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A betting exchange is a peer-to-peer platform that allows punters to place wagers against other bettors rather than with traditional betting sites.
The odds on betting exchanges are generally more favourable than on a sportsbook, making them a hugely attractive proposition from a punting perspective.
Betting exchange sites make their money by charging a small commission on your winnings, but the more attractive odds help to compensate for this deduction.
The commission charged differs between betting exchange UK sites, although 2% tends to be the standard rate for most operators.
There are two kinds of bettors involved when any wager is made on a betting exchange – one who places a ‘back’ bet and one who ‘lays’ the bet.
For example, let’s say that you want to place a wager on Manchester United beating Liverpool in a Premier League match.
In this scenario you are the person placing the ‘back’ bet with another bettor who ‘lays’ the bet. In other words, the other person does not think Man United will win.
Now we’ve established the core construct of a betting exchange, let’s assess those two key elements in a little more detail.
In simple terms, placing a ‘back’ bet on a betting exchange is the same as wagering on a selection with a traditional bookmaker.
Based on the example above, if you fancy Man United to beat Liverpool, you would click the odds listed in the ‘back’ column to place your bet.
If you stake £10 at odds of 3.00 and they won the game, you would receive £30 (10 x 3.00) less whatever commission is deducted by the betting exchange.
However, if the match was drawn or Liverpool win, your stake would be lost and the person laying the bet would make a profit.
When you ‘lay’ a bet at a betting exchange you are effectively acting as the bookmaker by offering odds on the outcome of a sports event.
For the Man United versus Liverpool match, laying the Red Devils means you are taking bets on them not winning the game.
If they defeat Liverpool, you will pay out to bettors based on the odds you offered before the match gets underway.
However, if the match is a draw or Liverpool win, you win the amount that has been staked less a small percentage commission taken by the betting exchange.
Whenever you act as the layer, your betting account must have sufficient funds available to cover any potential payouts to the bettor.
If you accepted a £10 bet at odds of 3.00 on the Man United v Liverpool game, your liability would be £20.
Having less than this in your account would mean you could not lay the bet in full.
The process for signing for an account with a betting exchange varies between different operators, but generally follows these steps.
Once your account is open, you will generally be required to submit proof of identity and address before you can make any withdrawals.
Much like traditional bookmakers, there are plenty of different betting exchanges to choose from on the internet.
The best betting exchange sites are fully licensed and regulated to offer their services in the United Kingdom, and advertise verifiable links to the relevant information.
There are several other elements you should consider before signing up for an account with an online betting exchange. These are as follows:
One of the primary reasons for using a betting exchange over a traditional bookmaker is to try and extract more value from your bets.
This is easy to check by analysing prices on odds comparison websites to see which exchanges offer better value than online sportsbooks.
Betting exchanges generally offer welcome bonuses to new punters, often in the form of a matched bonus on your initial deposit.
The top sites also have a wide range of ongoing promotions including free bets, refer a friend schemes and best odds guaranteed on selected sports.
In addition to ‘back’ and ‘lay’, the top betting exchanges offer a variety of markets on sports such as football, basketball, rugby and tennis.
While the choice is unlikely to be as great as you would find on a traditional bookmaker, this adds some extra spice to wagering on an exchange.
Betting exchanges charge a commission on your winnings – this may be as high as 4%, but is often just 2% on the best betting exchange sites.
Always check the terms and conditions before placing any bets to ensure that the commission on your chosen betting exchange meets your requirements.
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