In recent years, we have seen a new way of betting disrupt the betting industry as we know it. Users are looking at a more varied betting place, beyond the traditional sports-book.
We also have an article about sports betting tips Bookmarkers try to keep a secret.
This new concept is Betting Exchange and you may be asking: ‘what is a betting exchange site?’
A Betting Exchange site is a platform where users may bet on the result of an event between the users themselves. The range of events would be similar to sportsbook with a few key differences.
In Exchange, users act as the bookie themselves as they set the odds and an another user would agree to those terms. Another key difference, is that users may bet that an event will or will not happen, Example: ‘I bet Italy will not win the world cup’.
While in sports-book betting sites make money off lost bets, in Betting Exchange, only a transaction fee is charged by the bookmaker.
The establishment of betting exchanges creates more opportunities for gamblers all over the world as it creates scenarios bookmakers would not be involved in to reduce risk.
This is a free market, users are free to bet on what they want and at what odds they would like. As long as you meet another user who is willing to match your odds, your stake is placed and winnings are up for grabs.
What Is A Betting Exchange Site?
This new concept has disrupted the betting industry as the idea of betting versus people like yourself rather than a bookmaker appeals to customers. It is a completely fair bet as you have set the terms and it is simply your intuition versus another user’s.
The two must-know terms used in Betting Exchange are Back and Lay. To back a bet means to bet in favour of the outcome happening. For example:
‘I back Messi to be first goal scorer’.
As you have probably guessed, to Lay a bet means to bet against the outcome happening, example: ‘I Lay Messi to be first goal scorer’.
The History of “Betting Exchange”
The Betting Exchanges on the market were Betfair and flutter.com, these ended up merging in 2000. Today, BetFair is the dominant player in the Betting Exchange Market with vast majority of the market share.
BETDAQ, who was acquired by LadBrokes PLC in 2013, is the second biggest Betting Exchange. BETDAQ have roughly 7% of the market share, enforcing how dominant Betfair are in the Betting Exchange market.
The evolution of Betting Exchange is centred around Betfair being the market leaders, and the start of it all was an individual named Andrew Black.
Andrew was actually constantly campaigning against betting for the majority of his life. At 35, he began the unlikely path to his astounding success, he created Betfair.
Before his Betfair venture, Andrew had a rough patch in his life due to losing his brother to a brain infection. This caused him to drop out of everything.
When Andrew was back on his feet and working, Black got into betting on horses as he had a huge urge to gamble. He even once won 25,000 pounds from 20! This sparked his interest and he felt he finally found his calling, to combine this with his formidable IT skills.
After initially meeting several people about his idea for a betting exchange site, Andrew Black was getting nowhere. He eventually met Ed Wray, who would be his future co-founder in 2000. They met at a garden party and started discussing Black’s concept. They decided to pursue it together.
After finally receiving funding for their venture, BetFair was launched on June 9th 2000. After a slow start, Betfair merged with another start-up and brought in the much needed attention they were after.
Betfair proved to be the concept users were waiting for.
A Full Explanation On How Betting Exchange Works
Traditionally, making a bet was based on placing a stake on an unlikely outcome in the hope of multiplying that stake by a significant amount. Although some users would win, the vast majority bets would lose and this was the ideal situation for bookmakers.
This left an opening for a more idealistic concept for users, and this is where Betting Exchange comes in.
Anyone can now place a bet on their own terms, on whatever outcome and mitigating the risk of misunderstanding which is very common in traditional sportsbook betting.
To simplify this concept, betting exchange is the chance to bet without bookies through an established, safe and reliable platform.
All limitations such as odds and scenarios are removed and are in the hand of the user.
Betting Exchange also introduced the possibility of betting against the outcome happening (To Lay a bet). This was the first of its kind, when a user finds someone who is willing to lay a bet he is backing, the bet is processed through the exchange and placed.
This has been running for 15 years, with millions of backers being matched by layers and their bets being processed in seconds.
This was a refreshing change for punters all over the world and being a regular user of it myself, I feel this is the platform to maximise my returns.
Betfair had created a forum to receive feedback over the exchange, and it was matched by an overwhelming response of appreciation for the platform.
BetFair vs Betdaq – The Two Major Platforms For Betting Exchange
Betfair and Betdaq are the only two platforms in the betting exchange market worth mentioning. Here is my own analysis of the two;
In this area, Betfair is easily the winner. Although in certain industries popularity doesn’t necessarily improve user experience, in this case in certainly does.
As more bets means the more chance your bet is matched. With Betdaq, you may struggle to see your bet matched in less popular betting markets.
- Variety of bets
Although Betfair edges Betdaq in this sector, Betdaq still has a considerable range of bets and on most popular events matches Betfair. This won’t be the case for the less followed events.
This is the section where Betdaq actually beats Betfair. Betfair does not offer any promotions in its betting exchange platform. Betdaq offer customers 50% commission refunds for using it’s ‘Trading Tool’ every Wednesday.
- Opening Bonus
There is no specific opening bonus for Betfair Exchange however, you can claim £30 in free bets for depositing 10 pounds in your sportsbook. Betdaq offer a £25 free bet for earning 4 points in their exchange platform with in six months.
As you can clearly see, there is definite reason to why Betfair are the dominant platform in the Betting Exchange market.
Controversy with Betting Exchange
Betting Exchange received criticism from the ‘Big three’ which are William Hill, Ladbrokes and Gala Coral Group. This was due to the lay function available in the platform would increase corruption in sport.
The Exchange sites argued that all platforms increase corruption and that the complaints are not based on the integrity of sport but for commercial interest.
They also argued that Betfair Exchange records all transactions with full customer profiling as it is all online, while cash booths are the ones truly pushing corruption. – what do YOU think?Get More Information
I hope after reading this article, you truly understand what is a Betting Exchange site.
As a regular user of Betfair’s Exchange platform, I strongly recommend betters to use it as it would not only maximise your returns but give you full control of your bet’s terms.
As always, be sure to also drop us a comment down below if you need some more assistance.