Betting Exchange

The great thing about gambling is that there is finally the technology to support mass betting. Exchanges have sprung up online, beginning in the year 2000, which allow the average punter to have access to more than just the limited book of his favourite sports agent. In the past, the neighbourhood bookmaker had to balance his book (his bets) with offsetting bets from others in the area. This was not always possible given the limited pool of risk takers, so some bets had to be turned away.

However, this all changed in 2000 with the advent of betting exchanges. The betting exchange is like a stock exchange, in that it matches two people with complimentary interests. However, in the bookmaking would, these complimentary interests are really offsetting bets. The net effect for the exchange operator is that it is as though the customers are betting directly against each other, a kind of peer-to-peer gambling.

This peer-to-peer gambling has the bookie in more of a brokers' role as they apply technology to the books. However, what really makes the betting exchanges tick is the opportunity for expanded liquidity and opportunity for matched bets. Global scale and round-the-clock operation mean that profit opportunities for punters are broader and more readily available.

Most online betting exchanges operate on decimal odds rather than fractional odds, and tend to favour fixed odds over the point spread betting that you can get off-track. The overhead is lower, although the online exchanges still charge a commission of their own. Lay bets are also more common in the online exchanges than in traditional bookmaking.

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One bonus for the gambler is the rise of two new ways to wager. The first is arbitrage, which is to bet on all permutations of the outcomes so that one is guaranteed to make a profit. Traders go in for betting with extra risk where no profit seems readily apparent, but hope to close out the bet later for more money. If the possible event doesn't happen the trader is not out any money. This second new way to wager is not as widespread as it requires a fast mover and a head for complexity.

Like all forms of sports gambling, the online betting exchanges face all sorts of accusations and controversy. Even some traditional bookmakers oppose them! Opportunities for corruption are seen to be greater as the bets are much more anonymous online, leaving some speculating that players and especially horse jockeys may be swaying the bets. However, this has not been substantiated.



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