a bet to lose, but you act as the bookie taking bets on the selection.
For example, in the Chelsea vs Manchester United game in the FA Cup if you wanted to lay Manchester United for £10 and they won you would have a liability of £31 meaning that if United won you would have to pay out £41 to the person who backed the bet as if you were the bookie taking a bet at 4.1 odds.
If the selection you lay does lose then you will earn back double your stake if it is matched by someone backing the bet at those odds.
The beauty of betting exchanges is that you can select your own odds. You could offer odds of 3.9 rather than 4.1 in your lay bet meaning that your liability would be lower, but this runs the risk of not being matched as the odds offered are worse than those offered by other layers or even other bookmakers.
Matched betting is another popular way to use the exchanges to guarantee yourself a profit and there is a Guide to Matched Betting if you want to find out more about how that works.