A betting exchange, as the same suggests, is a marketplace where bets are exchanged. The unique characteristic of a betting exchange is that individuals will exchange bets with one another. There is no bookie. In a betting exchange, you have the option of buying (referred to as “back”) and/or selling (referred to as “lay”) a certain outcome. Furthermore, these exchanges can occur during an event as it progresses. Below, you’ll find a detailed overview of the betting exchange in UK and the best betting exchanges around.
Back and Lay: The former refers to the act of betting on something or someone to win. If you back a team, you’re betting that they will win. You’ll have come across this if you’ve ever betted with a sportsbook. If you decide to ‘lay’, it means you want to take on the stake that someone has else has wagered by backing, and you’re hoping the selection or bet will lose. If you ‘lay’, you become the bookie in essence.
Place betting: If you enjoy betting on horses, this is a great term to know and utilise. Place betting means you’ll bet on a particular individual (usually a horse), to finish within a certain range. For instance, you’ll bet that your chosen horse will finish in the top 3. If it finishes anywhere within the top 3, you’ll win your bet.
In-play betting: This kind of bet will allow you to bet after an event has begun.
Once you’re familiar with these terms, you should feel more comfortable.
Let's take a closer look. The major difference between a betting exchange and your average bookmaker, is that a betting exchange allows for punters to bet against fellow punters. So, you can request or offer odds to your fellow bettors. Where the bookmaker would usually take on the risk for going head to head with the punter on a wager, a betting exchange sees no risk whatsoever. Want to know more? Let's dive into the details.
The betting exchange essentially matches two bettors against each other, one as the backer and the other the layer. The layer has agreed to pay-out the backer’s wager should the bet be successful. As such, the betting exchange is acting as a middleman for the two bettors, taking a small commission of completed wagers. So in the case of the backer winning, he/she would receive the stake from the layer, and vice versa.
The major point that separates exchanges from bookmakers is the option to wager a lay bet. Furthermore, where a bookie would offer you the odds, you wager your bet with odds that you would like and then wait and see if a fellow punter wants to take you on with those terms. You can also choose to accept another punter’s wager. The stake and odds on a proposed wager can be negotiated by the other bettor until the two parties agree on the terms. There is no limit to the odds and stakes that can be proposed; however, they do still need to be attractive enough to garner the attention of your fellow bettors.
There are certain things to look out for when using a betting exchange, some good, some bad. We've identified the pros and cons so you can decide whether a betting exchange is something that interests you
The greatest advantage of a betting exchange is the fact that you can utilise the lay betting strategy. Your standard bookmakers will not offer you the opportunity to wager a lay bet on any event, whereas a betting exchange does. This gives you more avenues to try to make money.
For example, should you bet on three different horses to win a race, and one of your wagers is successful, you will have still lost two wagers and probably have just made your money back depending on the odds. Should you use the same strategy but as a lay bet, and you choose three horses that lose the race, you stand to make a lot more money. Even if one of the horses does win the race you will have won two other bets. As you can see, there is a significant advantage to lay betting.
Also, as stated above, you’ll receive better odds than those advertised elsewhere. If you decide to enter the betting exchange world, you'll see that there are no added profit margins – usually the case when dealing with a bookie. This means that the odds and possible value derived from these bets are bound to be higher. If you’re interested in reading up on odds, you should find our guide to how betting odds are calculated interesting.
Finally, you're able to react to sudden changes within an event and go against your original bet. You can find this option on any of the best betting exchanges.
As is the case with most things in life, there are a few drawbacks. First, the liquidity on the best betting exchanges is not as high as what you’d expect. Although exchanges have seen an increase in traffic over the last couple of years, it’s not as high as a normal bookie, for the most part. Second, for mainstream sports, you shouldn’t have an issue finding a match. However, for niche sports and subsequent bets, you might find it difficult finding a match. Even if you do, the odds might be rather skewed. Finally, if you’re one to sign up for bonuses and rewards, then you might find yourself feeling disappointed as the availability of these added incentives on betting exchanges pales in comparison to official bookmakers' offers. If you need an overview on bookies, check out our bookmakers for beginners starting guide.
Aside from these shortcomings, betting markets can be quite rewarding and should not be dismissed lightly.
Now that you know the basics of a betting exchange, you might want to try your luck or test your expertise. On a betting exchange site, you’ll decide on an event – let us use a football game as an example. There will be three options. Choose team A to win, choose team B to win, or choose a draw. You’ll be able to see the odds for all these outcomes. Now you decide whether you’d like to back a certain team, which proceeds in much the same way as it does with a conventional bookmaker, or place a lay bet. If you decide on the latter, you’ll find a notice quoting your “liability”. If your chosen bet loses, the liability amount will be deducted from your balance.
As with ordinary betting sites that are run by bookies, on an exchange you’re able to bet on pretty much all the same things. However, betting exchanges favour sports events and more traditional races – horse and greyhound racing. Which sports? Anything from football, motor racing, golf, to darts. There are many other sports you’re able to bet on. There are also options to bet on events that have nothing to do with sport, such as politics. Certain popular competitions will be advertised on betting exchanges and odds provided on different selections of winners.
If you’re curious or convinced to join a betting exchange, you’ll find a list of recommended exchanges:
Betfair is a company that saw the opportunity early and now runs the biggest betting exchange in the world. They’re continuously rated as the one of the best gambling websites online. Reviews state that Betfair has impeccable customer service and a wide range of markets.
Smarkets is another well-renowned exchange which has consistently good reviews. At 2%, they also have a lower commission percentage than the standard Betfair commission rate of 5%.
Betdaq is another sound betting exchange. Interestingly, Betdaq was one of the first exchanges. They provide a generous welcome bonus and good odds.
Does it seem too good to be true? Well, not really. Above you’ve been given the pros and cons of using a betting exchange rather than a bookie. The fact that you’re entering into a transaction with another individual means there are no profit margins to contend with. As betting exchanges do not take on any risk, they don’t add fees. However, they do take a small commission for providing the marketplace for such activities to occur. You’ll obviously need to pay something for the services provided. The fact that the commission on each winning transaction, relative to the amount wagered, is rather small, means this should not raise any alarm bells. You’re guaranteed to pay more on a bookmakers site, as they have profit margins included in their prices. This is a great reason to check out a betting exchange in UK.
On a side note, the fact that so many people are operating in this market, you’d be forgiven if you are hesitant to provide your financial or personal details. The licensed betting exchanges have ensured full anonymity and buffed up security measures that encrypt all relevant data. Your information is safe and secure on these sites.
Before you begin your foray into the betting exchange world, consider using these tips:
There are many other guides out there just like our one about the betting exchange in UK. We provide detailed insight into the gambling world. If you’re interested in betting on sports, take a look at our Asian handicap guide. For an overview of the online gambling world, check out our guide to legal gambling, and if you’re interested in a form of betting which provides low risk then take a gander at our no risk matched betting guide. We also have many other great guides for you to choose from. Don’t miss out on a potential option!
Over recent years, the use of the best betting exchanges in UK has really taken off. Increased measures of security and anonymous betting transactions have paved the way for a formidable alternative to how betting operations take place. Punters are able to back and lay bets in a market which provides fairer odds and better chances for success. It is quite possible that such a system will supersede the more traditional gambling arena of operators. People like to have more control over their betting and the best exchanges allow for this. If you haven’t tried a betting exchange in UK, there’s not much stopping you. Enjoy the transparent experience and the ability to back and lay prior to, and during, an event.
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