Bet Exchange

Trading at Betting Exchanges

A betting exchange is a peer to peer gambling website acting as a broker between parties for the placement of bets. Most betting on a betting exchange is a form of fixed odds gambling.

Betfair embraced a pure exchange model – one later adopted and even improved upon in places – but first-mover advantage proved decisive for Betfair. Post merger, Flutter’s customers were transferred to Betfair’s system, which was later upgraded to embrace some of Flutter’s functionality. Betfair went from strength to strength and controls a reported 90% of global exchange activity today. As with other types of exchanges, betting exchanges thrive on liquidity and customers tend to focus on the exchange where they are confident their bet can be paired up with a matching counter bet.

Moreover, the odds available on a betting exchange are usually better than those offered by bookmakers in spite of the commission charged.

Exchanges have their limitations. Exchanges are not suited to unrestricted multiple parlay betting. Unsurprisingly, Betfair’s success has attracted a number of rivals.

Exchanges also offer the opportunity to lay outcomes, which is to bet that a particular participant in an event will lose. If the team loses, the layer/bookmaker keeps the backer’s stake. If the team wins, the layer will pay the backer winnings based on the odds agreed.

As every bet transacted requires a backer and a layer, and the betting exchange is not a party to the bets transacted on it, any betting exchange requires both backers and layers. Laying the home team is the same as backing the visiting team to win or draw.