Wanna know every punter’s wildest dream? Become a bookmaker himself! As he gains more experience in betting, he tends to better analyze what each bookie thinks before offering certain odds sets. This turns the bettor - online bookmaker relationship into to a mind game.
The introduction of betting exchange platforms on the market, gave every punter the chance to act like a bookmaker. This means that they can not only back a certain option with their money and hope that they will win, as typically done on online bookmakers, but also “lay” an option, meaning that they expect a certain aspect to NOT be confirmed.
Of course, in order to bet with the “lay” option, you need to tie down a different amount of money compared to a traditional back option. For example, if you “lay” a bet on 5.00 odds, you need to bind €40 from your available bankroll to win €10. This is due to the fact that if the punter who placed 10€ on the 5.00 option wins, he will have to get paid from your money. The option of laying bets is the main reason why bet exchange platforms are becoming more and more popular among punters.
Betting exchange vs online bookie
Let’s clear this out from the beginning: A betting exchange is not an online bookmaker and doesn’t work like one. It’s a betting platform, a place where punters from all over the world have the opportunity to “match” their bets on certain odds.
If a punter wants to bet €10 on a certain outcome (TEAM A to win at 2.50 odds), there has to be another punter, willing to “match” the bet and “lay” €15 on the same outcome.
- In case TEAM A wins, then the first punter gets €25 (his €10 and another €15 as his earnings).
- If TEAM A doesn’t win, then the second punter gets €10, the initial bet of the first punter, as in this case he has acted like a bookmaker.
It’s clear that betting exchange platforms don’t have oddsmakers who set the odds. All punters are able to place their bets on any kind of odds, as long as other punters are willing to “match” their bets. This seems like a high roller heaven or the perfect place for bettors who have had online bookmakers place limits on their stakes, usually after having continuously been winning for a long time.
Due to much smaller overrounds, the odds that you can find on betting exchanges platforms are far better, even compared to the best online bookmakers. However, you have to keep in mind that the odds offered don’t include any vig. Almost all exchanges make their living by charging a commission fee, usually a percentage not exceeding 5% of the net winnings of each event.
Although everything might seem perfect with betting exchanges, there is a single disadvantage that deters many bettors: You cannot place any accumulator bets. Some betting exchanges might offer some multiples, however, there are few and pre-described by the exchange platform many hours, or days, before the match starts. This means that the punters who wish to go against these parlays (and “lay” their money on them) could do so.
Another problem you could face when placing bets in betting exchanges is that you might not be able to win as much money as you'd wish on certain leagues. Usually the betting exchange will “lays” some money in all markets, so it’s difficult to find an empty one, especially during matchdays, but the odds are usually not as competitive as on online bookmakers or the total staked amounts are very small.
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Backing a bet
This is similar to the traditional betting you would normally do on all other online bookmakers. As long as someone is “laying” money on your favorable choice, you can bet your desired amount and if your bet wins, earn your money multiplied with your chosen odds. To better identify your type of bet, both the Betfair exchange and Matchbook exchange platforms use the same light blue color on their “back” choices.
Laying a bet means acting like the bookmaker. In other words, laying means accepting the bet a punter wishes to wager on the specific odds found on the platform. In every betting exchange platform there are three odds on “back” and “lay” selections. Of course the “lay” selection can never be lower than the “back” at the same time; otherwise there would be a surebet.
When you “lay” a bet it’s like placing a bet yourself, only from the opposite side. A “backer” bets on TEAM A TO WIN, a “layer” agrees to match the bet with the anticipation that TEAM A WILL NOT MANAGE TO WIN, if he is to win his bet. One of the most well known bet exchange strategies is laying the draw, that is still used to this day by many punters.
The betting exchange acts the middleman to the above transaction, and is neither the “backer” nor the “layer”. The punters/customers attracted to this style of play could act like “backers” or “layers” at their will, with any amount they like. The only concern of the online betting exchange platforms is that all matched bets are settled the right way (i.e. there has not been any misunderstandings in results) and that all winners receive their money.
Live betting, “locking” profit
The most popular use of sport exchanges is during in-play. When a match or a race is in progress, punters generally look to “match” their bets in higher odds. Usually there’s live streaming available, similar to online bookmakers.
During live betting the betting exchange platforms are interfering to the match, by halting the betting procedure during any events that are likely to cause a big change on the odds. In football matches in-running betting stops when there’s a red card, a goal, a penalty kick or, in some cases, a dangerous foul.
Usually there’s a time delay before a bet is accepted by the platform. This is instituted to protect some naive punters from accepting bets, who have become highly favorable within seconds of play. By using the in-play betting feature you can also “lock” your earnings, just like the cash out service on online bookmakers.
Betting exchanges are frequently used by traders. A trader backs a certain bet hoping to make a profit by closing out the bet later at higher odds and making a profit. There’s always the possibility of odds moving against the trader, meaning that he might close his bet to minimize loss. Trading usually occurs during a sports event, however, it can also be done before the start.
Traders might use betting exchanges to make betting combinations by using both their betting exchange account and an online bookmaker’s account. The trader usually lays a low amount on a betting exchange and then backs a higher price on an online bookie.
Because of the overround, which is not included in the offered odds, backing or laying a selection in a certain market will not guarantee you a profit. Usually traders take this into account and try to make over 5% profit, as to be sure to earn some money.
Online bookies’ opposition
From the first moments of betting exchange existence, there has been fierce criticism by online bookmakers, especially in the UK. Their main argument is that letting punters “lay” a bet makes it easier for them to manipulate a result. It’s easier to ensure that a team will lose a match than win it.
Betting exchanges have responded to these accusations by claiming that bookies are only concerned about their interest and not protecting sports from corruption and manipulation. They argue that their customers are not “anonymous”, as accused. Creating an account on a betting exchange requires that you present the same ID facts as on any other betting site. In addition, betting exchanges argue that all odds and transactions are completely transparent, meaning the anti-corruption authorities can be alerted almost instantly.