Online gambling has exploded in popularity over the last decade. With so many options to choose from, like online casinos, poker rooms, sportsbooks and more, Wazamba players are spoiled for choice. One of the more recent additions to emerge are betting exchanges. But what exactly are they, and how do they work? This comprehensive guide will provide an overview of betting exchanges, their advantages and disadvantages compared to traditional bookmakers, as well as tips for getting started.
What is a Betting Exchange?
In simple terms, a betting exchange is a marketplace that facilitates betting between peers or groups, rather than a bookmaker setting odds and taking bets. Some of the most well-known exchanges include Betfair, Smarkets and Matchbook.
On a betting exchange, gamblers can take on the role of traditional bookmakers by offering or “laying” odds on sporting events and other markets. Conversely, they can also “back” odds previously offered by others. The exchange simply takes a small commission on winning bets.
This peer-to-peer structure offers a number of advantages over conventional bookies:
- Better odds – With no profit margins or overheads to maintain, exchanges often have better odds. Backers can find odds up to 20% higher.
- Wider variety of bets – Exchanges allow betting on niche markets that traditional bookies avoid.
- Transparency – All bets are visible in the exchange order books.
However some disadvantages do exist as well:
- Less liquidity – Less overall volume on exchanges, which can make cashing out big wins more difficult.
- Risk of losing all stakes – When laying odds, a gambler can lose far more than their initial stake if their odds are taken.
- Complex interface – Exchanges have a steeper learning curve.
Now that we’ve looked at some basics of what exchanges are, let’s explore actually using them for online gambling.
Getting Started on a Betting Exchange
The first step is choosing an exchange and signing up for an account. As mentioned earlier, the top options are Betfair, Smarkets and Matchbook. Each has their own pros and cons regarding liquidity, fees, interface and supported markets. Do some research to decide which platform best meets your needs.
Once registered, you’ll need to deposit funds. Most exchanges support all popular payment methods like credit cards, e-wallets and bank transfers. Some may even offer bonuses matching a percentage of initial deposits up to a certain amount.
With money in your account, you can now back or lay odds on your chosen events. Let’s look at both options:
Backing Odds
This works similarly to betting with a traditional online sportsbook. You browse upcoming events and choose odds to bet on at the stake amount you wish. If your selection wins, you keep the entire winning amount minus the exchange’s small commission.
For example, you could bet $50 on the Los Angeles Lakers at odds of +120 (2.2 decimal) offered by another user to win $100 (less commission). If the Lakers win, you collect that amount. If not, your stake goes to the person who laid those odds.
Laying Odds
As mentioned earlier, this reverses the bookmaker role where you actually offer odds for other gamblers to back. You are betting against an outcome occurring rather than on it.
However the risk here is that you can lose far more than your initial stake if someone does decide to back those odds and that outcome hits.
For example, you may believe the Boston Celtics have no chance tonight and decide to lay odds of +550 (6.5 decimal) with a $50 stake. If someone bets against you and Boston wins, you now owe that person their $275 winning payout.
So laying odds is riskier but can also earn nice profits if used properly by more advanced gamblers.
Betting Exchange Strategy Tips
As with any form of gambling, success requires applying the right betting exchange strategy. Here are some top tips:
- Specialize – Pick one sport to focus on rather than jumping randomly between events. This allows you to get better at predicting outcomes.
- Line shop – Compare odds across multiple exchanges and sportsbooks to find discrepancies. This can reveal “value” bets with better odds of winning.
- Keep detailed records – Tracking your betting activity is crucial for identifying mistakes and improving over time.
- Manage your bankroll – Set a gambling budget and stick to it. Never chase losses by over-betting as this is a recipe for disaster.
While exchanges may seem complex at first, with some practice they offer a fun and unique way to wager online. Just take time to learn the interface properly, use sound strategy and bet responsibly.
Before long you’ll be leveraging the advantages of exchanges to make better bets than traditional online bookmakers could ever offer. So sign up today and see for yourself!