A betting exchange is based around a piece of software which is, in essence, very similar to the software used to calculate the stocks and share prices. Over the years the software has been refined to incorporate almost every conceivable bet and outcome and as such offers the punter a degree of flexibility and freedom in their betting that had not been available previously.
When a new customer signs in with a betting exchange they deposit an initial sum of money into their account which is their money to bet with. Unlike a traditional bookmaker where a punter makes a bet with the bookmaker, the betting exchange works by connecting a gambler with another gambler who has opposing views of the same event.
A bet is only accepted if it is “matched” by another customer having that opposing view and willing to make that bet. Once a bet is made, the software searches through the markets for a customer willing to accept the bet you have made. If a match is found, then the bet is made anonymously. The punter is not betting against the bookmaker, but against another punter who simply believes that the outcome of the sporting event will be different.
In addition to backing a horse or team to win, customers can also lay a horse or team to lose and accept bets on this from other punters. If the horse or team wins then they have to pay the victorious punters what they are owed from their account, however if the horse or team does not win, then the punter who laid the bet will keep the stakes laid on it, in the same way that a bookmaker keeps the stakes of all losing bets.
Betting exchanges are free markets and punters are allowed to select the odds and prices which allows great scope to offer far better value in terms of prices as you would find at a bookmakers. The odds are generally shown as decimals, although options are available on site to allow punters to view the odds in fractions if preferred. Companies who run betting exchanges, such as Betfair, make their money from taking a commission of between 2% and 5% on all winning bets.
To summarise, a betting exchange works by linking gamblers who are willing to bet their money on possible outcomes of the same sporting event.
The software used not only helps find the best odds available, but links gamblers together to create the market and match bets together.
It then automates the payments between gamblers to ensure that all payments are made on time. The exchanges are flexible, fun and for some, highly profitable.
Advantages with betting on a Betting Exchange
A traditional gambler, or a novice, may well wonder what are the specific advantages to betting on a betting exchange, that a traditional bookmaker may not be able to offer? The truth is that there are a great many advantages to betting on a betting exchange over a traditional bookmaker and outlined below are just a few;
Better Odds : One of the most recognisable advantages on a betting exchange is that they tend to offer better odds than you will find with any bookmaker. On average, research has shown that a punter can receive 15% better odds in their favour using an online betting exchange such as Betfair and better odds mean more for your money!
Total Flexibility : Not only can you back a selection, but you can also lay a selection, backing against the selection winning the bet. You can shop around the exchanges to find a market that you feel offers you the best value for money or you can set up your own exchange and set the odds you feel are right to attract punters to take the odds you are offering! You are only limited by how much you have in your account to cover these bets should they win!
Anonymity : Betting exchanges guarantee all their customers, whether they are backing or laying bets, complete anonymity so all customers never know the identity of the person they are backing or laying against.
Live Betting : Not only can you now bet on horse races, soccer matches etc before they start, with the advent of live betting, it is now possible to back and lay bets during an event in response to the events happening live! This new and lucrative market for betting has really taken off over the past few years and much of that is down to the success of this form of betting on the exchanges.
Ease of Use : Betting on an exchange such as Betfair, could not be simpler. The interface is easy to follow with all markets clearly identified and odds shown clearly. Searching the markets is simple to follow, making the whole experience enjoyable and easily understandable. All bets are matched by state of the art software from markets across the globe and all financial transactions are fully automated, ensuring prompt, almost immediate, payment.
While betting exchanges may differ slightly from traditional bookmakers, they offer a whole new avenue of opportunity for the punter, if used wisely, to turn his meagre stake, into a healthy profit.
How to bet profitably on a Betting Exchange
It may well be tempting to think that the rise of betting exchanges in the past ten years or so has led to a new breed of super-wealthy betting exchange guru’s. While there are a few punters who make their living trawling the betting exchanges, laying against certain selections whilst backing others, it is not really prudent to think that a novice gambler can become an overnight success on the exchanges. However there are some simple rules to follow that will drastically increase your prospects of betting profitably on a betting exchange and ensuring that your time spent on them is as profitable as it is enjoyable.
The first piece of advice is very simple and that is to ensure that you bet within your means. When you open up an account with a betting exchange company, you will deposit a sum of money into your account. This money is how much you have to use to back selections as stake money, and also to cover any bets you accept by laying against a selection. Let’s say for example you deposit £100 in your account. You can now back any market available up to £100. However if you are laying a bet, you can only accept bets that will potentially cause you to pay out £100 if the person backing against you wins. Let’s say you lay odds of 10-1 on Gymslip to win the 3.15 at Kempton and another punter takes that bet and bets £10. If Gymslip wins, he would win his £10 back, plus £100 from you, wiping out your account immediately. However if Gymslip doesn’t win, you would keep his £10 stake (minus commission). The rule here is to be sure you understand what you are laying as well as what you are staking. Do your research and understand your markets!
Secondly, knowledge is key. If you are intending to bet, then research is a great way to ensure that you are increasing your chances. It is rare nowadays that any punter will lay a bet on something they do not know much about. You must ensure that if you intend to back against them, or lay a bet yourself, your knowledge is as good as the people you are betting against. Certainly when you are starting out on an betting exchange, stick with the markets you feel most comfortable with and have the most knowledge about.
Lastly, it is worth noting that there are a great many adverts for betting “systems” which purport to be able to offer you vast wealth and riches if you simply buy the system and put it into practice. While their promises may sound enticing, it is worth remembering that no system is 100% reliable and that often, in order to reap the big rewards, requires a substantial risk of your own capital. The best betting system you will ever have is your own knowledge and self-restraint. Knowing when to bet and where is as important as knowing how much to wager. These are just three simple rules to follow to enjoy a fun and hopefully profitable time on the betting exchanges.
Football Betting on Betting Exchanges
Betting on football matches on betting exchanges can be a bewildering experience to the novice gambler. There are almost limitless options available for the punter to avail themselves of in their quest for a winning bet.
The simplest bet available is probably the match odds. These are expressed as a decimal which may confuse some punters who are used to fractional odds, however many exchanges, such as Betfair, will provide you with the odds as a fraction if you move your mouse over the price on show. In this bet you have the three possible outcomes of the match, team A win, team B win or the draw with the odds shown for each outcome.
In addition to this bet you can wager on the correct score of the game, how many goals in total there will be in the game, what the score will be at half time, whether there is likely to be over or under 3.5 goals in the game, how many goals will be scored in each half, what the half time score will be, who will score the first goal, who will be leading the match at half time/ full time and indeed many others, some including special markets for key games.
However the betting exchanges also offer the punter a chance to gamble in many other ways. Asian handicap systems are now in place on many exchanges allowing punters to bet on the outcome of a match that perhaps didn’t offer good value previously. More companies, such as Betfair, are also providing the opportunities for punters to have multiple bets, such as doubles or trebles on certain games.
Another attraction to betting on football on the betting exchanges is that you can also lay against an outcome. So you no longer have to bet on a team to win, but you can bet against them winning by laying a bet against them.
The huge flexibility offered on betting exchanges for the punter to bet in the traditional sense on a huge variety of matches across the globe, but also to be able to experiment with betting in a variety of new ways, against other punters and without the need for a third party bookmaker, make football betting on betting exchanges the best way for a punter to maximise their chances of changing their stake into a healthy profit!
Live Betting on the Betting Exchanges
One of the most exciting innovations in modern times, that has its roots in the formation of betting exchanges is the chance to bet on an event while it is being played out right before your eyes. Live betting, or betting in-running as it is also called, adds a whole new dimension to betting meaning that you can react to the events you are witnessing on screen and back yourknowledge and intuition to make a profit.
A good example of how live betting can be profitable and make an event all the more interesting would be the famous game between Tottenham Hotspurs and Manchester United from several seasons previously. Spurs led the game 3-0 at half time and in such situations as this, the odds on Tottenham winning the game would come right in, whilst the odds on Manchester United winning the game would have been pushed right out. So while some punters could have tried to “buy money” by placing a large wager on Spurs to win the game outright at half time, other punters may have felt that a United second half comeback was possible and made a bet on United winning the game at far greater odds than had been available before the game started. When United did rally in the second half to come back and win the game, those who would have bet on United at half time would have made a fantastic profit on their investment.
I chose this game to illustrate my point as in the season just past the same situation almost occurred at Old Trafford. United were losing 2-0 to Tottenham, but roared back to win the game. Pundits who remembered the events at White Hart Lane a few years previously would have been able to place a small bet on United coming back after they went 2-0 down and would have had the chance to make a neat profit!
However it isn’t just reacting to the scoreline that can be bet upon in live games. Many companies now offer bets on the next goalscorer, which team will score the next goal and indeed which horse will win the race as it is progressing! The only limit seems to be the imagination of those people who create the markets in the first place.
Live betting on the betting exchanges can really make a sporting event come alive and it has contributed enormously to the growing popularity of betting exchanges as the preferred place for punters to place their bets.
Arbitrage betting on Betfair and other Betting Exchanges
Arbitrage betting is, in simple terms, using the differences in odds, within the same market with different bookmakers, to ensure that the person making the bet covers all possible eventualities and thus will make a profit regardless of the final result. While in traditional terms this form of betting usually involved large sums of money and was a “cloak and dagger” operation with the “arber” often employing people to make his bets with various bookmakers so as to go undetected, in recent times the development of online betting exchanges such as Betfair, has seen the opportunities for the average punter to try his luck with this form of betting.
The facility offered by betting exchanges to lay as well as back an outcome means that it is possible to find a situation where a punter can lay against a selection in one market against one punter and then find the same market with another punter and back the selection in that market. If the odds offered fall within a certain criteria, namely that the lay bet is shorter odds than the back bet, then regardless of the outcome and which bet succeeds, the arbitrager will make a small profit overall. It is worth pointing out here that the commission charged by betting exchanges on winning bets needs to be factored in.
For example, the 3.15 at Kempton sees a horse called “Eggnog” running. You find one market where a punter has offered odds of 5-1 on Eggnog winning that race. You therefore place a £20 bet on at these odds. Next, you find a market where you can lay against Eggnog at odds below 5-1, the lower the better. Say you find a market where Eggnog is 3-1. You then lay against Eggnog in this race up to a value that covers your bet on Eggnog (£20), but does not exceed the amount you will receive should Eggnog win (£100). Let’s say you accept one bet at £30 on Eggnog at 3-1. If Eggnog wins the race you must pay the punter who accepted the 3-1 odds £90, however you will receive £100 from the bet you successfully had, plus your £20 stake back. A profit of £10. Should Eggnog lose the race you will lose your £20 bet backing Eggnog, but receive the £30 stake from the punter for his bet for a profit of £10.
Specialist software is available to search the markets for possible arbitrage combinations and although the profits made are generally small, they can for the punter willing to invest the time and accept the inherent risks (such as cancelled bets which can cause a loss) be a productive way to increase profits on Betfair and other betting exchanges.
