Betting exchange: how does it works

Betting exchange: how does it works

Betfair Exchange
Autor betsonly 27 Mar 2017

In this article, we are going to explain how the Betting Exchange works and its differences with the traditional online bookmakers.

What is a Betting exchange and how does it works? This is a question that maybe came to your mind when reading some articles about online betting. How do Betting Exchanges differ from traditional bookmakers? Don't worry, we are going to explain it all for you in this article.

A traditional bookmaker, such as Bet365 or Bwin, determine betting odds for all possible outcomes of an event and you, as a customer, bet against the bookie. Betting Exchanges really do work differently, creating a marketplace for bettors. Have you ever wanted to play as if you were a bookmaker? With Betfair Exchange, you can. The platform offers you the chance to set your own odds and place a bet.

How does Exchange works? It's very simple.

It's a person-to-person betting method. The system connects two or more parties with a different point of view on a specific sport event. This way, you don't bet against the bookie, you bet against other gamblers. In this scenario, you can act like the bookmaker or like a normal bettor. The following example will illustrate what we are explaining.

Let's say you think Roger Federer is going to win his next match against Rafael Nadal. You offer then odds of 2.0 on Federer winning the match and you say how much money you are willing to risk, let's say 50 euros. You will have to wait to see if other gamblers feel attracted to that wager. If the bet is too large, probably it will be needed more people for the bet to be matched. Your bet will be 'matched' if the money is equalized (50 euros). It will be 'partially matched' if the system is waiting for more people to lay on your bet or 'unmatched', if finally your bet hasn't been accepted.

You are probably wondering how do the betting exchanges make money. They take a commission on your winnings for acting as the intermediary. How much is this commission? It depends, but it's around 5% of your winning bets.

What are the pros of Betting Exchange?

  • Normally, odds on Betfair are way higher than traditional bookmakers (approximately up to 20%). This could be a very interesting option for advanced betting users.
  • In a traditional online sportsbook, you bet against the bookie. In betting exchanges you bet against other gamblers.
  • The prices are not controlled by the bookmaker. You can set odds by yourself or you can accept wagers offered by others gamblers.
  • There is no money limit. You just need to find someone who accepts your wager, no matter how large is it.
  • You can lay any selection, which means you can bet on an outcome not to happen.
  • If you are an experienced gambler, you can guarantee yourself a profit trading live sports. Trading is all about playing with the sports betting odds. You can "buy" or "sell" bets in the exchange market, in order to make money regardless of the outcome of a sporting event. We remind you that it takes time and hard work before you become a successful trader but it’s worth the effort.