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How does a betting exchange work?

Until the early 2000s, the term sports betting exchange was unfamiliar for most bettors as until then, practically everybody used to bet on the traditional bookmakers. When Betfair appeared as the first exchange betting operator, punters worldwide discovered a brand new option. The theory is quite simple, as instead of playing against the house, you act as a bookie and compete with other players. While traditional bookmakers go head-to-head with bettors, betting exchange sites take no risk whatsoever since they charge a small commission for providing their services. So basically this platform where punters gather to place their bets works in a similar way to a stock market.

No matter if you are a professional or a recreational bettor, you may stick with us in this article as we will try to break down how the betting exchanges operate. This way we will give you a better perspective of the market, what are their advantages and disadvantages in comparison with the typical bookmakers and how you can trade via brokers.

 

What is a sports betting exchange?

A betting exchange offers you the opportunity to place a bet against other players on its platform instead of the bookmaker. You have two basic options: you can either back (buy) or lay (sell) a specific market. A back bet is when you wager on behalf of a selection to happen, while the lay bet is the exact opposite. You bet against a specific outcome thus operating like a bookmaker. If you are into trading, betting exchange platforms work like a stock market where you can trade at sports events in-play and gain profit or stop your losses.
At betting exchange sites, punters can set or offer odds from fellow bettors which actually provides more freedom of choice. This comes in contrast with the traditional bookmakers as they are not willing to risk their profit, meaning the odds or the stake amounts you are looking for. In exchange operators, you need to find someone else who is prepared to match your bet. Regular bookies have a certain margin which is their profit, however, betting exchanges operate otherwise. Since they don’t offer odds themselves, they make money by charging a commission every time a player wins a bet in their platform. The exchange betting commission varies from site to site, but, in general, it is between 2-5%.
Now, all these info may sound a bit perplexing to process, nonetheless you can see that in practice it’s not as difficult as it sounds. In betting exchanges you can still make a lot of money provided that you understand all types of wagers and evaluate when is the best time to buy or sell a bet.

The advantages of exchange betting

 

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Higher odds

By simply browsing through established bookmakers you can discover that their odds are significanty lower than a typical betting exchange. There are a few reasons behind that and the first one is that the exchange does not practically risk anything when players bet against each other. On the contrary, they gain much more profit when bettors wager more as the commission will be bigger as well. What’s more, bookies usually have a 7% – 10% vig in most common events whereas sports betting exchange sites rarely charge a commission that exceeds 5% so they have an allowance for better odds. Lastly, you can find even higher odds on outright bets where bookmakers try to reduce the risk of losing money and increase their margin.

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Multiple bets

Another major advantage of opting for betting exchange sites is the fact that you can place multiple bets and gain a better profit. Other forms of bets like single ones always result in lower returns. When you place an acca bet such as a treble, you can get a bigger amount than placing three single bets since your odds are multiplies. Apart from that in case you select to place a multiple bet on Betfair or a ‘’clone’’ site of Betfair, you’’ actually play against the site and not another player. The best part is that you can lay multiple bets as well as back them.

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Place your bets fast in Live betting

Is there anything better than betting on a live event and wait either to be settled and get paid or even better cash it out to gain sure profit. Well, if you are an old school bettor, you are certainly aware of the fact that live betting originally came from betting exchanges. The concept behind that is that bettors can back and lay bets simultaneously in-play by taking advantage of the volatility of a market to gain profit. If you think of trading, betting exchange sites operate this way we explained, as you can practically open and close a position by trading your bets. Typically the live section is always exquisite and you can largely benefited from that.

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Free bets and bonuses

The advantages of a sports betting exchange surely don’t end up there. We know that bonuses are critical when you are trying to find an operator and start wagering. Luckily, most betting exchanges have been offering all kind of bonuses these last years. These are usually free bets and moneybacks in case your bet is settled as lost. In the first mechanism you will get the free bet and place it in a single market of your choice. If your bet is settled as won, you will get the winnings minus the free bet amount. Talking about moneybacks, in case you deposit a certain amount and place a qualifying bet which is lost, you can receive the amount of your bet back as a reward.

 

Betting exchange sites and how to choose them

 

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Welcome Bonuses/Offers – Terms and Conditions for Bonuses

Perhaps one of the most important reasons to opt for a betting exchange is the sign-up bonus. Sure it is not that diverse as welcome offers in several bookmakers however it’s just as valuable if not more. Apart from that there are several other offers that you can redeem. Upon registration, you will typically be able to get either a matched bonus or a free bet. Bonuses terms and conditions are usually quite transparent as they don’t require a wagering in order to cash out your winnings. Normally, by the time you make your first deposit, you can claim your matched free bet or risk-free bet and whichever of the aforementioned you refeem, you can use it to back or lay a bet.

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Payment Methods / Withdrawal times

Before deciding to put your money at a sports betting exchange, you need to be sure that the deposit and withdrawal options are immense. They have absolutely no drawback compared to any other typical bookmaker. The popular and most-known payment methods are credit/debit cards, bank transfer, e-wallets and lately cryptos. More than often, bettors prefer e-wallets such as Skrill, Neteller, ecoPayz, MuchBetter etc) to bet under the radar due to the anonymity they come with as well as the low transaction fees. Added to that, by choosing to make your transactions via e-wallets, deposits are always instant and the same applies to withdrawals as you will receive your earned funds in less than 4-5 hours. On the other hand, if you think that a bank transfer or your debit card are a safer and most transparent way to complete any transaction, know that it will can take up to 5 business days tops.

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Quick Customer Support

Exchange betting can be quite tricky especially at first. Hence, it’s critical to choose an operator with a good customer support in order to get the best possible assistance from the beginning. Tips for making your selection way easier are the 24/7 support that is accompanied by instant features like live chat. That way, you will ensure that no matter what happens, you can always reach out to a representative and address any of your issues. Another benefit on your behalf, is to find a site with diversity in support which means that they can assist throughout different ways such as telephone, e-mail, social platforms like Viber, Skype, WhatsApp or come with a call-back service.

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Mobile Apps

There is no better feeling than accessing your favourite betting exchange from anywhere you want and place bets instantly. That being said, you need to find operators that offer a great mobile interface compatible with iOS and Android devices. The even greater part is when you bump into a dedicated betting exchange app created by the biggest players in the market. Normally their apps are tailored to your mobile phone and can give you an even greater experience. Thus, you will be able to start wagering with less than a few clicks on your favourite betting exchange.

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Commission

What all betting exchanges have in common is that they offer higher odds due to the way they operate compared to the typical bookies. Since they charge a commission for their services they normally stick to the basic market rates that vary. Most sites set a flat commission rate which is usually between 2%-5% on winnings to all punters. Instead, there are other operators like Betfair where the concept is quite different as the commission rates are in a way floating, starting from 5% and reaching to a low of 2%.

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Betting exchange liability

Bet liability refers to the amount of money you need and risk when you place a bet whether it’s backing or laying an outcome. By the time your bet is placed, your balance is reduced to the amount your liability was. This predefined amount is deducted from your balance as long as your bet is in-play. As a result, if your bet is settled as won, the exchange returns the liability amount to your balance and also gives you back the stake amount which is your winnings minus the commission.

How to use lay betting in football betting exchange?

blankWhen you are placing a lay bet at a betting exchange, you typically get in place of the bookmaker and offer odds for another bettor to wager and try to match your bet. It involves two counterparts and of course the sports betting exchange acts as a mediator that facilitates the betting in exchange for a predefined commission. The logic behind this type of betting is to wager against an odd to happen thus against another bettor who placed the opposite bet. For example in a football game where Man Utd are playing against Arsenal and you bet that Arsenal will not defeat Man Utd, your bet will be settled as won only if Arsenal loses the game. It is that simple!
As you can understand, there are many reasons why people prefer lay betting. Some find it easier to pick a team or a horse that won’t win, than one that will win. Some other bettors lay a bet as they think the price in this specific market is too short. Others will look to trade and gain a small profit by selecting the opposite market later in-play. It depends on how you wish to play at the end of the day. Nonetheless lay exchange betting doesn’t need to make you afraid as you are in full control of how much you want to risk and how much you can potentially win.

What is back betting in a betting exchange app?

blankBack betting at an exchange bettting is similar as placing a regular bet at a bookmaker. Your selection has to be a specific market that predicts the outcome of an event and deciding the stake. The only way to win your bet, is if your selection wins and only then you can gain profit. What differentiates back betting at a betting exchange from a bet at a regular bookie is that you don’t place it against the operator but against another player. The other player will have to bet on a different outcome of a betting event and match your bet.

The similarities of back betting and lay betting lie in the fact that you can trade whichever you select to start with and definitely the role of the sports betting exchange that remains intact. Meaning that it facilitates the bet and charges a predefined commission rate to winning bets.

Trading on a betting exchange: Does it worth?

blankWe might have introduced you to the concept that exchange betting works in a similar way to a stock market where you can back and lay bets at the same time and trade a bet for another of the opposite result / market. What you should consider as a simple method to gain profit or limit your losses is to always try and buy at a low price and sell at a higher one. An easy way to achieve this kind of prices is when you opt for outright bets at betting exchange sites. These usually have great odds at the beginning. After a significant period of time, you’ll realize that the odds of this market will most likely begin to increase or dicrease, hence, opening a window for a trade. Perhaps the best sports for these bet types are horse racing, golf and tennis due to their nature and big events that take place regularly.

A simple way to learn how to trade effectively at a sports betting exchange, is to know each time the price of your position as you may have to act instantly and sell it to avoid losses or gain profit. Keep track of your trading records in order to have all the details of history and process of your trades. The most vital part is knowledge of timing in order to hold a bet or sell it as it might not end up well and suffer losses. All in all, trading on a betting exchange can be more than profitable if you act with cautiousness and try to minimize your exposure.

Exchange betting vs. Sportsbooks

blankWe have already referred to a few areas where betting exchange sites and traditional bookmakers differ. Besides the concept of betting and the way they gain their profit, there are several other aspects to take into account. One significant difference between bookies and betting exchanges is the limits. Exchanges have way higher limits than sportsbooks. The same applies to their odds, too. Exchanges offer better odds due to their lack of margin as you’ll have to pay only a small commission on your winnings. The reason behind that is that the football betting exchange does not risk anything when punters bet against each other. Added to that, it is more than common to have your account limited or closed should you choose to bet at a typical bookmaker whereas that doesn’t happen at a betting exchange app where winners are largely accepted. The simpler way to understand that is the more you wager, the higher the commission will be. Lastly, at a betting exchange, crypto payments are way more regular than bookies so that you can benefit from the anonymity they offer.

On the contrary, you have no assurance that your bets will be matched. What you should also note is that the number of sports and markets in an exchange is considerably less than a bookmaker. Another advantage of bookies is that they offer their players in general better offers compared to betting exchanges. In conclusion, we feel that betting exchanges come on top as they offer better odds, higher limits and widely accept winners.

Betting exchange with crypto on Brokers

blankBetting exchange sites that accept cryptos on Brokers come with significant pros compared to having a single betting exchange account and we will analyze why. To begin with, a brokerage is an agency that offers you the option to open an account at multiple betting exchanges or bookmakers and benefit from it. That being said, you can gain access to many football betting exchange sites that would normally be unavailable in your country. In order to benefit from crypto transactions, retain your anonymity and lack of transaction fees all in once, simply open an account through a broker agency. They will set your account for you and you can then access numerous operators.

Added to that, you can have more than one options to put your money at. Hence, you can do a better evaluation as to which commissions are as low as 2% or reach up to the typical 5% that several operators offer. Other advantages comprise the circumvension of regular banks and the lack of extra fees as well as increased privacy and a low spreading risk. On the opposite side, the minimum deposits in brokers rarely fall below €50 meaning that if you are a recreational bettor and seek to wager smaller amounts, you will find it difficult to adapt. Even if all of the above sound a bit complicated, you don’t have to worry as with the proper research you can become an expert find a renowned betting exchange app or an operator through a broker and start wagering!

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