Betting Exchange Explained and How Does It Work?


A Betting Exchange is a facility that enables punters to bet against each other instead of betting against a bookmaker which traditional betting is all about. Unlike the traditional betting methods used in betting shops and online operators, the betting exchange allows players to act as bookies - letting them determine the odds for an event – or sit in a customer’s seat – to bet using the odds set by another punter.

As a much-scrutinised and criticised tool, the betting exchange managed to beat the odds and establish itself as one of the most popular ways of betting. Betting exchange has been introduced as a revolutionary platform at Betfair which today remains the largest name when it comes to betting exchanges.

How Does Betting Exchange Work?

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Betting exchange basically puts players in control and eliminated the unnecessary burden brought by frequently tedious and tiresome betting operators. This facility does not come for free, however, and involves commission fees, which are largely reasonable, varying from 1-5% of the profit.But eliminating the idea of a bookmaker controlling your betting process comes at no cost too high and that’s the biggest advantage of this revolutionary betting platform.  With them being nothing more than a ‘middle-man’ standing between you and potential profit, the betting experience and the overall feeling you get from it are more raw and natural as well.

Betting exchange works in two simple steps as it allows you to either back a bet or lay it.

Backing a Bet

By backing a certain bet, you express your confidence that a selection you make will win. But instead of betting on the odds provided by a bookmaker, you bet against another player who will, in this case, determine the odds believing that your selection will lose. To simplify, you bet against a lay bet.

If we are to assume that you want to back Manchester United to win against Liverpool at Anfield, you would normally find the value around 3/1 at the traditional betting operator. However, the odds on Manchester United can go up to 5/1 if you line up against a punter who is convinced the home side will win and is prepared to lay your bet. With Manchester United winning the game you would pocket sweet £50 on a £10 bet, which is the money you scoop away from the rival punter who laid on Manchester United.

Laying a Bet

If a player decided that a bet will not go through then he or she has the opportunity to lay the bet. What this actually means is to bet against a certain option. If you take Manchester United again and decide to bet against them to win the Premier League after a summer of heavy investments, the betting exchange offers an opportunity to sell that bet at the odds you find fitting. If you offer odds around 8/1 with an investment of £100 and no one accepts it, your bet will be annulled and you’ll get your money back.

But if a player takes you up on your offer, your bet will be matched with the exact amount of £30. If United end up not winning the league you win the buyer’s bet and scoop money from betting against a selection.

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