What are Betting Exchanges?
Betting exchanges
online were only introduced a few years ago, by
British firm Betfair and have grown so rapidly,
that they now, not the bookmakers, set the prices
for most sporting events. The bookmakers have to
consult and respond to what is happening on the
exchanges. Even if you have never had a bet on the
exchanges, you should be very happy about their
existence. A visible example is the prices on
offer in British horse racing, whereas at one time
it was most unusual to see an outsider at odds of
more than 33/1, but now many runners are returned
with starting prices of 66/1+, this is entirely
due to the exchanges. Not so obvious is the day to
day tightening of percentages on all betting
events which benefit all punters. Despite this you
can still get far better odds on the exchanges,
typically 20% better according to the exchanges
themselves.
Betfair is the dominant betting
exchange, with Betdaq a good alternative. There is
very little competition - is this a bad thing?.
Absolutely not. If you think about it, the best
exchange is going to be the one with the most
punters, both bettors and layers. The exchanges
don't actually do anything!. They just open the
doors and maintain the site, but it is up to the
people who enter and participate to create
everything themselves.
How do you Bet?
You can back anything on the exchanges, you
can lay anything on the exchanges and you can back
and lay the same selection. In fact this is the
best approach, if you can back a horse ( we will
use horse racing in most examples, but could be
any sport) at, lets say 12.00 (11/1) and then lay
a horse at, lets say 9.00 (8/1), you are now in
the happy position of not being able to lose. Lets
say you bet in $10 units (you can have much
smaller, or larger bets if you so wish), so if the
horse wins, you will win $110, but of course you
have to pay the person who bet the horse at 9.00
with you. In this example you win $110 and pay
$80, meaning a profit of $30. If the horse loses
it has cost you nothing, you bet $10, you layed
$10, and in effect you have had a free bet!. Don't
worry about trying to keep track of your bets, the
screen will automatically show you what your
liabilities are for each horse - green for profit,
red for loss. Also bear in mind that the exchanges
have to make money somewhere and they charge
commission on winning bets, nothing on losing
bets. The commission is usually 5%, but this
figure falls as you accumulate loyalty points. For
presentation purposes decimals are used for
prices, this allows the minutest of price changes
to be catered for, but it is awkward at first for
punters who are used to fractional odds, but you
soon get used to adding your stake into the prices
displayed. Some examples: 10.00 = 9/1, 14.00 =
13/1, 4.5 = 7/2, 2.1 = 11/10 etc.
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