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Differences between betting exchange sites and traditional Bookmakers

Betting exchange sites are quite diverse comparing to traditional sportsbooks and in this article we will explore that difference and help you find out which one is the better option for you.

What is a Betting Exchange sites?

Betting exchange sites allow punters to place bets against other players by adding lay betting, which we will also explain in this article, as well as modify the odds. The betting exchange platform acts as an intermediary between the bettors and charges a commission fee on the net winning bets.

How do betting exchange sites work?

As we said, with betting exchanges the players bet directly against one another and not a bookmaker. How does this process go? A player chooses a type of bet and they place it on the odds they want and then they wait for another player to match their bet. For a bet to be matched, another bettor must place the different type of bet at the opposite odds. If no bettor is found to place the opposing bet, then the bet is not matched and the wager is refunded.

Therefore, there are two types of punters involved anytime a bet is placed on a betting exchange.

First is the player that wagers the “back” bet. To back a bet is the exact same thing as placing a bet with any regular bookmaker. The players pick an outcome, they “back” it, they support it and they place their stake.

Second is the player that wagers the “lay” bet. This type of bettor is the most important on any betting exchange. The “layer” basically bets against the outcome that the “backer” supports.

Lets illustrate an example to have a clearer view on what is “backing” and “laying”.

We will take a soccer match between Real Madrid and Barcelona. A player supports that Barcelona will win this game and they choose to “back” it and place their stake. But, on a betting exchange, they have another option. Rather than simply placing a wager on Barcelona to win, they can also “lay” a bet on Real Madrid not to win. If these bets are matched by another player on the exchange then the bet is on, if not, then the bet is refunded.

Betting exchanges sites
Betting exchanges sites

What is a “lay” bet?

In our Real Madrid vs Barcelona example, let’s take a player who thinks that Real Madrid will not win in this game.

First, they have to find this soccer match on the betting exchange. Then, they will see under each outcome two colored columns showing decimal odds, one blue for backing and a red one for laying.

Since our player believes that something will not happen in this specific game, then they need to place a “lay” bet.

To lay a bet on Real Madrid not to win the game, the player needs to select the pink column for Real Madrid. Once they click on it, they will be requested to place their stake and they place 10$.

Now it is vital that is understood what this stake means.

If the player is the bookmaker in this example, this 10$ stake is the amount they are willing to accept as a bet in the case that the outcome is in their favor. The player believes that Real Madrid will not win the game and is willing to wager 10$ on it. If Barcelona wins or if the match ends in a draw, the player will win this 10$ stake and they will have gained 10$.

In the lay role as the bookmaker, however, if Real Madrid wins the game, the player is LIABLE to pay out winnings.

Let’s say that the decimal odds for the player’s lay bet were 3.0. In this case, the player would be responsible for paying out the back bettor’s 20$ profit.

This sum is known as LIABILITY and is a very important factor in betting on betting exchange sites.

Anytime a player selects the stake they are willing to accept, their liability will also be shown. Because of the liability factor, the players can only accept stakes their account is able to cover their liability.

Can a player lay a bet at odds away from the main market?

Depending on the betting exchange, it is often possible, but it is not always the case.

If a lay bettor wants to make sure their bet is matched, then it is advised either to accept the odds market value or to closely modify them.

So if a player wants to lay a bet on Real Madrid not to win the game, they need to pick the red column for Real Madrid, accept the odds or slightly modify them, place their 10$ stake and wait for a back bettor to match their bet. The liability for the lay player will be 20$. If Real Madrid does not win the game (If Barcelona wins or the match ends in a draw), this liability that the lay bettor was willing to accept will bring them 10$ profit. If Real Madrid wins the game, however, the lay bettor would have to pay out 20$.

What are the Advantages of betting exchange sites?

As it is easily understood form the above, a main reason why choose a betting exchange over a regular bookmaker it this unique feature of lay bets.

Another perk is that, since betting exchanges do not take part on the bets, the odds are usually better than those offered by any regular bookmaker.

A real plus from the betting exchange sites is that is usually easier to place large bets regular bookies would often not accept due to the liquidity of markets. As a result, betting exchanges are very attractive to high rollers and professional players.

Are there any drawbacks to using betting exchange sites?

Some players choose bookmakers over betting exchanges for a number of reasons. They might find the back and lay concept somewhat complex. They might also want to avoid the risk of not finding another player to match their bet.

The markets offered by betting exchanges are usually fewer than those would be found on the traditional bookmakers.

For accumulator punters, it would be easier to place bets with multiple legs with a traditional sportsbook.

Betting exchanges sites
Betting exchanges sites

What betting exchange sites are there?

The undisputed market leading betting exchange is Betfair. Being the oldest and biggest exchange, it was the first to introduce the concept to the industry and it has being leading ever since the betting exchanges market.

Betfair offers the highest liquidity, one of the most important factors for punters, because with a highly liquid exchange a bettor is easy to find other players to match their bet however large or odd they might be.

As Betfair is not offered in every country of the world, there are betfair alternative exchange options to cover this gap, most popular of which being the Orbit Exchange betting exchange.

Another betting exchange gaining ground in the market is BetDAQ. Although it does not offer the liquidity Betfair does, it is a reliable platform for its clients, as they offer online security and experienced support.

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Some betting exchanges do not grand direct access to players and in order to register they need to find a betting broker or agent. Betting brokers act as the intermediary between the players and the exchange platforms, they open and manage the players’ accounts, they provide access to the betting exchanges, and they offer customer support. In exchange for their services, they charge commission fees on winning bets or transactions fees. So, simply put, via a betting broker, the betting process is performed on the exchange platform, but the deposits and withdrawals are done via the broker.

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