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BETTING EXCHANGES EXPLAINED
Part of Trade Ninja "EXPLAINED" series!
Trade Ninja “EXPLAINED” series aim to help explain some popular Betting / Trading terms/areas.
Betting Exchanges
Betting exchange sites are online platforms that allow users to bet against each other instead of against a bookmaker or the house. Here’s how they typically work:
- Users sign up for an account on the betting exchange site and deposit funds into their account.
- Users can then browse the available markets and odds, which are determined by other users placing bets.
- Users can place two types of bets on a betting exchange site: “back” bets and “lay” bets.
- A “back” bet is a traditional bet, where a user bets on a particular outcome to happen. For example, if you bet on a football team to win, you are placing a back bet.
- A “lay” bet is the opposite of a back bet, where a user bets against a particular outcome happening. For example, if you bet against a football team to win, you are placing a lay bet.
- When a user places a bet, it is matched with another user’s opposing bet. For example, if one user places a back bet on a football team to win, another user must place a lay bet against that team to match the bet.
- The betting exchange site takes a commission on the winnings of the winning user, which is typically a small percentage of the total winnings.
- Users can also trade bets on the betting exchange site, by buying and selling bets before the event has finished.
Betting exchange sites offer users more control over their bets, as they can set their own odds and bet against other users. However, users also take on more risk as they are betting against other users, rather than a bookmaker who takes on the risk.
Current UK Betting Exchanges
BetConnect
BetDaq
BetFair
Matchbook
Smarkets
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