Any experienced bettor will be aware that Betfair Exchange can offer them some of the best possible odds on the market. Today, despite the number of betting sites available, there are relatively few that offer a betting exchange. This is probably because Betfair is really dominating the market and to some extent enjoys a monopoly when it comes to betting exchanges. Betfair’s exchange is by far the broadest and easiest to use out of all the betting exchanges available.
About Betfair Exchange
Betfair Exchange was created around the turn of the millennium by two British entrepreneurs Andrew Black and Edward Wray. Andrew Black was the person who came up with the idea after his interest in betting and the financial markets gave him the idea of a free market for betting. Andrew Black is the son of British politician Cyril Black who ironically was firmly against any form of betting. Andrew Black did not let his father’s views affect him and in 2000 he opened the gates for Betfair Exchange. The exchange became a huge success within the betting world, attracting bettors from all around the globe.
Today, Betfair is one of the world’s leading betting sites and to a great extent, it has its exchange to thank for this. With Betfair Exchange, there are always very experienced bettors but there also new punters who are looking for the market’s highest odds.
Cricket is one of the most popular sports to bet on using the Betfair Exchange
What is an exchange and how does it work?
At Betfair Exchange, you play against other players and not the betting site. The market steers itself and all that Betfair does is to act as a middleman, holding onto the money until the bet is settled. This means that you are betting on odds that have been set by other punters, just as you can set your own odds that they can bet on.
The majority of betting sites earn money by setting odds with a lower probability of occurring than what is correct. They balance the odds by pushing them up or down in order to increase the money they receive against the odds for both sides of a match. By doing this betting companies can avoid making a loss, regardless of the outcome, because the odds do not correspond to the correct likelihood. With Betfair Exchange, you can always receive market-leading odds because the betting site does not affect the odds in order to make money. Punters bet against each other and when there is a loss, it is the punter that loses and not Betfair.
How do you bet using Betfair Exchange?
As a beginner, Betfair Exchange can appear a little awkward but the fact is that its very simple and very similar to normal betting. If you use Betfair Exchange you have three alternatives to choose between.
- Backing a bet - If you want to bet on a team to win then you should press the blue button. This means exactly the same thing as placing a bet on a normal bet for profit against a betting site, the only thing that is different is that you will get better odds with Betfair Exchange.
With Betfair Exchange, you can "back" an outcome.
- Laying a bet - The opposite of backing a bet is to ‘lay’ which means that you are betting on a team losing the match. This means that you must click on the red button. At this stage, you will be acting as the betting site and will receive bets from punters who want to back the team. You will win if the team you lay your bet against does not win their match.
You can also "lay" an outcome.
- If you are not satisfied with the odds which are on offer you can set your own odds and let other punters bet against you. For example, you can set odds of 1/1 that Arsenal will not beat Chelsea with a bet of £100. Then you can wait to see if someone else in the Betting Exchange will play against your odds of 1/1 for £100.
Betfair Exchange fees/commission
Because Betfair does not alter the odds and lets punters bet against each other, Betfair does not earn money on how the odds are set, which is the case with other betting sites. However, in order for Betfair to be able to earn money the betting site takes a so-called commission for the net profit earned within the betting exchange.
For all new customers with Betfair, this means a 5% standard fee with Betfair Exchange. This can decrease if you are an active bettor with Betfair Exchange. The more you play, the lower the fee will be. The exact requirements for how to reduce this commission can be best found on Betfair’s website. It is important to note though that Betfair’s commission is only applicable for winning bets and you do not need to pay a fee for your wager or lost bets.
Betfair Exchange cash out
Today cash-out is a well-known function that many betting sites use. What a lot of people don’t know though is that we have Betfair to thank for this function, as it was the first to introduce it. Cash Out gives you the opportunity to secure a win or minimize your losses without having to wait for the match to end.
Betfair is still the market leader when it comes to the Cash Out function and at Betfair Exchange, you can easily see how much your live bet is worth and to sell it at the value you want. To be able to use Cash Out you just need to press the yellow button and adjust how much of you bet you would like to sell off.
An example of Cash Out using the Betfair Exchange
If for example, you have bet £100 on an Arsenal win at 1/1 before the match start and Arsenal quickly take a 2-0 lead then you could potentially be able to sell your odds at 1/5. This means that if Arsenal wins, you will get £80 in profit. This means that if Arsenal goes on to lose their lead, then you have made a smart move, and you have not risked losing your money.
Advantages and disadvantages with Betfair Exchange
Advantages with Betfair Exchange
The advantages of betting using Betfair Exchange versus normal betting sites are numerous. As we have mentioned, you will receive much higher odds than at normal betting sites. This is due to the fact that you are playing against other players and not the betting site. This means that Betfair does not have to worry about losing money and does not need to reduce the odds in order to make money. With Betfair Exchange, you will always find the market’s best odds.
If you are not satisfied with the odds offered on the exchange you can even set your own odds and act as the betting site yourself. This gives you, as the player, a fantastic opportunity and something that is not available with normal betting sites. Last, but not least, you can place large bets with Betfair Exchange without limitations.
Disadvantages with Betfair Exchange
There are disadvantages with Betfair Exchange that you should be made aware of. One of them is that Betfair takes 5% as a fee from all net profits earned using the exchange. The fee, or commission as it is called, is only taken from winning bets and not from your lost bets. Betting on smaller markets can also be problematic when it comes to the Betfair Exchange. In order to be able to bet using the Betfair Exchange, you need another punter to bet against you. So if for example, you want to bet on a football match in a lower division then it can be difficult to find someone to match your bet and wager against you. You can avoid this problem by using normal betting sites.
FAQ Betfair Exchange
What does it mean to back a bet with Betfair Exchange?
To ‘back’ a bet means that you are betting on a team or player to win a match. If for example, you are backing Manchester United to win the upcoming Premier League season it means you are betting them on to win the league. Your bet will be up against someone who thinks they will not win the league.
What does it mean to lay a bet with Betfair Exchange?
To ‘lay’ a bet is the opposite of backing a bet, which means that you are betting that a team or player will not win. You can for example lay a bet on Manchester United to win the league, this means that you think they will not win the league. This is the same for individual matches, if you lay a bet on Chelsea to win, then you will win the bet if they lose or draw the match. Should Chelsea win the match then you lose your bet.
What does Cash Out mean with Betfair Exchange?
Cash out is a function which many betting sites use today. Betfair Exchange was the first site with this function. What separates Betfair’s cash out function with other sites is that you can chose how much of the bet you wish to close. With Betfair Exchange you have full control over your bet and can choose to secure your win or minimize your loss, before the match is over with the Cash Out function.
Is there any commission or fee with Betfair Exchange?
Because Betfair does not earn money on how the odds are set, the betting site takes a small fee or commission for acting as the middleman in the process. The only thing Betfair really does is hold onto the money till the bet is settled and let the market steer the odds. Betfair takes a standard fee of 5% of all winning bets in the exchange. This fee can be reduced if you are an active customer with the Betfair Exchange. Please note that this fee is only charged to winning bets. Betfair never charges a fee for your original wager or lost bets.
Can you use Betfair Exchange with your mobile?
Betfair Exchange service works really well on a mobile. You can choose to play from a mobile-optimized website which has borders adapted for both mobiles and tablets. For an even smoother access to Betfair exchange, you can download the app which is available for both iPhone and Android devices.