A Betting Exchange is a site where you can anonymously exchange sports bets with other bettors.
On a Betting Exchange, you can intervene in two ways:
- You can place a classic bet in the same way as you do a bookmaker. You can bet, for example, on the victory of a tennis player. This involves buying a bet (“back” in English). If the player loses, you lose the amount you bet. If he wins, you win the bet amount multiplied by the quota.
- You can also bet against a result. This is the great innovation of the Exchanges of bets. You can propose bets and ratios to other players and play bookmakers! If you think that Fernando Alonso will not win the next Formula 1 Grand Prix, you can sell (“lay” in English) Fernando Alonso. You will only not win this bet if Fernando Alonso wins the Grand Prix.
An example of a betting exchange
Boavista Football Game – Penafiel
You think that Penafiel will not beat Boavista and you propose Penafiel’s victory in the betting exchange with a quota of 7 for an amount of 100 euros.
Another player, a member of Penafiel, bets 100 euros on his favorite club with a quota of 7.
The exchange of bets is thus carried out.
If the game ends with Boavista’s victory or with a draw, the Penafiel member loses the amount of the bet that you win (apart from the commission received by the Exchange of bets).
If the game ends with a Penafiel victory, the partner wins the bet. He receives his win (minus the commission) which is withdrawn from his account.
Result – You Penafiel’s partner
- Victory of Boavista
Tie Profit = 100 euros – commission Loss = 100 euros - Penafiel Victory
(7 share) Loss = 100 * (7-1) = EUR 600 Profit = 100 * (7-1) = EUR 600 – commission
You will find a wide variety of bets on the Exchanges and can bet on a variety of sports.
Betting Exchanges: Advantages and Disadvantages
The main advantage of Betting Exchanges: the odds are better than those advertised by bookmakers. Why is this? Because the bookmakers take a margin from the bets that they propose what does not happen in the Exchanges of bets. The exchange of bets subtracts a commission in the order of 5% of the net amount won from the winner of the bet. It is on average 5% less than the margin withdrawn by the bookmakers, which is about 10%.
Thanks to the bookmakers, you can also bet against the prediction of an event.
The main drawbacks of Betting Exchanges: you can only bet if other bettors are interested in betting with you. This is not always the case, especially in less media sports. Another disadvantage: the notion and placing of bets is much more complicated than in a traditional bookmaker.
Another disadvantage of betting exchanges: it is impossible to place combined bets.
How to place a bet on the exchange of bets?
Example: The Champions League match between Liverpool and Lyon at Betfair (the most important betting exchange).
The numbers in bold correspond to the quotas and the numbers below correspond to the amounts available for these quotas.
The blue part to the left of the table corresponds to the purchase of bets (Back) and the purple part to the right of the table corresponds to the sale of bets (Lay). We see the possibility of betting the maximum amount of 2829 euros on the draw with the quota 3.55, and then 3489 euros on a quota of 3.50. It is also possible to sell Liverpool for 1360 euros with a share of 1.92.
Imagine you decide to bet against Liverpool. You must click on the purple cell of Liverpool (Lay). A window will appear to place the bet on the right of the screen. You must choose the amount you want to bet. To simplify, let’s say you decide to bet 10 euros with available sales quota (1.92). If Liverpool wins, you lose EUR 9.20 ( (1.92-1)*10). If Liverpool does not win (= tie or lose), you win 10 euros.
You can also decide to buy with a higher share or sell for a lower share. To do this, modify the quota in the cell where 1.92 is written. In this case, your bet will be accepted as soon as a player accepts the opposite commitment. If you are too demanding on your share, you run the risk that your bet will not be accepted by another bettor.