Betting exchanges are fast becoming the betting outlet of choice for many professional and recreational sports bettors. The versatility that you get form an exchange is like no other; and it’s this versatile which appeals to such a wide audience.
An exchange works by offering the punter the chance to both back and lay a result. So where a traditional bookmaker only allows you to back a results (as they lay the result) an exchange allows you to essentially become your own bookmaker by setting your own lines on a host of different sports.
Since the first exchange hit the betting industry in 2001, the concept has risen to massive heights and companies such as Betfair are now turning over hundreds of millions in terms of revenue each year. In fact, the exchanges are starting to pull in as much as the traditional bookmakers; an astonishing feat considering they make their money by charging a small commission on every bet. Essentially the outcome of a result on any market is irrelevant as a result of this commission, meaning it’s easier for an exchange to promote more sports and in turn, more markets.
Advantages of using a betting exchange
The first and probably biggest advantage exchanges have over their rivals is that more often than not, they have much more favorable odds. The main reason for this is that the people setting a line will be just regular bettors and they will unlikely be looking to set a line which needs to be of a certain percentage of money going on to that market; like bookmakers do.
To break this down a little more, let’s say our local high street bookmaker had set a line on Manchester United to win the Premiership at 3/1. But we know our local bookmaker is going to be getting every margin out of their price as possible, so in reflection the true odds may be around 4 or even 5/1. It’s much more likely that someone is going to lay the larger price on an exchange as it still poses good value to them and there is no need for them to sap every molecule of value out of setting a line.
We briefly mentioned earlier in the article how betting exchanges didn’t actually deal with the price at all due to it being between two separate people. As a result it’s so much easier for an exchange to open up a new market and set it away. They have no need to get anyone to research the competition, set the odds and adjust the odds as money starts to roll in. They make their commission no matter what the result, so it’s actually in their interest to open up as many markets as possible for their users. Obviously the bigger markets such as your football, tennis and horse racing will be fairly well covered anyway, but sports such as floorball, bandy and volleyball are much more of a niche but are still all available on the exchanges.
Guaranteeing a profit on any result is something all bettors dream of. Usually with your traditional bookmaker you have to let any result ride until the bet is settled. With an exchange you can guarantee your profits because of course you can lay bets as well. Betfair have recently implemented a ‘Cash Out’ feature on certain markets. This allows you to basically take a guaranteed profit (or loss) from that market at just the click of a button.
Disadvantages of a betting exchange
The biggest downside to the betting exchange is the commission you have to pay on all winning bets. Now this can range depending on which exchange you use – many exchanges will use their commission structure as a bartering tool to get new users – but will generally range between 3% and 5%. Whilst this seems like a nominal figure over time it will add up, especially if you are a successful bettor. Whilst traditional bookmakers don’t charge commission on their bets you have to bear in mind that more often than not the exchanges will have better odds to start with. So it’s important to work out, after commission, which will be more profitable for you.
The only other real negative of the betting exchange is the lack of betting specials. A lot of bookmakers will likely give you an enhanced price special on certain sports markets; such as three way accumulator, best industry odds on certain horse races or enhanced football specials. As exchanges don’t actually set their own lines then it’s impossible for them to do this because it’s impossible for them to say exactly what the odds will be as it’s out of their control.
Top Betting Exchanges
Betfair – There’s of little doubt in the industry that Betfair is at the top of the pile when it comes to betting exchanges; and by some distance. Their market coverage is simply staggering and away from betting they have a dedicated live streaming service, betting blog with some of the biggest names in sport writing for them, a brilliant betting app and a strong betting community behind them.