What Is Bet Exchange
Betfair is the biggest exchange in the world and was founded at the turn of the millennium. They launched in Australia in 2006. Betfair was founded in 2000 by Andrew Black and Edward Wray. It was the first.
- A betting exchange is an online tool that allows gamblers to bet directly against each other, as opposed to betting against traditional bookmakers. As sports betting is essentially a game of opinions, betting.
- A betting exchange is an online platform in which punters who want to back a particular outcome are matched with others who are happy to lay them the bet. If you want to place “lay bets”, you can’t do.
If you are getting into matched betting you need to be familiar with the betting exchanges. The exchange allows us to place lay bets which are the bets we place to bet against the bookies.
A bookmaker will alow you to place back bets only. For example: betting on Arsenal to win, betting on Andy Murray to win, betting on a score line etc etc. This is great and we need this as well but this is quite straight forward and most people are familiar with back bets. Lay bets are the opposite of back bets but they are no more complicated once you get into them.
Very simply a lay bet is betting against the outcome, so if our back bet is Arsenal to win, our lay bet is Arsenal not to win. The draw is covered by the lay bet so no matter the outcome of the game we have covered all potential outcomes by placing a back bet and a lay beet.
Example. Arsenal vs Manchester United
- Back bet – Arsenal to win
- Lay Bet – Arsenal not to win
Potential Results
- Arsenal Win : Our back bet wins and our exchange bet loses
- Draw: Our lay bet wins and our back bet loses
- Arsenal lose: Our lay bet wins and our back bet loses
So no matter what happens we having a winning bet and a losing bet and will roughly break even. This is the basics of a matched bet.
There are other uses for the exchange as well. We can trade on the exchange. If we place a back bet or lay bet at the exchange we can trade out of the bet for a profit if the odds move in our favour. Of course this is a gamble as the odds may move against us meaning we will lose money.
Many people will back a horse and then lay it in play to make a profit. Often a poor horse can be backed for huge odds but if it goes to the front in the race we can trade out for a nice profit. Doesn’t matter if the horse ends up coming last we have already traded out for a profit. This is advanced gambling though and should only be attempted once you understand what you are doing and the risks involved.
Who are the betting exchanges?
There are a few out there, the main one is Betfair. There is also Smarkets, Matchbook and Betdaq. Each exchange charges a commission on winning bets. We have to take this commission into account when matched betting. Betfair charges 5% and Smarkets 2%. However Betfair offers far more markets and because there are more people using Betfair there is usually more money in the market meaning we can get larger bets on.
Because the exchanges make their money from commission they are quite happy to welcome matched bettors and you will never get gubbed or restricted from the exchange. You aren’t actually betting against the exchange company but you are betting against other punters. All the money floating around in the exchange comes from other punters just like yourself.
Liability
Liability is what we will potentially lose on a lay bet. Unlike a back bet where we lose our stake with a lay bet we lose the liability. That is because we are essentially acting as the bookmaker. That means you can lose more than your bet but as long as you have backed at the bookie as well your losses will be covered by the bookie bet winning.
This also means we have to have enough money in our exchange account to cover the liability. If we don’t we won’t be able to place our lay bet.
Which Exchange should you use?
Either Betfair or Smarkets. The others are often lacking in liquidity meaning it’s hard to get our bets on. If you are a complete beginner go for Betfair. Even though they charge more commission most tutorials are written for Betfair and there site is much easier to use. Once you are comfortable you can start using Smarkets for some of your lay bets to benefit from the lower commission rate. You will always need money in Betfair though as a lot of lay bets are not covered by Smarkets.
Become familiar with how they work before you starting placing large bets and always place your back bet before you lay. Because you can potentially lose much more money at the exchange you need to make sure you get your back bet on first. If for some reason you layed first and then couldn’t get a back bet on because the event had started or you find yourself restricted you could potentially lose a lot of money. So always back and then lay.
A betting exchange is an online platform in which punters who want to back a particular outcome are matched with others who are happy to lay them the bet.
If you want to place “lay bets”, you can’t do this with a traditional bookmaker. You can only lay on a betting exchange which is effectively a free marketplace for trading bets.
What does a betting exchange look like?
The interface of a betting exchange can look fairly daunting and quite different from a bookmaker’s online sportsbook. But have no fear.
In this market, the left-hand columns of numbers under ‘Back all’ are for punters who want to back Man Utd, Leicester and the draw respectively. The right-hand side is for the layers – those who want to be bet against either Man Utd, Leicester or the draw.
The bold numbers in the boxes represent the current odds available. You can only select the biggest odds available as the exchange wants to get you matched at the biggest price.
For a home win for Man Utd, £217 is currently available to match at 1.89, or nearly 10/11 in fractional odds. Once that £217 has been collectively matched by punters, £854 will be available at 1.88.
On the betting exchange, odds are always represented as decimals. In some ways, this format is easier to envisage potential winnings. £10 at 1.89 would derive £8.90 profit (10 x 1.89) in addition to your £10 stake.
How do I lay bets on a betting exchange?
To lay on a betting exchange, simply hit the lay button for the selection you want to bet against in your chosen market.
What Is Betting Exchange
As you can see, if your £10 lay bet Cloak Of Spirits wins this race, your liability is £22. You will also lose your £10 lay stake, so the total payout is £32.
Because you’re acting the role of bookmaker, if any of the other runners do the business your winnings will be £10, the equivalent of your original stake. The shorter the odds of the selection you lay, the smaller your liability.
The betting exchange helpfully outlines all the potential results when you’re in the process of placing your bet. You can find these figures underneath each selection in a market, here on the left-hand side of the page.
Betting exchanges v bookmakers
As well as the chance to lay bets, betting exchanges charge commission on winning bets. Think of this as their reward for allowing backers and layers to bet against each other. Bookmakers do not charge commission, but theoretically it’s harder for punters to succeed with them over betting exchanges.
Why? Because traditional bookmakers lock in a theoretical profit to each individual market or ‘book’, known as an overround.
The probability of all the odds in a particular market – let’s just say a horse race of eight runners – should total 100%. After all, one of the eight runners will surely be declared the winner. But the total probability of the combined odds offered by a bookmaker would likely amount to 112%, or an overround of 12%.
What Is An Exchange Bet On Betfair
Betting exchanges do not have a built-in overround. Their ‘books’ – created by the ebb and flow of money between backers and layers – total much closer to 100%.
What’s wrong with traditional bookmakers?
What Is The Liability On Bet Exchange
Theoretically, punters have a better chance and the overall odds are bigger on the betting exchange model. This is especially true among the bigger-priced contenders in a market.
Ultimately, the unique selling point of a betting exchange is being able to lay. This opens up the opportunity for more betting behaviours for potential profit, including arbing, trading and matched betting.
Why is betconnect different from other betting exchanges?
We offer a wide range of different markets across 14 of the world’s best sports and betting mediums. The difference with betconnect is that our Punters do not have to actively seek out markets.
Instead, we send them Bet Requests via our Pros – our backers looking to get on. Our Punters have a much better idea who they are betting against They are essentially receiving betting intelligence from well-informed betting brains with every Bet Request.
With no need to trawl through an abundance of markets like other betting exchanges and on a clean, easy-to-use and transparent interface, betconnect is the world’s social betting network that charges 0% commission for our Punters. Get involved!