A Guide to Betting Exchanges
A different way to bet, betting exchanges bring together two individual bettors whose wagers are then ‘matched’ together.
There are two types of bet courtesy of a betting exchange: a ‘back’ and a ‘lay’. The backer is betting in the normal way on a specific event, e.g. Novak Djokovic to win Wimbledon. The layer takes on the role of the bookmaker and takes the backer’s bet, so they become responsible for it. Should the backer’s selection come in, then the layer will need to pay out the full amount owed. If the backer’s bet is unsuccessful, then the layer takes their stake.
Popular examples of betting exchanges include Betfair’s platform, Matchbook, Smarkets and Betdaq.
Advantages of Betting Exchanges (Backer)
The great thing about betting exchanges for backers is that they are able to access the very best odds around. Because the prices are set independently by the layer, backers can access prices that aren’t modified by the bookmakers’ need to maintain a profit margin.
Winning bets require a small commission to be paid, but all in all this is the most lucrative way to bet.
A great option for backers is ‘back-to-lay’, which enables them to lock in profit regardless of how their original wager goes. So, let’s say you’ve had 10€ on Andy Murray to win Wimbledon at odds of 5/1; your potential profit is 50€.
Fast forward a few weeks and Murray has reached the Wimbledon final, where he will take on Djokovic. You can now lay Murray at 2/1 for 10€, so that no matter the outcome you are a winner! Should the Scot triumph you’d take home 30€ (the 50€ winnings minus the 20€ ‘lay payout’), and if Djokovic wins then you’ve broken even as your initial stake of 10€ is covered by your lay winnings.
Advantages of Betting Exchanges (Layer)
There is one obvious advantage of ‘laying’; you can take on the role of bookmaker, and as we know they are very rarely short of cash!
Of course, you will have to pay out on any lay bets that actually come in, and that may require a large bankroll to cover any losses.
But if you fancy a certain tennis player/team to win, then one strategy to employ is backing them outright and then laying the other main contenders. In this way, you can cover your original stake AND take home the bacon.