What is a Betting Exchange and How does it Work?
With adverts appearing on TV and the Internet every day, it’s hard to ignore betting companies. You probably already know of bookies. You find a game, look at the odds and wager your money. Betting exchanges are slightly different and offer a unique way of gambling.
A betting exchange allows gamblers to set their own odds and bets. Using advanced matching software, the company connects the bettor with another punter whose views about the outcome of the same game are different.
How do Betting Exchanges Work?
Where a traditional betting site goes head-to-head with punters, exchanges leave players to bet against each other. The company then takes a commission from the winner, having taken no risks at all.
Let’s say I think the USA will beat Spain in basketball with an odd of 10/1. If I back the states with €10 and it wins, I get €100 in return. Learn more in this Betfair sports betting website review.
For my bet to be matched; there must be another player who believes the US will lose and is willing to match my bet. The player will risk €100 with the hopes of winning my €10 if the US loses.
Betting Exchange Terms
There are two words you must know if you want to succeed in exchange betting. Back a bet, which is to support a team, player or horse to win. The other is to lay a match, meaning you think a certain team, player or animal will lose in a competition. So, you wager for the losing side. Find great sites to gamble on at https://www.sportytrader.com/en/
Lay or Back and why?
When you lay for Ghana as it plays France, you win when the European side wins. On the downside, you take more responsibility with the amount gambled. In a game of odds 10/1, the laying bettor risks $10 if the backing player places $1.
Why back a losing game when you can place a bet on the winning club? Many exchanges will award the laying bet the money if the match ends up in a draw and if their prediction was correct. So, if Ghana loses against France, you win. If the match ends in a draw, you get the money as well.
Backing a bet is best done when you’re confident a team will win. If it does; you win much more than you wagered. Supporting a win for France with $10 on odds 10/1, you end up with $100 if your prediction is correct.
Betting for the winner is also a great way to gamble if your style of betting is one where you place small wagers hoping for maximum profits. Your only goal is to research on suitable matches where the odds of the team or player winning are high.
Like many conventional betting sites, exchanges also support live-bets. The odds never stop changing and punters back and lay odds to the last whistle. You can bet as many times as possible. And contrary to bookie sites, there will always be a bet in your favor.
Bookies will shorten Man City’s odds if it’s up 2-0 against Liverpool by halftime. Sometimes the odds will go down so much that placing any bet for the Manchester-based team will amount to pennies as profits.
With exchanges, City’s odds to lose the match may narrow. But you could place a draw bet which may have better odds. With Man City’s chances of winning increasing, gamblers will place high amounts of money to support the team. If you can match a lay bet predicting for a draw, you win more.
Backing High, Laying Low
One of the best features of an exchange is that you can attempt to salvage your losing bets. So, you thought Brazil would win before the match against Chile? The match is half-time and Chile is up by 2-1 goals.
What do you do? Lay a low bet on Brazil. Assuming you had placed a €20 win for Brazil on odds 1.0 against 4.0. Your €20 would have produced €80 if anyone matched your prediction. With no hopes for Brazil, lay a bet where the odds of Brazil losing will earn you a profit and your earlier betting amount back.
There is a high chance the match could end in a draw. In that case, you also win. The fact that odds keep on changing makes it even easier to recover your money. There are no guarantees, but it becomes possible as you gain experience betting.
Why Bet on Exchanges?
Great Value for Money
Players set the odds and determine the amounts they want to win. If you can match the wager, you are in for a chance to win big. On traditional sites, bookies shorten their odds based on players’ and teams’ statistics.
They can short odds of 1.5 into 1.1 within minutes. If betting €10 would have resulted in €15, you now can only win €11. Exchanges provide better value because players are always wagering with decent amounts.
Someone will back Barcelona with €20 even if it’s losing 2-1 against a stiff competitor like Real Madrid 10 minutes to the game. If you believe the match could end in a draw, laying the bet when the odds are small offers more value for you.
As we had earlier discussed, you can lay a bet you had earlier on backed. Bookies may allow you to place a second bet, but it’s hard to recover your loss. Their odds change too drastically to disadvantage you.
With exchanges, the rules are different. The company gets a commission no matter what. As such, no one interferes with your odds. If you change your mind, you simply look for favorable odds. When you lay on the bet, you get your earlier investment back and maybe some extra profits.
A betting exchange and a bookie site are two different platforms. While a bookie gives you the odds, exchanges lets players bet against one another. Exchanges are, therefore, mediators. They profit by cutting commissions from the winning bet.