Have you ever wondered what a draw no bet means? Or asked ‘how do betting exchanges work?’ This article will introduce you to some refreshing new ideas on how to revolutionize your betting approach and look at things differently.
Why not become a bookmaker yourself? This page provides all the details of advantages and disadvantages of a betting exchange explained in detail. After reading this article you’ll have a full understanding of a new approach and how to put it into practice! So, how do betting exchanges work in comparison to online bookmakers? All will be revealed below.
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The main purpose of a betting exchange is to provide a platform that has the technology to create a marketplace for people wishing to bet against each other. Betting exchanges provide the same opportunities to bet as a bookmaker does, except there are a few differences, which we will explain in full detail below.
The first main difference between a bookmaker and a betting exchange is that you are betting against other bettors, when using a betting exchange! Whereas bookmakers provides the odds themselves, all the odds you will find on a betting exchange are offered by other people like you.
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How do betting exchanges work between bettors?
The good news is that you can either bet on odds supplied by another bettor, or you can offer odds to another bettor, too. This means that you have the option to choose to be the bookmaker, or the bettor, or even both! As you can imagine, this opens up a lot of opportunities for various options a bettor may think of. Sounds good right? Well read on about how a betting exchange works wonders and offers you the options to do both!
The history of the betting exchange explained
The first successful betting exchange, Betfair, was created by Englishmen Andrew Black and Edward Wray back in June 2000. Both of these guys were Uni graduates, except Andrew Black never completed his degree. Black, spent a considerable amount of time in the betting shops of England, doing so poorly in university that he was asked to leave the University!
However, this was a blessing in disguise for Black. After spending years wandering around different jobs, Black came up with the idea that would become Betfair! The birth of the Betfair betting exchange changed the landscape of sports betting completely. In the next chapters we’ll explain just how much of a revolutionary tool Betfair, and betting exchanges, proved to be, when they shook up the betting world in the year 2000 and onwards!
How do betting exchanges work
So, we’ve already established that betting exchanges, such as Btefair, provide the platform for peer-to-peer betting and alike. Whilst the thought of using betting exchanges may seem confusing at first, you’ll soon get the hang of how things work and after reading this article you’ll be convinced you’ll be able to maximise your betting value in no time.
As mentioned above, when you place your bet at a betting exchange, you’re betting against another bettor. To enable this bet, there must be two sides of the marketplace where two bettors can place their bets. One person is looking to
back
an outcome and another is looking to bet
against
that outcome.
The person betting on the outcome to happen will be looking to place a BACK bet, while the person offering the odds to take that back bet is offering the other guy. This ‘other’ guy would be offering what is called a LAY bet. Technically speaking, the guy taking the LAY bet is acting as the bookmaker would.
The back bet
Back betting is the most common bet type and is the traditional way of betting. You are betting on an outcome which you think is going to happen. Back bets are those bets that are placed at standard bookmakers such as Five Dimes and DraftKings.
If you wished to stake $10 on The Dallas Cowboys to beat the LA Raiders you would need just $10 to place this bet, even if the odds were +200, or 3.0 in decimal. We quote the decimal odds here as betting exchanges use decimals on their platform, which we will explain in detail below. Here is a brief summary of the bet outcomes.
BACK $10 Dallas Cowboys at 3.0 odds
If bet wins = +$20
If bet loses = -$10
The lay bet
So,
how does a lay bet work? Lay bets are the opposite of back betting. A bettor will typically offer a lay bet if they think a bet will lose. For example, if you thought the Dallas Cowboys were going to lose against the LA Raiders, you would LAY the Dallas Cowboys on the betting exchange. As you can see, this is the exact opposite of the back bet above. A person laying bets is essentially playing the role of the bookmaker.
LAY $10 Dallas Cowboys at 3.0 odds
If bet wins = -$20If bet loses = +$10
How does a betting exchange differ from a bookmaker bet
By now we think you’re getting to grips with the common question “how do betting exchanges work”, but there’s more to come. Our
online betting guide
to betting exchanges will now provide you with some positive ways that a betting exchange differs from a standard bookmaker.
In a nutshell, a betting exchange will
generally
provide more betting markets within each sport to bet on. Not only that, the added options to either back or lay can suit most peoples’ choices. A draw no bet option can be found on some online sportsbooks. This bet offers the flexibility of the bettor not losing their money if the game ends in a draw.
However, these types of bets generally have lower odds because there are only two outcomes rather than three. The betting exchange provides the option to simply bet against the team to lose, therefore offering bigger odds. If the bettor still wants to have the draw taken away from the bet, draw-no-bet markets can also be found on the betting exchange and will generally have bigger odds. Having bigger odds can help long term profits, which also provides the possibility to form a
system bet explained
below.
Best odds
When betting with a bookmaker you are restricted to the odds they are offering. While these odds are not static, and do change over time, the bookmaker has to ensure they profit from offering these odds. But how do they do this?
Sports betting Vig
Vig is a term used for how bookmakers ensure they profit from offering odds in sports betting. “Vig” is short for Vigorish, also called “juice” or overround.The Vig is a set percentage margin that a bookmaker will apply to its odds to ensure they profit from the odds they offer. You can see a visual example below of two teams that are evenly matched. Let’s say the Dallas Cowboys were playing Tampa Bay and they both had an equal chance.
If both evenly matched, the probable odds would be +100, or 2.0 in decimal. However, to ensure they make a profit the online bookmaker would typically offer odds such as these found below.
Dallas Cowboys – odds -110
Tampa Bay – odds -110
By doing this, the bookmaker ensures they make some profit, they have overheads and provide a platform to bet on, so it’s only fair they take a small charge for doing so. Some sportsbooks offer
1×2 betting explained
elsewhere on our website. The “x” part of this bet simply refers to the draw being an outcome. However, in this example the draw was taken out of the equation and this bet was a “draw no bet option”.
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How do betting exchanges work to ensure they profit?
So, you may be asking, how do betting exchanges work to ensure they profit? How betting exchange works to ensure they profit is done differently, although they still ensure they profit! A betting exchange typically charges a commission. This commission is only deducted from the winning player and is generally between 1% and 5%, depending on the operator.
Odds on a betting exchange for the same game will generally have zero Vig, as detailed below.
Dallas Cowboys – decimal odds 2.0 (-100)
Tampa Bay – decimal odds 2.0 (-100)
The odds above seem a lot fairer, until the commission charged from the betting exchange is taken into account. Even so, generally the odds offered by the betting exchange can often be better after the commissions have been deducted. The vig levels that are applied to all types of bets, by a bookmaker, are generally at around 5-12%, whereas bets like
Asian handicap example
percentages of vig, or overround would be lower, at around 5%.
Conclusion
We hope this article has answered any basic queries you may have wondered about betting exchanges. Maybe it is worth considering using one, or add one to the sportsbooks you are currently using, for added value with odds.
Long-term profiting is all about getting the best odds. Using a betting exchange can put you at a distinct advantage without fear of having your account restricted. Add to this the plethora of betting markets contained within each sport and you might decide it is worth a look? Or maybe you have always dreamed about becoming a bookmaker yourself? Now you have the chance!
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Betting exchange explained
FAQ
❓ How do betting exchanges make money?
So, you’ve figured out the odds on a betting exchange are often better than a betting sportsbook? How do betting exchanges profit then? See our article at TheGruelingTruth . We’ve written a guide with examples showing a betting exchange explained in detail. We’ve provided examples of two bet scenarios to help understand the concept of back and lay betting.
✔️ Do betting exchanges offer the best odds
Our betting exchange explained article at TheGruelingTruth depicts some real-life examples to objectively show you how a betting exchange differs from a general sportsbook. We explain all about how bookmakers make their profits, how they ensure they profit from their betting odds and take a look at the betting exchange explained in detail form the grass roots up! /faq-item]
You may be asking “how do betting exchanges work”, or can I become a bookmaker using a betting exchange? The good news is we have all the answers to these questions in our in-depth article at TheGruelingTruth . We’ve got the betting exchange explained in detail, from the beginner level upwards. Our aim is to enable all readers of this article to get the answer to ‘how do betting exchanges work’ within five minutes of reading!
💡Are betting exchanges odds in decimal format?
If you’re having trouble converting USA odds or fractional odds to decimal, we’ve got your back!. Our article at TheGruelingTruth provides some real-life examples of backing and laying bets and how decimals work. Decimal odds formats are prevalent in the stock market and most forms of online trading and currency exchanges.
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