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Exchange Betting
Contents
Exchange Betting has long been the gambling industry's worst-kept secret, with many players stepping away from traditional "fixed odds" markets and betting against other like-minded players, with the benefit of better odds available.
Here, we look at how Exchange Betting works, how to make bets and the best exchange available to UK players.
Betting exchange sites
| Rank | Bookmaker | Bonus | Turnover | Min odds | ||
|---|---|---|---|---|---|---|
| 18+ | begambleaware | Please Gamble Responsibly | Commercial Content | T&Cs Apply | ||||||
| 1 |
 Betfair | Bet £5 Get £20 in Free Bets | Turnover: No requirements | Lowest odds: 1/2 (1.50) | Claim Go to website | New Customer offer. Place a min £5 bet on the Sportsbook on odds of min 1/2 (1.5), get £20 in Free Bets. Rewards valid for 30 days. SMS verification required. Only deposits via cards will qualify. T&Cs apply. Please Gamble Responsibly |
| 2 |
 Smarkets | 0% Commission or £20 Cash | Turnover: No requirements | Lowest odds: | Claim Go to website | Use code COMMFREE to trade with 0% commission for 60 days. New UK, IE & Malta users only. Min. £10/€10 first deposit using card or online banking. Full T&Cs apply. 18+. BeGambleAware.org |
Betting Exchanges - FAQ
Why Do People Use Betting Exchanges?
The biggest reason people choose betting exchanges over sportsbooks is better odds.
Due to fixed odds markets having to incorporate profit margins, pricing is usually lower than that on the exchange, as the exchange uses commission charges to make its money, thus passing on better odds to players.
Players can also determine their odds when lay betting, with the potential for larger odds to be available, if a bet is matched.
How Do Betting Exchanges Make Money?
Betting exchanges make their money through commissions based on net profits.
Once a bet has been settled, any profits a player makes will be "taxed" so to speak, with anywhere between 2% - 5% taken from those profits.
What Is A Back Bet?
A back bet is the same as a regular fixed odds bet, where you stake an amount of an outcome to happen like a team winning a match and so on.
If you win, you will be paid out at the agreed odds and if you lose, you will simply lose your stake.
What Is A Lay Bet?
A lay bet is where you bet on the outcome to NOT happen.
This sees players in effect become the bookmakers, betting against the backers who believe a result or outcome will happen.
If you placed a lay bet of £10 at 1.5 odds and the outcome came in your favour, you would take home £5 profit and receive your £10 stake back. However, if the outcome was in favour of the opposing player (the backer), you would be liable for the loss, which at 1.5 would be £5 for a matched £10 bet.
Who Has The Best Commission Rates?
Of the five betting exchanges mentioned on this page, the following commission rates are available, which apply to all net profits on the relevant exchange service.
Smarkets - 2%
Betfair - 5% (Reduced to 2% on registration with Betfair Rewards)
BetDaq - 2%
Matchbook - 2%
What Betting Markets Are Available At Exchanges?
Despite the differences in making bets, the overall options available are the same as regular sportsbook betting, with the same popular markets for football, horse racing, tennis and more.
Players can also bet in-play too.
What is The Best Betting Exchange?
Arguably the best betting exchange is at Betfair, home to a plethora of sports markets and home to thousands of like-minded players which is great for finding matches to potential bets.
Smarkets also deserves a huge mention, thanks to its modern design and range of markets too, although it doesn't quite hit the same mark, when it comes to odds.
Can I Get A Welcome Bonus At Betting Exchanges?
Yes, because most sites have both sportsbook and exchange markets available, players can pick up a welcome bonus when signing up as a new customer.
Betfair offers a straightforward bet & get promotion for sportsbook betting, while SpreadEx offers a similar option for new customers, with free bets on both the sportsbook and exchange.
And finally, Smarkets offer an excellent 0% commission for 60 days to new customers, to potentially maximise profits.
What Is Exchange Betting?
Exchange betting, in essence, allows players to bet on the outcome of individual events against fellow players, instead of against the bookmaker.
Unlike traditional fixed odds markets, where pricing rarely changes, exchange betting odds are affected heavily by how players have bet, so generally, players can expect better pricing on the exchange than on a standard sportsbook.
Players can bet on the event to either happen (back betting) or not happen (lay betting), which is the fundamental difference from regular sportsbook markets.
Exchanges regularly offer better odds than traditional sportsbooks, thanks to a commission-based service.
Sportsbooks make their money from the "overround", which creates a profit margin based on odds offered per market. However, with the exchange, this is not feasible, so a commission is charged on net profits per bet, maintaining their ability to profit, while keeping pricing and odds favourable for players.
After years of being seen as something for experts or players with large bankrolls, today's digital age has made exchange betting accessible to all. A handful of exchanges exist in the UK, with Betfair Betting Exchange leading the way, thanks to its hosting of one of the largest markets out there, plus low commission rates.
However, players do have options, with the likes of Smarkets, Betdaq and Matchbook also providing excellent services. If you are looking to bet on an exchange, chances are you will find a great service across any of these options.
Backing An Outcome
The betting exchange works by allowing you - as the player - to back or lay a bet, meaning you can act as the bookmaker or as a player.
Backing an outcome means that you believe the bet will win. You play with odds that another player has laid and for an amount that the seller of those odds has decided upon. You act as the player and buy the odds from a seller who is acting as the bookmaker.
Example of Backing An Outcome:
Backing an outcome is extremely straightforward and similar to fixed odds markets in terms of risk. Say, for instance, Tottenham are playing Chelsea and you believe that Tottenham will win the match.
In this instance, you will "back" the Tottenham Draw No Bet market at 1.75 for £100.
This will then be matched against a player who is "laying" the bet, wanting Chelsea to win.
If Tottenham wins, your bet is completed and you collect a total profit of £75,
if the bet ends in a draw, then both bets are "pushed" and returned to each party. This is because it is a Draw No Bet market.
If Chelsea wins, then your bet loses and you pay £100 to the person who matched the bet.
Placing An Offer:
A further option available to "backers" is placing an offer. Rather than taking the available price shown, players can offer a bet at a higher price, however, this bet is reliant on another player willing to lay the bet in return and will be marked as "unmatched" until this happens.
This offers players the chance to win larger sums on a confident bet selection, but of course, on the flip side can lead to larger losses.
Laying An Outcome
Laying bets is very different to backing, as you are ultimately acting as a bookmaker for others to bet against.
To lay a bet, you have to believe that a specific outcome is going to fail. You set the odds and the amount required on the selection and wait for players to back those odds. Should no one play on the odds you laid, the bet is annulled and you get your money back.
Example of Laying A Bet:
Using the same Tottenham vs Chelsea example, rather than back Tottenham to win, you can instead Lay the Tottenham win market, or in other words back against that outcome happening.
In this instance, you will "lay" the Tottenham Draw No Bet market at 1.71 for £100.
If the bet is matched and Tottenham fail to win the game, you would win £171 at the odds of 1.71.
Lay betting gives players the chance to act as bookmaker and reap the benefits of betting against an outcome.
However, if the bet is matched and you lose, you are liable for the payout to the winning player, which in this case would be £71.
When lay betting, players can make losses, so it is also important to calculate potential losses on bets. Thankfully, sites such as Betfair show those totals before placing the lay bet.
Laying bets is not without risk, but thankfully sites like the Betfair Exchange display potential losses before placing a bet.
Commission And How It Works
Usually, when betting on fixed odds markets, bookmakers will incorporate their "profit margin" into the odds available to players. However, with betting exchanges acting as a peer-to-peer service, where players set the odds available themselves, the exchange makes its money from commission instead.
Charging commission has its advantages, with the obvious benefit, being that odds are generally higher than they are on the regular sportsbook market, due to players themselves offering up odds to other like-minded players.
The commission is transparent and only applied to net profits in general, with most potential payouts displayed accordingly, so players know exactly what they will receive if making a winning bet.
Commission ranges from 2-5%, although SpreadEx does things a little differently, by not charging commission at all on their sports exchange.
It is also good practice to look out for promotions and sign-up offers, such as Smarkets below, which offers 0% commission for a set period of time.
Sites like Smarkets, will offer new players 0% commission for a set period of time, when joining.
Markets Available On Betting Exchanges
Although there is a fundamental difference between fixed odds and exchange betting as a whole, the majority of sporting markets available are the same.
Players can bet on many sports from staples such as football, horse racing and cricket, through to darts, snooker and tennis.
The markets themselves are the same too, with outrights, under/over, goalscorer, win, each-way and more available.
Betfair Exchange offers a plethora of sporting markets to players.
Using Betting Exchanges: Pros And Cons
PROS:
There are several advantages to betting using an exchange format. Firstly, you can find significantly better odds in a betting exchange compared to traditional betting formats.
You can act as the bookmaker instead of betting on outcomes and you are unlikely to be restricted if successful, which is common amongst betting companies and bookmaker sites.
- The opportunity to get better odds than what normal betting companies offer.
- The opportunity to be the bookmaker by laying a bet.
- No risk of being restricted - On the contrary, in fact, you are rewarded for betting higher sums with lower fees with a betting exchange.
CONS:
As we mentioned earlier, the betting exchanges take a commission as a fee for having acted as the middle-man in your back or lay of a bet. This commission varies in size (2-5%) but it means that you must have a profit margin that is higher than the fee taken to be a winning player/bookmaker in the long term.
In addition, it may be difficult to match your laid bet or backing in smaller markets. If you are active in markets such as the Premier League, you will have no problem with this. But should you lay odds in a lower division, then it may be harder to find players who will want to buy your odds with a large requirement.
The same thing applies if you want to bet in a smaller market, it can be hard to find a person who has laid your bet with realistic odds and requirements. However, as the betting exchange grows, the selection does too.
Lastly, it can be easy to make large losses on lay bets. Although exchanges do an excellent job of keeping players informed about the exact amounts at risk, these losses can easily mount up.
- Commission fees from the betting companies
- Harder to match bets in smaller markets
- Easy to lose large amounts if not careful
Recommended Betting Exchange
Betfair Exchange
Bet £5 Get £20 in Free Bets
Betfair Exchange is easily the most popular exchange available, offering a huge array of markets and plenty of players to bet against too.
The exchange covers every conceivable sport and the market commission starts at 5%, although can be lowered to 2% when registering with Betfair Rewards.
Betting News
Betting Offers
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