What are betting exchanges and how do they work?

With the rise of internet gaming and gambling, the number of ways in which we can place bets and win money online has exploded. From betting on traditional sports to betting on how the stock market will perform, a bookie somewhere will usually be willing to accept your stake.

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In the last decade, it has even become possible to place the bets that no bookie will take. Internet platforms connect fellow players and match customers with like-minded players who will accept their challenge. The platforms that host these players are known as betting exchanges, with Betfair the largest of its kind.

What is Betfair?

Andrew Black, a developer who came up with the betting exchange idea, founded Betfair in 2000. While other platforms soon entered the bet exchange market, Betfair continued to dominate and went on to become the largest betting exchange in the world.

What is the difference?

The main difference in an exchange is that the customer does not bet directly with the bookmaker. The platform simply connects gamblers with differing assessments on the outcome of a race, match, or indeed anything at all, and allows them to place opposing wagers. This means the system can only accept your bet if another customer decides to play against you. This can be achieved instantly; alternatively, if no one accepts, it won’t be achieved at all. For large bets, the system can also accept multiple player in a consortium to bet against you.

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What are the advantages?

For the customers, it could be that the odds they receive seem fairer, as they decided them. There is also the feeling that the house can’t cheat if it is not playing. Most exchanges only charge a commission of between two per cent and five per cent, so winnings are more likely to stay intact. It is more like when you win money playing online poker on a site such as http://onlinecasinopokerroom.com/ than regular internet betting.

What are the other differences?

Most players using an exchange also appreciate that you can lay a bet either way on a team, player or horse to win or to lose. The players are also anonymous. Unlike betting with friends, there is no one to hold a grudge against if you lose.