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Betting Exchange in UK

Betting Exchanges Explained

Last Updated on 05/07/2024
Fact checked by: James Leeland

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.

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Best Betting Exchanges For 2024

Who Are The Best Betting Exchange Sites?

Betfair - Longest-Standing Betting Exchange

Betfair free £20 exchange bet
Betfair pros and cons
  • Wide range of exchange odds
  • Oldest betting exchange
  • Referral bonus
  • Nothing really, that’s why it’s been around for so long

The Betfair Exchange was launched in 2000 and has since gone from strength-to-strength and it is basically a betting platform that allows punters to bet against one each other.

There is a lot of emphasis on the betting exchange side of the business with a special promotion available for new customers.

Betfair gives customers the choice of a welcome offer when they sign-up, and one of those offers is suited to the betting exchange.

New customers will be rewarded with a free £20 exchange bet if the bettor bets £20 on that market. If the bet loses then the customer will receive the offer.

All the sports available in Betfair’s regular sportsbook are available in the betting exchange. You can place bets on sports like American Football, football, cricket, rugby league, snooker and basketball.

If you are a newcomer to the world of betting exchanges, then Betfair caters for you as well. They have a beginner and advanced guide on how exchange betting works.

By clicking on ‘How To Use Exchange’ you will see a number of pages available that shows you exactly how the system works and how you can get involved.

Having a step-by-step guide available is very useful. It is not a sure-fire guide to help you win, but it will probably stop you from making unnecessary mistakes.

Smarkets - Dedicated Betting Exchange Site

Betfair free £20 exchange bet
Smarkets pros and cons
  • Dedicated to betting exchange odds
  • Brilliant website that's easy to navigate
  • Plenty of sports available
  • No casino section

Smarkets started 10 years after Betfair introduced their betting exchange to the world, but they operate in a similar manner.

Although Betfair has a sportsbook section, Smarkets just deals with the betting exchange side of things. They have a wide range of sports available such as football, cricket, basketball, boxing, rugby league, MMA and tennis.

Smarkets prides itself on offering peer-to-peer trading on not only sports but politics as well and claim they have the lowest commission rates on the market.

There is no real welcome bonus offer because it does not operate like a regular sports bookmaker, but it does offer 0% commission to new customers for 60 days instead.

New customers will receive the 60 day 0% commission window once they have deposited £10 into their account by using the code COMMFREE. It is important to note that the offer is not valid if you use PayPal, Neteller or Skrill as a payment method.

Key takeaways 

  • Betting exchanges have become prominent in the online gambling world.
  • Try to use an exchange in tandem with another platform.
  • Individuals will match bets against one another on a betting exchange in UK.
  • The best betting exchanges provide a transparent platform with great odds.
  • Prices on the markets are set by thousands of bets instead of one entity or person.

Betting exchange terminology 

Back Bet: Normally when you are using a sportsbook, when you place a bet you are backing a team to win. You are backing your selection and hoping that outcome is successful

Lay Bet: 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. When you place a lay bet, you are betting on that outcome not to happen.

Back To Lay: This is a common strategy where bettors attempt to take advantage of the fluctuating prices in order to make a profit regardless of the overall outcome. Backing and laying on the same market is usually referred to as ‘hedging.’

Drift: You may see the term drift on the exchange market. This means the odds on the selection are increasing.

Dutching: This means backing more than one selection for an event to make sure you get the same amount of profit if any of your bets come in.

Green Book: Obtaining a Green Book means creating a position on the betting market where you put yourself in the green rather than the red and eliminate any risk. This means betting on every possible outcome so that a profit is guaranteed,

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.

Steaming: We mentioned that if the odds are getting longer it is known as drifting. If the odds start to get shorter then that is known as steaming.

Traded At 1.01: 1.01 is the shortest price available on betting exchanges and more often than not that selection will win. If it doesn’t it is big news. You sometimes hear the term ‘gubbed at 1.01.’ Which meant the horse or team you selected at that price did not win.

Once you’re familiar with these terms, you should feel more comfortable.

How does a betting exchange work?

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.

Pros and cons of a betting exchange

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

Pros of betting exchanges 

Ability To Bet Against An Outcome (Lay Betting) 

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.

Improved Odds

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 bookmaker.

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.

No Stake Limits

There is no set limit to what you bet on when you use betting exchanges. They are not like regular bookmakers. They will get a cut of the bet no matter the result, so in reality they want you to bet as much as possible.

Cons of betting exchanges 

Liquidity

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.

Commission

Betting exchanges tend to take a commission from your winnings when you win your bets. It is important to know that every betting exchange does this, although Smarkets have their welcome promotion that sees 0% commission available for 60 days.

Not As Many Sports Markets

For mainstream sports, you shouldn’t have an issue finding a match, but for some niche sports there might not be a lot of calls for them.

Lack Of Bonuses

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.

You would be forgiven for thinking that betting exchanges only use popular sports like football and horse racing, but most betting exchanges cover a number of different sports.

Betfair, for example, has 21 different sports markets that include cricket, rugby league, boxing, rugby union, motor sport and tennis. There is also a special politics section as well.

The football section will have a lot of separate markets like over/under goals, both teams to score, first half goals, correct score, half time and double chance. So, you have a lot of scope to be betting on, whereas sports like rugby league will only have two or three markets available.

So, you can bet on a wide range of sports but some markets are more loaded than others.

How to place bets 

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.

Betting options on a betting exchange in UK 

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.

The best betting exchanges in UK 

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.

What’s the catch? 

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.

Tips for a successful betting exchange experience

Before you begin your foray into the betting exchange world, consider using these tips:

  1. Place realistic wagers. To have your bet matched by another punter, your wagers need to be reasonable and appealing. If the odds you propose on the wager are fair to both parties, you will avoid a lopsided bet and have more success attracting another bettor.
  2. Wager bets on the sport you know best. This way, you can wager fair bets with fair odds, and you will know if you are making the right call based on your knowledge of the sport. This will help to ensure that your bets are getting matched.
  3. Know the terminology. You'll be well out of your depth if you don't thoroughly understand what the betting exchange basics involve, so become familiar with the strategies behind the words to set yourself up for a favourable outcome. Reading this guide is a great start!
  4. In-Play Betting. Using live betting in-play markets like cash out and live streaming can be very beneficial. Using cash out can sometimes leave you better off by cutting short your bet for a small profit rather than a big loss. If you are live streaming a game, you can see how the games are going and choose the best time to cash out or let it ride.
  5. Check For Bonus Offers. By rule, most betting exchanges do not offer regular welcome offers like sportsbooks do because it is a different form of betting. However, Betfair have started with a small offer that sees new customers get a free £20 bet to use on the exchange market if their first £20 exchange bet is a loser.

What other betting guides & strategies are available? 

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!

History Of Exchange Betting In The UK

It is believed that the first ever betting exchanges in the UK were Betfair, Flutter.com and Matchbook. Betfair and Flutter merged together in 2001 with the former chosen as the primary betting exchange before Flutter ceased trading in 2002.

Betfair has been seen as the leading betting exchange for years, and although companies like Smarkets and BetDaq are now main competitors, they still hold an advantage over them.

Over the years, the betting world has been hit with corruption allegations especially in horse racing, but betting exchanges are seen as a way to avoid those kinds of claims

Conclusion 

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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Best Betting Exchange FAQ

✖️ What Is A Betting Exchange?

A betting exchange allows punters to bet against each other rather than a bookmaker. A betting exchange does take the risks like regular sports bookmakers. They provide a platform that allows customers to match bets against each other and takes a small commission.

👌 What Is A Lay Bet?

A lay bet is when you are betting on a outcome not to be successful. By placing a lay bet you are hoping to win a stake back from the backer. If the outcome is a winner for the backer, then you pay the backer, but if you are successful the backer has to pay you.

❓ How Does A Betting Exchange Work?

In the world of betting exchanges, you will hear about lay betting and backing. With a lay bet you are backing that selection to lose. If you back a selection, you are wanting that one to win.

🤷 Does Every Bookmaker Have A Betting Exchange Section?

The simple answer is now. There is only a select few available in the UK, but it has the potential to grow. Betfair, Matchbook, Smarkets and Betdaq are the frontrunners and it is easy to get involved.

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