It cannot be denied that the advent of betting exchanges changed the sports betting industry’s landscape completely. Their introduction not only posed several challenges to the conventional online casino and bookmakers, but ultimately forced a large number of them to alter their operation methods, and transform the way they had been working for many decades. An online casino cum bookmaker could no longer be satisfied with just a handful of casino game offerings such as slot machines, roulette tables, poker variants, craps, baccarat, blackjack and others, it also had to pay good amount of attention to its bookmaking business, and take it to the next level.
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While on one hand some big betting industry giants tried to impose outdated off-line business models on the new online casino and bookmaking world, it wasn’t until the introduction of betting exchanges that they completely understood and appreciated the possibilities and potential that lay in the online sports betting world.
One can safely say that if it weren’t for the betting exchanges, we’d have never witnessed anything on the lines of in-play betting, cash out trading feature and competitive betting odds. The betting market would’ve also not expanded the way it has in the modern times.
How betting exchanges affect bookmakers
As the popularity of betting exchanges reached new heights, the basic dynamics on which they operated also witnessed many challenges, attracting plenty of criticism, unsurprisingly from the entities who had a vested interest in conventional bookmaking model. If you pay attention to what Ralph Topping of William Hill had to say about Betfair during its early days, he had referred to it as some secret society promoting all sorts of unethical gambling methods. On the other hand, Sean Boyce of Ladbrokes had raised concerns regarding the competitive pressures placed by Betfair on odds provided by conventional bookmakers.
Considering the large amounts of money that used to be bet through betting exchanges, neglecting the conventional betting shops, it became a major worry for the traditional funding models of the United Kingdom’s racing history. Many key industry players started thinking that Betfair as well as other major betting exchanges posed a major threat to the financial future of United Kingdom’s racing industry, not to forget the perceived threats to the integrity of the sports themselves. Many even called out for betting exchanges to be banned. The ability of laying the horse, i.e. betting against it, was a major problem with the industry insiders who were concerned that it’ll greatly undermine public confidence in horse racing.
What all can be bet on at betting exchanges?
Considering the way betting exchanges have grown over the decades, the diversity and number of markets offered by them has also witnessed a tremendous boom. Betting exchanges of the modern times offer the same depth and breadth of the available markets, as are offered by some of the leading bookmakers of the sports betting industry.
However, it must be kept in mind that even though there are many markets available, there’s no guarantee when it comes to market liquidity. Entities like Betdaq, Matchbook and Betfair have all sorts of liquidity levels on the major European football leagues. While there’s high liquidity available in leagues like Champions League and English Premier League, particularly ones comprising of popular football clubs and televised matches, the same may not be the case in lower leagues.
The same way, the liquidity levels in the UK horseracing industry is equally fair, although it can rise quickly in the days and hours leading up to the race day and race time. It may be hard for you to have your lay or back bet matched during the early morning trading hours.
On the other hand, if you prefer trading or betting on the US-based sports events, then Bet365 and Matchbook should be your ideal bookmakers and betting exchange respectively. Although the market menu of Matchbook may be limited when compared to other betting exchanges like Betfair, it definitely offers high liquidity on US-based sports events like MLB, NHL, NBA and NFL.
Please note, if you wish to place online bets via Bet365, you must visit, which provides detailed info on this bookmaker and bonuses offered by it.
How betting exchanges work?
For anyone who’s only familiar with conventional bookmakers, he may find betting exchange format slightly confusing to start with. However, once you come to terms with the differences, the vast number of opportunities, both for trading and betting purposes, will become increasingly visible. Furthermore, you may find betting exchanges far more profitable if you become a savvy trader. These exchanges enable any imaginative and shrewd punter to easily lock in good profits, even before the end result becomes apparent!
Although an online casino or bookmaker provides you the opportunity of placing regular bets with it, betting exchanges allow sports bettors to wager money against other bettors, with betting exchanges functioning merely as a mediator or facilitator between the two.
The basics of betting exchanges
Confused already? You shouldn’t be! Let’s look at it in a different way. Let’s say you’re sitting with your best friend, watching your favourite teams locked up in a football match. You believe that Manchester United vs. Liverpool match will end up with minimum 3 goals scored (in total). However, your friend isn’t of the same opinion and expects it to be a low scoring affair. He readily offers you even money odds on the possibility of maximum 2 goals scored in that match.
That bet sounds profitable to you and both of you agree to a wager of £ 20.
Now, if this match results in 3 or more goals, you’ll win that bet and claim £ 20 from your friend. However, if there are 2 or less goals scored in the match, you’ll lose the bet and will need to pay £ 20 to that friend. Sounds familiar? Obviously! We have all placed such bets many times against our friends.
Well, that’s exactly how betting exchanges operate, matching the sports bettors with opposite views on any particular result, who then get into an agreement on both odds and stakes, through the betting exchange.
A simple example – Liverpool to win the English Premier league
Many regular betting exchange users feel that these platforms give them excellent opportunities of ‘laying’ as well as ‘backing’ a certain result. How are these two different?
The difference is the key and is exactly what brings in a lot of dynamism into betting exchange based punting activity.
When you back a specific outcome, you’re basically betting on the possibility of a particular outcome. So, you think that Liverpool will actually go on to win the English Premier league this year? If yes, you back that possibility at the odds being offered at the betting exchange, just like placing a bet with any conventional bookmaker.
However, what if you’re of the opinion that Liverpool has no chance of winning the English Premier League this season?
A major way in which betting exchanges differ from bookmakers like Bet365 and others is that they provide you with the opportunity of ‘laying,’ that is betting against a particular outcome, which in this case is Liverpool winning the English Premier league. The same can be done with any sports betting market available at the betting exchange.
So when you lay a bet on Liverpool, you essentially assume the role of a bookmaker, just like Bet365 providing odds on Liverpool winning the English Premier League and hoping that some other sports bettor on the betting exchange would like the odds set by you on that possibility, agreeing to back the team and placing a bet on them.
It’s very important to understand and appreciate the differences between laying and backing an outcome, as well as the dynamism that it brings to the sports betting industry, particularly when we talk about in-play betting. The ability of laying as well as backing a particular outcome is the main appeal of betting exchanges, giving customers the flexibility to operate either as a bookmaker or a punter. Actually, you can liken it to a stock exchange, where traders regularly sell and buy shares, on the outcomes of sports events.
Finding value bets on betting exchanges
The core principles remain the same regardless of whether you try identifying value at a conventional bookmaker or at a betting exchange; the betting value is said to be found whenever you’re of the opinion that the chances of an outcome are higher than the chances of that outcome reflected by the offered betting odds. For instance, even money odds of 2.0 reflect a 50% chance that a particular outcome will happen. However, if in your opinion, the chances of that outcome happening are actually 60%, the 2.0 odds can be considered a value opportunity. It’s very important to familiarise yourself with the concept of value betting if you’re planning to venture into the betting exchanges’ world.
Many sports bettors firmly believe that it’s almost the same when you try to find betting value at a conventional bookmaker and when you do it at a betting exchange. These cynics believe that although the method used by betting exchange users for value identification may differ from that which is used by bettors at conventional bookmakers, for instance, trying to locate value in in-play trading, against focusing on pre-match betting, the possibility of actually being able to identify value remains largely the same.
Talking about this aspect, the markets available at betting exchanges are pretty efficient. Putting it another way, the offered odds are normally a very good reflection of the likelihood of a particular outcome actually occurring.
Simply because the odds on offer at a betting exchange are set by none other than thousands of active users, using their personal opinion, placing and then accepting bets from other betting exchange users, whereas in case of bookmakers, the odds are largely set by the bookmaker himself, based on his own opinion about the possible winner of a particular match, for instance, by adjusting prices according to the accepted bets.
Furthermore, it’s also actively argued that odds available at a betting exchange, particularly with respect to high liquidity markets where thousands of bets are matched (and inputs are received from some of the sharpest traders in the business), more accurately reflect the actual possibility of a given outcome. Hence, these markets are believed to be more difficult to beat and are more efficient in the long term, as many bookmakers keep close tabs on odds movements at popular betting exchanges like Matchbook and Betfair. Simply put, betting exchange odds are set as a result of balance of opinions, and in a way lead to creation of what can be considered as a perfect price.
While many betting exchange users may readily agree that how odds are set at betting exchanges greatly differ from how they are devised at any online casino or traditional bookmaker, for instance Bet365 etc., they might not agree that it’s impossible to find value bets on betting exchanges. All such savvy traders firmly believe that betting exchange markets, especially the in-play markets provide ample opportunities for anyone willing to do his share of due diligence, and learn from his mistakes.
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Although several sports bettors can pretty accurately assess the true chances of West Brom beating Chelsea in a particular English Premier League match, how many bettors do you think would be truly able to assess the chances of West Brom causing an upset if they go up 1 – 0 withe first 15 minutes of play? What’ll be the chances of a draw in such a situation? What’ll be the chances of West Brom bouncing back and scoring a win? What’ll be the chances that the match may actually end with over 3.5 goals?
These are all places where traders may argue that value can actually be found, particularly when it comes to certain leagues or markets. These traders not just develop the ability of correctly predicting the outcomes of matches or who might score the next goal, by actively trading in all these markets, but more importantly they cultivate a very solid sense of predicting how a market may react. In fact, in most cases these traders are simply playing the markets. They’re well aware that an early goal scored by West Brom may attract over reaction from the market, with Liverpool’s odds getting slashed, and no matter how unlikely it may seem, the chances of Liverpool winning the match are much higher than what’s reflected by the odds. This is actually the essence of betting exchange trading activity, and it’s also where several seasoned traders manage to find valuable opportunities!
Identifying value at betting exchanges is nothing different from how it has always been, with a little more stress on the specialisation aspect. So, anyone wanting to confidently and successfully trade in markets offered at betting exchanges, must understand and appreciate the importance of specialisation. In fact, a large number of traders focus only on one particular market and/or league.
For instance, a good number of traders only focus on English Premier League’s goal totals market. All these traders’ operations are solely focused on English Premier League matches, and the number of goals scored in each one of them. Their years of experience makes them confident enough to know how markets will react to goals at different stages of the match. These traders happily sit and wait for all such opportunities to emerge on their own, all this while creating complex trading strategies which enable them to enhance value in all these opportunities, while limiting their liabilities. Other traders may focus only on WTA tennis, 20/20 cricket, English horse races etc. It’s all about specialization!
So, the key to identifying value at betting exchanges is nothing different from what it has always been. You simply need to focus on specific sports markets and leagues, learn about them, make mistakes, pick yourself up, adapt and continue learning.