If you’re new to betting exchanges, or have never used a site like Betfair before, you might be wondering what all the fuss is about. If so, then you need to read our guide to the betting exchanges to see exactly what you are missing out on…
If you have never used a betting exchange like Betfair before, then you are missing out in a whole host of ways. Here is a list of the major benefits to using a betting exchange over a traditional bookmaker and the reasons why you should seriously consider getting involved.
The first major benefit to using a betting exchange over an online or high street bookmaker, is quite straightforward; the vast majority of prices found on exchanges like Betfair are much better than you would find on offer with a bookmaker, and this comes about because a bookmaker has to think about the bottom line.
If you think a horse will win a race, you can place a bet and if the horse loses, all that happens is you lose your stake. If you win, the bookmaker has to pay out much more than they took from you. Now realise that the bookmaker has to lay every single horse in every single race. They will quickly rack up liabilities if certain horses are well backed, or if they are priced incorrectly. The bookmaker will work to high overrounds to try and make as much money as possible and they will manipulate markets or limit the stakes of punters, in order to try and reduce their liabilities.
This doesn’t happen with betting exchanges, because it is simply individuals placing bets against each other. If I think a horse will lose and I offer to lay it at a certain price, there is bound to be someone out there who disagrees with me and will back it at that price. Other people will also be putting their money where their mouths are, so lots of betting opportunities are created. These individuals don’t have to lay every single bet, work to set profit margins and risk big liabilities, so they can afford to offer more generous odds.
To give an example, let’s take a look at this year’s renewal of the 2,000 Guineas. The favourite is Camelot, priced no bigger than 2.50 with the bookmakers and as short as 2.00 in places. On Betfair however, the favourite is priced at 2.66 – that’s slightly better than the highest price offered by the bookmakers and massively improved on some others – even after you have factored in the commission charged by the betting exchanges!
And the bigger the odds, the better the value. Let’s look at the rank outsider in the same race, a horse called Ptolemaic, currently as short as 101.00 with many of the bigger bookmakers, but a best price of 251.00 with BetVictor. If you take a look at Betfair, you’ll find that the same horse is available to back at a massive 670.00 – you don’t need to be a mathematical genius to see that the betting exchanges are offering more value than the bookmakers!
Another major advantage of a betting exchange over a bookmakers, is the ability to lay. Let’s say that you’ve studied the form ahead of the FA Cup final and you think that Liverpool are slightly inferior to Chelsea. You believe that there’s no way Chelsea can lose to Liverpool, but Chelsea are so inconsistent of late they might not win the game, so you don’t want to back them.
You don’t want to back either side, so you look at the price of the draw, but you don’t feel there’s enough value to place a bet. Well, with the bookmakers, that’s it – you either have to place a bet that you’re not really happy with, or not bet at all. With the betting exchanges though, you have another option open to consideration – you could lay Liverpool (or in other words, bet on them to fail to win).
Laying Liverpool means that you will win your bet if Chelsea win the game, or if the 90 minutes ends in a draw. This is not a bet you’d be allowed to strike with a bookmaker, but is freely available to you on the betting exchanges.
The ability to lay a selection on the betting exchanges opens up further opportunities too – trading. Imagine you back the aforementioned Camelot to win the 2,000 Guineas and the following day, the second favourite is found to be injured and is declared as a non-runner. The prices on the other horses change, as you would expect and you now find that the price of Camelot has fallen. This presents you with the opportunity to lay the horse at a shorter price than you backed it, allowing you to either guarantee a profit whether the horse wins or loses, or at least to win back your stake should the horse lose (and still profit slightly if it wins).
With In-Play betting more popular than ever, more and more markets are available on the betting exchanges that allow players to bet during the contest. Imagine backing a football team to win and they score an early goal and the price collapses – you can now lay the same team safe in the knowledge that you can’t lose. Tennis, Cricket, Golf, FA Racing – you name it, you can use Betfair to trade on it!
Another, admittedly more minor benefit to the betting exchanges, is the consistent use of decimal odds. The older generation may be happy trying to work out whether or not 15/8 is bigger than 100/30, but with decimal odds there’s no need to do any fiddly mathematics. It’s obvious to even a toddler that the number 2.88 is smaller than the number 4.33!
It’s also far quicker to work out your returns – a useful feature when betting in a hurry, perhaps when trading on the exchanges. £10 at 4.33? Well that returns £43.33. £10 at 15/8? Are you sure?
Which Betting Exchange?
So now that you can see the benefits of betting with an exchange, where should you go? There are smaller betting exchanges like WBX and Betdaq, but these are limited in terms of markets offered and liquidity (the amount of money being traded – if there isn’t much liquidity, then there’s a greater chance of your bett not being matched).
By far the largest of the betting exchanges is Betfair and this is the place that a newcomer to the betting exchanges should start out.