What Is Exchange Betting and Why is it Popular?
Fast becoming a global phenomenon, exchange betting is arguably the biggest innovation in the 21st century industry.
It has revolutionised the game, but what is it all about?
Firstly, no bookmaker is involved.
The middle man is taken away and you will pit your wits against one other player – either the Backer or the Layer.
Backer and Layer? What are they?
A backer is a player looking to bet on something – for example, a tennis player winning. While being a layer is essentially playing the role of a bookmaker, you are betting on something not happening.
For example, in a Juventus v Real Madrid match, you would be able to either back them at 3.04 (you need them to win) or lay them at 3.12 (you need them to either draw or lose).
2,041 euros were available to back Juventus at this price – this cash came from punters willing to lay the Italian side at those odds.
3,236 euros were available to lay Juventus at 3.12 – this came from people willing to back them at said odds. Therefore, an exchange occurs.
Is it riskier being a backer or a layer?
This depends on the odds – like traditional betting, you reap greater rewards from backing higher prices.
If you are laying, however, the risk increases with the odds.
How do the odds work compared to traditional betting?
Exchanges use decimal odds, which work in the same way they would if a bookmaker was involved.
The stake is factored into the odds, so by placing 10 euros on Juventus at 3.1 you will receive 31 euros – a profit of 21.
If you decided to lay on Juventus at 3.22, you would need the Italians to lose or draw to win 10 euros (the backer’s stake).
If they win then 22.20 would be lost – this is the profit the backer has won from their bet.
How do betting exchanges make money if it’s person v person?
Betting exchanges charge a commission on bets struck as a payment for using their platform.
Matchbook charge just 1% – the smallest in the betting industry.
What does trading mean in a betting context?
Because you can back and lay, betting exchanges allow you to trade your position and guarantee profit.
An example would be backing Juventus at odds of 40 at the beginning of the season to win the Champions League at the beginning of the season and then laying them at 10 now they are in the semi-finals.
Because they have reached the last four, their odds have decreased significantly and you are now in a position to profit from that with both the back and lay bets running at a guaranteed profit.
What are the advantages of betting exchanges for me?
• They allow you to back and lay.
• Their odds are usually better than traditional bookmakers.
• You can lock a profit by backing and laying the same selection at appropriate odds.
Exchange betting uses decimal odds. Find out how this differs to fractional ones here.
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