Sports Betting Guide: What’s Exchange Betting and How Does it Work?

One of the fastest growing ways for sports betting handicappers to place bets is through exchanges. These offer ardent bettors a variety of betting alternatives to the usual bookies with the promise of big rewards to the bettors. In this article, we explain betting exchanges, highlighting how they work and explaining the costs related to the betting exchanges, courtesy of MyBookie online sportsbook.

Learning How to Bet on Sports Takes Us to Betting Exhanges
Sports Betting 101: Everything You Need to Know About Betting Exchanges!

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What’s Exchange Betting and How Does it Work?

Over the recent years, betting exchanges have increasingly popular in sportsbooks.

Sites that have betting exchanges offer odds on almost all major sports across the world, including American Football, Soccer, Baseball, Tennis, Horse Racing and Motorsports, among many others.

Exchange betting is way for gamblers to cut out the vig that they pay on each and every bet to the bookie.

That alone makes exchange betting a great way for some sports bettors to profit and make money betting on sports.

However, there are a few drawbacks.

Check out everything you must know about an intriguing aspect of the gambling industry, exchange betting.

Exchange Betting: A Primer

What is a Betting Exchange?

A betting exchange is an online platform where sports gamblers can place wagers against one another instead of betting against a bookmaker.

Simply put, betting exchanges are sportsbetting sites that offer sports bettors an opportunity to bet against their peers.

Also known as lay betting, betting exchanges generally work by allowing punters to sell odds to fellow punters rather than the traditional odds offered by bookmakers where punters back a bet.

Users have the ability to either back a bet or lay a bet.

When we back a bet, we make the bet.

For example, many of us backed the Eagles at +108 to beat the Chiefs in this year’s Super Bowl.

When we lay the bet, we accept the bet.

If I had called you and said, “I’ll take that bet on the Eagles,” what I’m saying to you is that I will accept your bet.

Once the Eagles beat the Chiefs, I owed you just like the sportsbook owed you.

But if the Chiefs had beaten the Eagles, you would have owed me.

So when you lay the bet, you act as the bookie on a betting exchange.

The exchange itself acts as a facilitator, matching bets between users and charging a small commission on winning bets.

Because odds are set by users, betting exchanges often provide more competitive prices compared to traditional sportsbooks.

How Does Betting Exchange Work?

On face value, betting exchanges sound complicated, but once you get the hang of the process, you’ll realize that it is a rather simple process.

For example, if a bettor wants to back the New England Patriots in the NFL odds to cover the spread (at -7.5) and to win 500 (at -107) against the Tampa Bay Buccaneers at home, he/she can place that ‘Back Bet’ order in a betting exchange site and wait for someone else to take the bet.

The punter who takes the bet is called a ‘layer’ because they ‘lay’ the bet in identical fashion to a bookmaker.

Mind you, if the bet is accepted or matched by the layer, it becomes binding and cannot be reversed or cancelled, as your wager is tied to the layer’s money.

But if the bet is not accepted or remains unmatched by the time the event has started, the money will be refunded back into the bettor’s account.

Owing to ease in accessibility to betting sites over online platforms, peer to peer network betting is a big part of today’s betting world, a key reason why betting exchanges take place across the world.

Not to mention, online betting exchange forums allow bettors to view multiple odds and spreads, which allows the bettor to make better decisions and get the highest edge for potentially bigger profits.

Besides betting in game outcomes prior to the start of the events, betting exchanges also allow bettors to place wagers on in-running or in-play bets.

This feature is, however, mostly meant for the most popular sporting events that have live television coverage.

Betting Exchange Markets

Betting exchanges offer a wide variety of betting markets across different sports and events.

Common betting markets include straight up or moneyline results, over/under totals, spread lines, and even live betting.

Liquidity, or the volume of money available for betting, plays a crucial role in determining the efficiency of a market.

High-profile events like the Super Bowl and World Series or horse races like the Kentucky Derby provide more liquidity on betting exchanges than other sporting events.

Liquidity is king when it comes to exchange betting.

Without liquidity, it’s difficult to find a good match where the sports gambler can find fair odds and where those accepting bets can find a gambler who wants to place bets.

The two most popular betting markets on betting exchanges are sports and horse races.

Since betting exchanges developed in the United Kingdom, soccer is the sport that has the most liquidity on many betting exchanges.

Horse races as well since the Sport of Kings is popular in the UK.

Peer to Peer Betting Exchanges

The core principle of a betting exchange is its peer-to-peer nature.

Instead of relying on a bookmaker to set odds and accept wagers, users interact directly with one another.

This model allows bettors to take on the role of the bookmaker by offering odds for others to accept.

The core advantage to the individual that acts as the bookmaker is they can deal directly with sports bettors.

They can run a book that provides the same services as a professional online sportsbook provides.

This can lead to a small, profitable, bookmaking business without the overhead that sportsbooks require.

For sports handicappers, the advantage is a lower or even non existent vig, or juice, in some cases, and the ability to search for overlay prices.

On a betting exchange, the gambler searches for the right price.

Here’s an example, let’s say you want to put $200 on the Lakers to cover a -6 spread against the Celtics.

The spread is -6 on the sportsbook where you do most of your betting.

But on a betting exchange, you find a spread on the Lakers at -5.5.

You do some digging and another individual on the exchange is offering the Lakers at -5.

Still one more individual is offering the Lakers at -4.5.

For sure, you make the exchange, you place your bet with the person offering the Lakers at -4.5.

The Drawbacks in Sports Betting Exchange

It all sounds rosy and great but there are some drawbacks.

Since we’re placing bets on a betting exchange, liquidity can be an issue.

The person who offers the Lakers at -4.5 is most likely not going to accept a bet of $1,000.

So if we really like a specific bet and wish to place a lot of money, it could be tough to find anyone offering overlay odds willing to accept our bet.

Don’t forget that liquidity is king on betting exchanges.

However, the more liquidity, the tighter the spread because the more is at stake for the individual bookmakers.

Also, we must think of individual bookmakers on betting exchanges the way we think of the odds makers at Vegas casinos.

It’s doubtful that any bookie on a betting exchange is going to offer a spread line way out of line with their fellow bookmakers.

So in that sense, we might have to get creative and spread our money around individual bookies on the exchange.

It could be worth it.

It might not be.

That’s other issue.

We can spend so much time searching for the right bet, we end up making a bad decision or no decision at all.

It can be very difficult to find overlay lines.

In addition, none of the sportsbooks in the United States offer exchange betting at this time, which means, again, liquidity could be an issue on specific bets.

Costs Implications on Betting Exchanges

Given that betting exchanges provide the service for punters to match bets with each other, each of the exchange sites will charge you a particular commission on the wagers you place and take in the betting market.

The commission percent on the bet is usually around .5% to 1% of the wager.

Most exchange betting sites will only charge commissions to winners of the bets.

Others, however, charge commissions on both sides of the bet, meaning both the loser and winner pay some percentage.

Best Betting Exchanges

The best betting exchanges offer the following.

• Liquidity
  We keep coming back to this, right? Liquidity is king.
  I can’t stress that enough.
  The more liquidity, the more options for us as sports gamblers.
  But, and this is big, the more liquidity also means there’s a chance of much tighter spreads or a tighter range of odds on a horse race.
  Still, without liquidity, we can’t place bets.
• Plenty of gamblers and bookmakers
  The exchange should have plenty of gamblers and bookmakers.
  All those gamblers and bookmakers ensure fairness of odds.
  Bookies that compete for our business are likely to offer us better odds than a traditional sportsbook.
  But also remember that the bookie can’t and won’t price themselves out of profit, meaning they won’t give you the absolute best odds possible, which means buying points as an example on an online sportsbook could be better for us than wagering on an exchange.
• A proven track record
  Betting exchanges that have history are more capable of providing the best service to both gamblers and bookies.
  It goes without saying that fly by night betting exchanges should be avoided.

If you want to give exchange betting a shot, make sure to do your homework and find the betting exchange that will work for you.

Don’t go head first into the exchange betting pool.

Learn how exchange betting works by making a few wagers.

Then, if it’s something for you, increase your wagers.

Don’t forget that placing large bets might be difficult.

Bookmakers on betting exchanges mustn’t take your wager, which means you could spend an inordinate amount of time looking for someone to accept your bets.

Get a feel for how it works and then decide if exchange betting is right for you.

Conclusion on Betting Exchanges

Interesting and profitable as it is to make exchange bets, back betting and lay betting are equal parts of one another, so you can’t have one without the other.

You therefore have to be ready to sell what others want to buy, or be able to scope for good bets to lay against if you want to succeed or profit from exchange betting.

MyBookie’s Sportsbook Betting Guide | Online Betting Exchange

Since you now know how to Betting Exchange work, now check out more about learning online betting found at MyBookie’s Sports Betting Guide.
Time to increase your online sports betting knowledge and know what you are doing when bet on sports through online sportsbooks.

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