EXCHANGE BETTING EXPLAINED
WHAT IS EXCHANGE BETTING?
Exchange betting is also a relatively new thing compared to traditional betting, as it has been round for likely no more than 14-16 years and the key difference here is that it requires no direct involvement from bookmakers.
Lately exchange betting is becoming more and more popular, however there are still a lot of people who don’t really know what it’s all about and are hesitant to try it out by themselves. This is why we decided to dedicate an entire page to exchange betting, this page will give people a good enough understanding of what betting exchanges actually are and how to bet there.
When betting exchanges were initially introduced, they were considered as a replacement to traditional bookmaker, however they never replaced them – bookmakers and betting exchanges exist to this day side by side. As we already stated above, betting exchanges don’t need any involvement from bookmakers, instead players themselves set the odds and bet against each other.
There is a number of advantages to exchange betting, when comparing it to traditional betting with a bookmaker as well as that – there are also some drawbacks, both of which we will cover in this article.
HOW EXCHANGE BETTIG WORKS?
Similar to regular betting sites, exchanges offer betting markets for upcoming sporting event, yet the main difference between the two is the fact, that on an exchange you can either “back” or “lay” each selection.
We will make a quick pause to cover what “backing” and “laying” a selection means in this context. Normally anyone familiar with sports betting should already be aware with this terminology, however just in case we decided to still cover this.
Backing a selection means betting, that it will happen.
Laying a selection means betting, that it will not happen.
Here you can see an example of how a “match result” market looks like on a betting exchange. The immediate difference you can spot here is the number of potential bets you can place – as we mentioned above on an exchange each selection implies two possible bets, so this “match result” market will allow you to choose from four different potential bets, while normally it would have had just two selections: home and away.
With this example game, we can assume you want to back England to win, in this case as you can see the odds are 1.352, so you will click on that selection, add it to your betslip, input your stake and confirm your bet – the activity of betting on an exchange and the overall interface logic is similar to any other betting site out there. The major difference here is that you are placing this bet with other people, who decided to lay England – those people act as the bookmaker in this scenario, so they will be the ones, who pay you if your bet wins. The only thing, which the exchange is responsible for is taking care of the money to make sure all transactions are completed as they should, of course they also take a commission, otherwise they wouldn’t have been able to profit.
You would have followed the exact same process if you wanted to lay England instead of backing it, instead of your stake you would need to input the amount you are willing to risk.
When betting on an exchange you don’t necessarily need to accept the existing proposed odds, when backing or laying a selection, you can propose your own odds. If we take the same example again, but this time we can imagine, that you would only be comfortable backing England at 2.00 – you can propose those odds yourself and as long as there is a player who would want to lay he same selection at that price, your bet will be accepted.
ADVANTAGES OF EXCHANGE BETTING
What we have covered above can already be considered as advantages, however there’s more to it – so let’s look at exchange betting even closer.
When placing bets with a bookmaker we are trying to predict what is going to happen and pick a potentially correct outcome out of a number of potentially incorrect ones. On an exchange we have an option to bet, that something is not going to happen, which significantly increases the chances of our prediction to be correct.
Here’s a good example: let’s take an “Exact Number of Goals” market in football – this market has a lot of potential outcomes (1 goal, 2 goals, 3 goals, 4 goals, etc.) and only one outcome will be correct, so if you decide to lay a selection on such a market, your chances of making an accurate prediction are fairly high. Additionally, if you put some though and analysis into it and look at the teams, that are going to play and their usual tactic and style (defensive/offensive) – you will be able to get a better idea of whether to expect a lot of goals or not. This is just one example, there are plenty more markets like this for you to explore yourself.
HEDGING YOUR BETS
Using betting exchanges also opens up additional ways to manage your risk smarter and will allow you to reduce potential losses and secure potential winnings.
Let’s imagine there is an upcoming football game “Sheffield United vs. Burnley” and you are closely following Burnley this season and are expecting them to win, so you decide to back them with $10 at 15.00 – you are going to potentially win $150. Now, a day before the game takes place it becomes publicly known, that several strong players from Sheffield United are not going to participate in this game, so Burnley’s odds drop to 7.00 as they become more likely to win. Now you can lay Burnley with $10 at 7.00, this will potentially bring you $70.
This is a very good position to be in because whatever the outcome of the game is you are guaranteed to profit. One of the two possible outcomes will happen.
Burnley wins the game, your $10 bet at 15.00 will win, the $10 at 7.00 bet will lose and you will win $80.
Burnley loses the game, your $10 bet at 15.00 loses, however the other $10 bet at 7.00 wins and you still get $70.
This is a prime example of what bet hedging means and as you can see, if you find the right market and the right odds, you will be able profit regardless of the outcome of a game.
DRAWBACKS OF EXCHANGE BETTING
Up to this point we were talking about betting exchanges in a mostly positive context, however it’s not all sunshine and rainbows – like anywhere in life, there are some drawbacks here as well, so let’s look at some of them below.
The main area where betting exchanges fall short are bonuses – not that there are no bonuses on betting exchanges, some of them have registration offers and even loyalty points, however the amounts of bonus funds you receive are not comparable to what bookmakers offer on an average. This can be explained by the fact, that running a betting exchange is a lot less profitable compared to running a traditional betting site.
Another drawback of exchange betting is not always being able to place your desired bet. While bookmakers will normally always accept your bet as long as you fit all the requirements – on betting exchanges you rely on other people to have an opposite position and accept it at the proposed odds. This is normally not an issue if you are betting on popular markets and popular sports, however it might be quite difficult to place a bet on less popular sports and markets.
That’s probably it when it comes to most significant drawbacks of using betting exchanges, however it is important to mention, that despite all the advantages we mentioned here – it is not recommended to use betting exchanges exclusively.