You may have heard the term betting exchange banded around, but what is it, how does it compare to a regular sportsbook, and which is better?
With a sportsbook or “bookie” you are betting against the bookmaker. They set odds as they see fit and pay you out of there own pocket if your bet wins. If your bet loses the money goes to the bookie. This is the traditional style of bookmaking.
Bet’s are almost always placed to win, and can often be combined with other bets for bigger payouts (provided that they bets are not specifically related). Sportsbooks also tend to offer free bets and promotions – such as getting your money back on a half-time/full-time bet on a football match if the end score is 0-0.
A betting exchange allows people to bet against each other, rather than a bookmaker. In order for this to happen there must be two types of bet – backing (to win) and laying (to lose). In this scenario it is possible to bet on a team to lose – so if you don’t know who will win the World Cup, but you know it won’t be England, you make the appropriate bet.
In an exchange the odds are set by the people, and in theory you can set any odds you want. But for the bet to be live, it has to be matched by people who wish to bet on the opposite outcome – ridiculously low odds are unlikely to be matched by anybody. If the odds you are setting already have a counter bet, the bet is immediately accepted.
Betting exchanges make their money by charging commission (usually around 5%) of the winning bet. Because of this, betting exchanges tend to have the best odds, although they tend not to offer promotions in the same way that a regular bookmaker would.
The first large scale betting exchange was Betfair which was founded in June 2000, however Betdaq has been giving them a run for their money lately – especially since they have a lower 3% commission.
Which Is Better?
Choosing between a sportsbook and a betting exchange really depends on the person. If you like to place accumulator bets, or multiples, and have a penchant for free bets and promotions then a sportsbook is probably for you.
However, if you like to straight bet on one outcome at a time, or want to bet against a team or horse, then a much better deal can be found at a betting exchange.