Online betting exchanges are becoming popular because of the low commissions and excellent odds, meaning you can maximise your winnings by using them.
An online betting exchange is basically a broker who acts between individual punters for the placement of bets. Betting exchanges charge a commission which is calculated as a percentage of net winnings for each bet on any event/market. They allow you to place unrestricted size bets, as long as there is someone willing to match the bet.
Research has shown that a betting exchange will offer you odds on average about 20% better than with traditional bookmakers. Allowing you to bet in real time, options for bets include horse racing, golf, football, motor racing, cricket, golf, tennis, snooker, darts, Major League Baseball, NHL hockey, NBA basketball, boxing, and greyhound racing.
One of the main benefits of a bettng exchange is the option to lay an outcome, in other words to bet that a participant will lose rather than win. You can see that this is placing you in the position of bookmaker, and is a critical concept to understand if you have any intention of seeking out arbitrage bets where you can't lose.
Any bet that takes place on a betting exchange therefore needs a backer and a layer. The layer bets the participant will lose, the backer says it will win. As an example, if you were laying one horse in a race it is just the same as backing all of the other horses to win.
Exchanges have revolutionized the market of sports betting in the UK and worldwide and have taken a large market from traditional bookmakers. Operators such as Betfair, Betdaq, and others are leading this change, with Betfair recently opening the first US betting exchange which is initially intended to serve New Jersey residents. Other US states will no doubt follow.
Security on the betting exchange sites is strong, with the top sites using processes to protect your money. You'll only be able to place a bet, and have someone accept it, if there is enough money in both accounts to cover the bet.
Betfair is one of the biggest betting exchange sites. Since starting in 1999, the UK online sports betting exchange has grown massively. The beauty of the company's business model is that it does not risk its own money providing betting odds. Instead it simply matches up punters anywhere in the world.
Stories of how these punters have won and lost a fortune on Betfair are now legendary. One of the most famous is that of racehorse Kicking King. A few weeks before the Gold Cup, it was reported that Kicking King was a non-runner following a 'dirty scope' - where a camera is put down its throat to check its lungs and identifies a problem. This led to a massive drift in the betting price. Five Betfair punters placed bets on the horse at massive odds of 999-1. After a remarkable recovery in its health, Kicking King lined up on the day and romped home victorious. One customer, who bet just £25, won £25,000, while another was £10,000 richer on a £10 bet.
Exchanges are hugely popular, but another way of betting on football has recently been launched. This is where you can buy shares in footballers for sums of up to around £5, and then watch as their values rise or fall. Essentially this is a form of football stock exchange, and for a low buy in it looks like the idea could grab a lot of attention.