Betting Exchanges - Explained

Betting exchanges offer individual punters the opportunity to bet with (back) or against other punterts (lay). Imagine two friends having a bet while watching a football match; an impartial observer holding the money while the game is played. A betting exchange works in the same way: exchange members bet against each other, and the betting exchanges hold the stakes until the bet is settled.

A betting exchange is an online bookie which uses technology to make sure you get a better price. It does that by reducing its risk, which means it doesn't have to build in extra margin as a safety cushion. The effect is that punters bet on the price they want, and not the price they're told they can have.

Often the odds available on exchanges are better than you will get in your betting shop. (Av. 20% better odds) Whereas normal bookies price up a ‘book’ so that what they are taking in bets on an event is balanced up by what is going out (called 100% over-round), punters prepared to lay on exchanges often will be aiming to lay on just one selection. They can therefore afford to be more generous with their prices because they don’t have to be concerned with the prices of other selections.

The slightly negative side to it is that those better odds are not always available for a lot of money. The amount of money you can actually put on a selection is limited by the amount the person (or persons) laying at that price are prepared to risk. So if you want a big bet you cannot always be accommodated on the bettingexchanges.

A couple of things to bear in mind if you are seduced by the sound of all this is that exchanges make money by charging commission on all winning bets. So when weighing up that mouth-watering price, consider how much percentage is cut from your winnings by the exchange firm. The amount of commission usually reduces the more you bet, so it may be at its most expensive when you first open your account.

For more details see the exchanges themselves :
BETDAQ
Betfair