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What is Betting Exchange and How Does it Work?

We have a very interesting article for you today. We’re sure all of our readers are familiar with sports betting. But have you ever heard of a betting exchange?

To be honest, it’s very similar but with one major difference. In a betting exchange, you’re not betting against the sportsbook. So, what is exchange betting? Keep reading to find out.

What is Betting Exchange?

In exchange betting, you don’t place your bets against the sportsbook. Instead, you place your bets against other bettors. You can also offer odds and request them from your fellow betting enthusiasts.

This type of betting involves a much lower degree of risk for the sportsbook. This is because punters can take small commissions on bets that they’ve taken on the exchange platform. So, the sportsbook isn’t wagering any money against bettors in this arrangement.

betting exchange

How Does a Betting Exchange Work?

There are definitely distinctions between regular sports betting and exchange betting. But the very basic concept is the same; you place bets against an entity and if you win, you make a profit.

The entity is replaced by another bettor in exchange betting. So, you, as a bettor, can give out odds and place bets against another bettor.

But exchange betting also allows lay betting. This is where it gets exciting. Lay betting is when you can place your bet backing the losing outcome.

Lay betting is why exchange betting works, since two punters in this situation are allowed to back the opposing outcomes. So, let’s say you’re placing a bet on Rafa Nadal to win a tennis men’s single with odds of 10/1 with a stake of $ 10.

For this bet to work in a betting exchange, you’ll have to find someone willing to place a bet worth $ 100 with odds of 1/10. The bet works because each bettor is backing a different outcome, exactly like a lay bet.

What is Betting Exchange – History 101

The concept of exchange betting is quite unique. So, you might wonder how the concept came to be. Betfair was actually one of the very first exchange betting platforms.

Betfair is a British sportsbook and online casino. It also holds the title of the worlds largest betting exchange at the moment. Flutter was another of the first movers in the industry. And eventually, in 2001, the two companies merged to create what Betfair is today.

The Betfair betting exchange concept was initially developed around betting on horse races. Since the idea of exchange betting was such a shock to the system, Betfair chose a unique way to market it as well.

Betfair launched in the year 2000 and around the same time performed it’s very famous marketing stunt. The platform paraded through the streets with a coffin that read “Death of the Bookmaker.”

And it truly was. Betfair’s popularity and flow of customers skyrocketed. And eventually the company merged with flutter which brought even more customers.

Since then, there have been many more exchange betting platforms. But none as popular or beloved as Betfair.

betfair exchange

What is a Sports Betting Exchange Platform?

At this point, many of our readers have probably caught on. But the concept of exchange betting revolves primarily around a platform.

Although the bet is placed between two bettors, the exchange works as a platform to bring them together. It also performs the role of a mediator in case one is required.

Are Sports Betting Exchanges Safe?

One issue that a lot of punters might have with exchange betting is the degree of safety and fairness it provides. But most betting exchanges comply with the Responsible Gambling requirements.

And having a betting exchange as a third party between your bets is also a way of making sure the ordeal is fair. If you’ve ever placed a bet at an exchange, you might’ve had questions regarding the other party in your bet.

It could be very easy for someone who is a part of the sporting event to participate and profit from exchange betting. Since these people might have insider information, it pretty much guarantees a loss for regular bettors.

And to be quite honest, there is no way to fully know. What you can do is visit platforms that are transparent and well-known in the industry. If there is ever any doubt regarding the authenticity of a punter, a genuine exchange is likely to investigate the issue.

Most platforms also have deals with sporting organizations. These deals are in place in order to give the sportsbook early access and privileges in case there are any issues.

If you’re planning on visiting a betting exchange, we recommend ones that are licensed and popular. You can verify the licensing information yourself and also look at reviews online.

A licensed and vetted sportsbook is more likely to ensure your safety as a customer.

Types of Bets in a Betting Exchange

At this point, we hope we’ve answered the question of “What is betting exchange?” or “What is exchange betting?”

In this part of our article, we’ll explain a bit about the types of bets in a betting exchange.

Lay Betting

Lay betting is when a bettor is backing the negative outcome of an event. In this type of bet, the bettor is placing a bet on the outcome not happening.

Let’s look at the age-old rivalry as an example for this one. If there is a football match between Manchester City and Manchester United, each punter will be betting on a different outcome.

So, for a lay bet, you might bet on Manchester United not being able to beat Manchester City. Now for you to win the bet, the outcome needs to be either a draw or a loss for Manchester United.

Back Betting

This may as well be the exact opposite of a lay bet. Here, punters are backing an outcome to occur. So, you’ll be placing your bet for an outcome to happen.

Let’s go back to that other example. In the same match, for a back bet, you’d be betting on Manchester United winning the match against Manchester City. So, the only way you would win this bet is if Manchester United won and Manchester City lost.

Live Betting

Live betting or in-play betting is actually said to have originated from betting exchanges. An exchange allowed punters to exchange odds during the event while sportsbooks had already closed their books.

Just like regular in-play betting, these bets can be placed in a betting exchange. They’re not entered into a system beforehand. Instead, punters place their bets as the match is taking place and they can adjust their odds as well.

Ready to Get Started Yet?

Now that you know everything about exchange betting, why don’t you try your hand and see for yourself? But remember, always opt for a reputed and licensed casino to avoid any misfortunes!

 


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