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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.
Betting Exchange Terminology
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.
How to Calculate Your Liability at Betting Exchange Sites
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.
Sign-up for a Betting Exchange Account
The process for signing for an account with a betting exchange varies between different operators, but generally follows these steps.
Click ‘Join Now’ on the homepage.
Enter the requested personal details.
Enter the bonus code if required.
Make a deposit.
Verify your account.
Once your account is open, you will generally be required to submit proof of identity and address before you can make any withdrawals.
Bookmakers vs Betting Exchanges
Betting exchanges have undoubtedly been a force for good in the gambling industry, helping to create a more competitive marketplace.
One of the biggest advantages they have over traditional bookmakers is giving you the ability to back and lay bets on the same platform.
The odds are often slightly better on a betting exchange, although many bookies strive to compete with them whenever they can.
Many punters use betting exchanges as a way to guarantee a profit on selected events by using proven techniques such as matched betting.
In simple terms, this is a strategy where a punter bets and lays to cover every possible outcome in an event to create a risk-free scenario.
This methodology is often linked to betting offers such as free bets, which can be manipulated to ensure you end up winning regardless of the outcome in an event.
By opening accounts with several bookmakers and betting exchanges, you can use matched betting to keep your bankroll ticking over nicely.
Betting Exchange Pros & Cons
If you are thinking about opening an account with a betting exchange, it is worth noting some of the pros and cons before parting with your hard-earned cash.
As we’ve mentioned previously, the option to lay bets is one of the major advantages a betting exchange has over a traditional bookmaker.
The odds on betting exchanges are often more generous, which means you can extract more value whenever you are placing sports bets.
However, betting exchanges have fewer markets than traditional bookies and there is no guarantee you will find someone willing to lay your bet.
It is not usually feasible to place multiples on a betting exchange, meaning you need an account with a sportsbook if you like accumulator bets.
Betting exchanges also take a small percentage commission from your winnings, although this is often counterbalanced by the more generous odds on offer.
How to Choose a Betting Exchange Site
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.
Bonuses & Promotions
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.
Choice of Bets & Markets
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.
Betting Exchange Tips & Strategy
There are several strategies you can use to make a profit on betting exchanges. Here is a quick look at a couple of our favourites.
Scalping has its roots in market trading – in simple terms, it generates a profit by taking advantage in short-term odds fluctuations.
For example, you lay a £100 bet on Man United to win a game at odds of 2.18. Your overall liability at this point is £118.
The odds subsequently drift and you are able to back the Red Devils to triumph at 2.24. You wager £100 to secure a potential profit of £124.
Assuming both bets are matched, you have now locked in a £6 profit (minus commission) if United emerge victorious.
If they draw or are defeated you have a full refund of your original stake – effectively making this a no-risk scenario.
You could also consider using scalping on the in-play markets, although the quick fluctuations in odds make this a riskier strategy.
Dutching is a system that requires to wager on more than one outcome in a single event. It requires plenty of discipline, but can deliver solid returns.
Many punters use it in six runner greyhound races, although it is worth noting that it should only be utilised when the odds are framed in your favour.
In a race with six runners, it is often feasible to narrow down the field to just three dogs that are likely to finish first.
If you have a market where you can back those dogs at 4.00 or better, you can use the dutching system to spread your chances of winning.
A £10 bet on those three dogs would result in a £30 outlay, but your return would be at least £40 if one of your selections wins the race.
While there is no guarantee that one of the other three runners won’t win, you can reduce the risk by identifying races where their odds suggest an upset is extremely unlikely.
Frequently Asked Questions
Are betting exchanges legal?
The betting exchanges we recommend are all fully licensed and regulated to offer their services to punters in the UK. You can sign-up for an account safe in the knowledge that your winnings will be paid out if you use one of these sites.
Which are the best betting exchanges?
There are several reputable betting exchanges operating in the UK. Our favourites include Betfair, Matchbook, Spreadex and Smarkets.
Why do I have to pay commission?
Traditional bookmakers make a profit by building a margin into each of their markets. Betting exchanges take a small percentage commission from your winnings for facilitating your wagers on the site.
What payment methods can I use?
The top betting exchanges offer a wide range of payment methods including debit cards, e-Wallets and bank transfers. Check the account section on your chosen site for full details.
How long do withdrawals take?
Generally speaking, it should take no longer than 2/3 working days to receive your withdrawal from a betting exchange.