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Pretty much everyone knows what a bookmakers is. Even if you’ve never placed a bet in your life there’s a real chance that you’ll know how it all works. Bookies offer odds on certain events happening, you place a bet based on those odds and if your bet wins you get money for your success. When it comes to sportsbooks that’s exactly what happens only the events that you’re betting on are sporting events, as opposed to the winner of a talent competition or the name of a royal baby.
But what about betting exchanges? Even some seasoned bettors who have spent years placing bets on horse racing or the dogs might not know much about that. How do betting exchanges work? How do they differ from standard bookmakers odds and offers? How do you make money through them? Perhaps the most important question of all is which bookmakers offer betting exchange services and how do they differ from each other? If you’re interested to know the answers to these questions then you’re (hopefully) in the right place.
What Is A Betting Exchange?
In actual fact, betting exchanges aren’t all that different from betting with a normal bookmaker. The difference is that it is essentially person-to-person betting rather doing it with a company.
The big difference is that with a typical bookmaker they offer odds and take the bet, whilst with betting exchanges you can essentially be the bookmaker. Some punters will bet in the traditional method and place a normal bet, whilst others will ‘lay’ the bet by playing the role of the bookie.
The placing of a traditional ‘win’ bet in the betting exchange world is known as a Back Bet. The best way to understand this is to think that you’re ‘backing’ a certain event to happen. So, for example, you’re backing Liverpool to win the FA Cup. The bet is essentially the same as a ‘win’ bet with a bookmaker.
If you go against the bet, or ‘play the part of the bookmaker’ if you like, then you’re Laying the Bet. Using the example above, Laying the Bet would mean that you want Liverpool to not win the FA Cup. Let’s say we’re talking about a normal match and you Back Bet Arsenal to beat Chelsea, that means you want Arsenal to win. If you Lay the Bet then you want Chelsea to win or for the match to end in a draw.
The beauty of exchange betting is that you can lay specific outcomes. Say you don’t think there’s any way that the Arsenal v Chelsea match is going to be a draw, well then you can lay the draw. That way if either team wins then you’ll make money. The only way you’ll lose money is if you were wrong and the match does indeed end in a draw. It might seem confusing but in actual fact it’s really not once you get your head around what’s going on.
Trading is where you bet on two different outcomes on the same event in order to ensure you always make a profit. Let’s say that you have placed a Back Bet on Manchester City to beat Spurs in the Premier League. You’ve placed £100 on City at 2/1, meaning you’ll get £200 profit if they get the three point but you’ll lose £100 if they don’t. As kick-off approaches the odds shift and you place a Lay Bet of £110 on City at Evens. If they win you lose that £110, but if they lose then you win £110.
In the scenario where City win you win £200 from your Back Bet but lose £110 from you Lay, meaning that you end up with £90 profit. If, on the other hand, Man City lose the game then you lose your £100 stake from the Back Bet but you’ve made £100 from the Lay Bet, meaning that you still end up £10 to the good. That is Trading and is a handy way of ensuring you don’t lose money, though the odds have obviously got to line up for you to be able to do.
What Bookmakers Provide Exchange Betting?
BETDAQ are owned by Ladbrokes (who are owned by GVC holdings) but are still an exchange in their own right. If you mainly bet on fixed-odds and occasionally on the exchange overall you would be better with Ladbrokes. If, however, you bet more than half of the time on the exchange then BETDAQ is much better as this is where the focus is, you can also claim a welcome offer unlike with Ladbrokes.
One of the big selling points of BETDAQ is they have a 2% flat commission rate on all Exchange Net Market Winnings and on all Virtuals Sports Markets. For lower stakes bettors this offers much better value than Betfair, where you need to reach a high loyalty level to achive a similar rate.
BETDAQ liquidity is almost as good as Betfair's too, they have been around for a similar amount of time (trading since 2001) and are the only other major player in the sports betting exchange market.
In 2019 BETDAQ also introduced a fixed-odds sports book too, making it a more complete site for the typical bettor.
Betfair are probably the biggest and the best-known bookmaker that offer an exchange betting service. The company does have a traditional fixed odds sportsbook too, but it’s their exchange that has helped them to become one of the most popular bookies in the world for a certain type of punter.
The size of the company’s exchange means that there’s barely any event that you can’t Back or Lay on, depending on your desire. They even have in-play betting within the exchange. Typically speaking there is a £2 minimum bet on Betfair’s exchange. They company makes its money by taking a 5% commission from winning bets. It’s worth noting that the more you use their betting exchange the lower this percentage goes, so if you’re going to bet big you’ll almost certainly find that your commission rate drops down over time to up to 2% (sometimes even lower on request).
The other big bookie that offers an exchange that I think is worth mentioning is Ladrokes. This more traditional bookmaker has branched out into the exchange side of things in recent times and they’re reaping the benefits. It’s one of the ways in which they’ve modernised their operation to ensure that they’re still relevant in the betting industry, whilst other older bookies have maintained their more traditional roots.
Of the two I personally prefer Betfair’s system and style, but if you’ve never done any exchange betting before then it’s definitely worth checking Ladbrokes out. They offer plenty of markets and in the bigger games and races you’ll be able to Lay or Back pretty much anything. Much like with Betfair, Ladbrokes charge a 5% commission on winning bets that decreases the more often you place your exchange bets with them. You might also be tempted to have a look at Ladbrokes because their minimum bet is just £1. Perfect to have a go at it and see if it’s for you.