Wha is a Betting Exchange?
Betting exchanges are very similar to bookmakers, there’s just one key difference.
Instead of betting against a bookmaker, we bet against other people.
That’s why it’s called a betting exchange; people are exchanging bets.
Before betting exchanges came along, our only option was to place a bet at the odds set by a bookmaker.
Betting exchanges allow us more freedom in that we can choose what odds we want to place a bet at. If another user is happy to take (‘lay’) the bet, the bet becomes matched.
So, you have one user playing the role of punter and another user effectively playing the roll of bookmaker.
While on the surface betting exchanges offer the same betting opportunities as a bookmaker, there are a few key differences.
Firstly, exchanges make money in a different way than bookmakers. Bookmakers allow customers to place a bet on any outcome of an event, then they lay the bet themselves offering up their own money in the event the customer’s bet wins. Betting exchanges, however, don’t lay any bets themselves but instead rely on other customers to both back and lay the bets against each other. Betting exchanges charge a small commission fee on every bet placed to make their money. This fee is simply a percentage of estimated winnings.
Secondly, betting exchanges aren’t as flexible when it comes to accumulators. The customer can’t determine the outcomes contained in the accumulators themselves. They also tend to restrict the odds, so that in the event of a big win, there will be less money being made.
Lastly, betting exchanges often have better odds compared to bookmakers. That’s because their market is a free market and their odds are controlled by the punters, whereas bookmaker’s set their own odds. This allows customers to find better value and is a big reason why betting exchanges are so popular
Best betting exchange?
Being able to bet that something won’t happen is what makes matched betting possible, so you’re going to need a betting exchange account.
With headquarters in London, Smarkets is one of the big up and comers of the betting exchange world. Smarkets angles itself as a more advanced trading platform compared to its rivals. A high-tech startup and definitely going from strength-to-strength, whilst becoming more and more popular with punters due to their competitive commission rate.