Betting ExchangeThroughout the history of betting it has been a constant battle fought between punters and bookmakers. For years it’s been a situation where punters sit at home looking up the form in the morning newspapers trying to find the selections that will win them their fortune. Then they go to their local bookmakers or go online and place their bets. The bookmakers in return create the markets that the punters bet on and set the rules that the punters have to abide from.  We’ve all seen the poster in the bookies that sets out the rules and probably no one has actually managed to make it to the end because there are so many rules set out.

Everything changes in the long run though and now we have the betting exchanges which mean it’s no longer a battle between punters and the bookmakers. In a way you could say civil war has broken out because with the exchanges it’s punter v punter.

The punter becomes the bookmaker, though probably without the flashy car and the holidays abroad that all bookmakers seem to have.  It’s a whole new world and one that has become incredibly popular in recent years. How bets are placed is different from when using traditional bookmakers. You are able to not just request your own odds on markets as well as placing bets at the odds offered.With the exchange, the punter can offer odds on not just what will happen in events but also on what won’t happen.

The History of Betting Exchanges

Betfair launched in 2000 on the day when most punters were trying to work out who would win the Oaks which was taking place the same day. Just 36 punters struck bets on the Classic but since then the exchanges have grown massively in popularity.

It’s not just the fact that punters can bet against each other but Betfair allowed them to bet on events once they had started, especially in horse-racing.  There had been some experimentation with in-running betting but with Betfair you could bet immediately at the click of a mouse.

It was with horse-racing that Betfair initially concentrated and changed the way in which gambling takes place especially online. People place bets against total strangers as they strive to make a profit. Another significant feature is the fact you can bet against something happening while setting their own odds.

So why did the betting exchange become so popular? Well some punters had become fed up of the fact that sometimes they found it hard to have their bets accepted and that increased the frustration that many punters had with having bookmakers as their opposition. With the exchanges they found that there were lower margins against the punter than when they placed their bets with the traditional bookmakers such as Ladbrokes and William Hill. All of a sudden the punters became the bookmakers and they soon grew to love it.

Punters were used to odds compilers creating the initial prices for events, this is known as ‘the tissue.’ Betfair, with their exchange, supplied the tissue and then the punters took over as they offered backs and lays on the site.

It pays now to become an expert on the way a market will move. It’s punter v punter so you can often use your own betting patterns to your own advantage. This can enable you to work out which horses are likely to be backed simply because some punters have a record of betting on particular jockeys and trainers and some that they simply never bet.

So how does an Exchange Work?

Once you have opened an account with an exchange you’re ready to go. After all those years of battling against the bookmakers it takes a little bit of getting used to the new challenge you now have as you take on fellow punters rather than bookmakers.  You choose an event that is of particular interest to you and as before you will see the competitors but with six columns of prices next to each of the entrants. The first three, reading from left to right, are the ‘back’ prices with the biggest price available situated at the far right. Underneath will be the amount of money on offer at that price. The next three sets of prices are the ‘lay’ prices with the one on the left showing the shortest price being asked.

Getting a bet matched is really important and the closer you request your odds to the current trading price then the more likely it is your bet wil be matched by another punter. If you fail o do this before the event starts then your bet is void and your stake is returned to you.

For example, the odds on Everton beating Manchester City are 2.8 to back and 3.0 to lay. If you wish you can simply bet on Everton at 2.8.  However you could decide that you want to offer to bet at 2.9 hoping another punter will come along and decide to match your bet. The higher odds you request, the less likely it is that your bet will be matched. Punters who wish to lay Everton will decide to take the lowest odds requested first.

The closer you request your odds to the current trading price the more likely it is that your bet will be matched. Failure to have the bet matched before the event begins means the bet is void and the stake you have made will be returned to you.

Laying is betting on something not to happen. Say you don’t think Everton will beat Manchester City, you therefore decide to lay Everton. This means that if Manchester City wins the match or the game ends in a draw then you will win because those results mean Everton haven’t won the game.

Looking at the odds Everton are 2.8 to back and 3.0 to lay. You lay €50 at 3.0 so if someone else bets on Everton and they go on and win the game then you lose your bet and have to pay them their winnings which totals €100 (3.0 is the decimal version of 2-1 in fractional odds).

If Manchester City win the game or it’s a draw then your bet on Everton not winning is right. You therefore win the €50 that the other punter staked. So in this example you’re risking €100 to the chance of winning €50.


Another element of the exchanges is the option of trading. Here you can place bets that ensure at the end of the day you are going to come out a winner and that’s never a bad situation to find yourself in.

Again this is a situation that is totally different from when you take on the bookmakers and it’s one that takes a bit of getting used to. This is where predicting market moves really comes into its own. You can place a bet in an ante-post market at a high price and then have the good fortune of seeing it plummet in price. You can then lay your original selection and still be able to make a profit if it goes on and loses.

Advantages of Using Exchanges

Better Odds

Whether you are taking on other punters or the bookmakers you always want to find better odds. This gives you the chance to win more money which really is the name of the game after all.

Exchanges claim that they offer on average 20% better odds than the traditional bookmakers. Now that sounds a great fact but it can be argued that it’s not an entirely accurate figure. Most short priced competitors will be around the same price on the exchanges as with the traditional bookmakers. It’s the larger odds, especially those over 10-1 that seem to be higher on exchanges. Remember to always check the available odds on sites such as oddschecker. com.

Market Warning Signs

Watch out for those market moves because the way they happen on exchanges can often be used to reveal information that isn’t perhaps in the public domain. If horses are being backed down in price on the exchanges then it’s very likely they will run a big race. If the opposite occurs and a price lengthens then the chances are something might be amiss and the selection will run a disappointing race when the event takes place. This can’t be guaranteed though, how many times have you seen a horse backed as if defeat is out of the question and then it fails to win. And how many times does a horse drift in price and then go and win the race!

The Ability to Lay Bets

Being able to  lay bets is a major advantage of betting on the exchanges. Betting on something to lose really opens up a lot of new opportunities to make some good money. Say you are betting on a golf tournament and place bets on three players to win. You can also lay some of the other players so if one of your selections wins the tournament then you don’t just win on them but there’s also profit heading your way from the player(s) you chose to lay because obviously they didn’t win the tournament.

Betting In Running

Betting in running is something that is relatively new and really makes betting interesting. In the past as soon as an event began that was it as far as betting was concerned. Now you can bet on a horse race throughout the course of the race. As you can expect the odds offered will be constantly changing as the chances of a horse winning go up and down. A bad jump that causes a horse to lose a few lengths will see the price go up. A good lead early on for a horse that has great stamina can see the price drop.

Be careful though, things can change very quickly in sport and something that looks as if it is going to win can soon lose that opportunity.  There have been many examples where a horse looks as if it has the race won and then either tires and gets pipped at the post or falls at the last fence.

Disadvantages of Exchanges

There aren’t always Better Odds

This claim that the odds on Exchanges are 20% better is an average so can’t totally be trusted. Higher priced selections will increase that average. Again check all the available prices before deciding just where you want to place a bet.


With exchanges so much depends on what the other punters are offering. On some smaller events or sports that aren’t as popular as others, there may be very few odds available.

For example, you see odds on Arsenal at 2.5 but the amount of money available at that price is only €5. The next best price is 2.46 where there is €10 available. So if you wanted to bet €40 on Arsenal you can only match €5 at 2.5 and the rest at 2.46.

Unmatched Bets

Keep an eye on all your bets, especially if you are placing several at the same time. It’s not uncommon to forget about some unmatched bets you may have put up. If the situation changes in an event due to there being non-runners or fallers if betting in running, the odds you have put up may suddenly become very attractive.  Someone may suddenly match those odds before you can react and cancel your bets. For example, you lay a horse at 14-1 and then two more favoured runners fall or are pulled up.  That 14-1 shot is doing ok and has a decent chance of winning.  If you still have that 14-1 available and forget about it you could be in big trouble if someone suddenly matches your bet.

Bets are sometimes cancelled though to protect the punter from this. Any pre event market will be closed when the event begins and all bets cancelled with a new market potentially started for in-running betting.


You might be asking yourself if it’s punter v punter, how does the bookmaker make any money.  Well the answer is that they charge commission; this is usually 5% of winnings. The rate will decrease the more you bet with exchanges but to do this you need to be placing several bets on a daily basis.

It can sometimes be difficult to work out what the real odds you are getting once commission has been applied. On the ValueChecker site this is made easier as the prices given for exchanges takes into account the commission due. If your rate is different from 5%, simply adjust the settings.

For example, if you bet €20 at 5.0 then your return is €100 before commission. At a rate of 5% then the commission paid will be €5 leaving you with €95.

A Whole New World on the Exchange

Betting on an exchange is a whole new world for the punter. All those years taking on the bookmaker are consigned to history when you start betting on the exchanges. Instead of taking on the bookmaker you are battling against your fellow punters. Bookmakers still make some profit though but through the commission that is charged.

Basically then you become the bookmaker and it’s a situation that takes a bit of getting used to.  That’s why we have produced this guide for you that shows just what is needed to have a successful time betting on the exchanges. This is a whole new world and it’s not a case of just sticking €50 on the favourite at 2-1 and hoping it wins you €100. How bets are placed is different from when using traditional bookmakers. You are able to not just request your own odds on markets as well as placing bets at the odds offered.

In this video you can learn the basics of betting exchange explained by Betfair:

Getting a Matched Bet

The closer you request your odds to the current trading price the more likely it is that your bet will be matched. Failure to have the bet matched before the event begins means the bet is void and the stake you have made will be returned to you.

What is Laying?

All these years you have been betting on selections to win. Well with laying a selection it’s the opposite situation, Here you bet on a selection not to win.

Being a layer on an exchange isn’t the easiest of tasks. If you decide to lay several competitors in an event it’s going to be difficult to ensure you can do so and still make a profit. That’s when you discover how difficult it can be being a bookmaker. This is why most punters on exchanges will only lay one or two selections in an event.

One advantage the layer does have is that markets are rarely static. Prices are continually changing so that gives you the chance to pick and choose when to lay. It’s common to lay either the favourite or another selection that is high in the betting market. The layer may well be of the opinion a certain selection isn’t going to win but if the selection is short-priced then there will be no shortage of punters out there who think the exact opposite.

Knowing the market is really important. You may see a selection that is priced up at 4.0 (3-1 in fractional odds) and simply believe that the price is far too short. In other words you feel it hasn’t got as good a chance of winnings as others may think and it should be 6.0 or higher. By laying the selection (saying it won’t win) you think there’s a good chance your opinion of the selection is right and more profits will be on their way to you.  For example, say it’s Southampton v Swansea and Southampton are 2.0 to win the match because of their good recent form. You may feel that their recent good form is because they have been playing teams down the bottom of the table and chances are they won’t beat a top ten placed side like Swansea. You therefore decide to lay Southampton.

Laying Example

It’s the big match in the Premier League and Manchester United are taking on Chelsea. The odds on Manchester United winning the match are 2.8 and they are 3.0 to lay. Now what does this lay mean?  Well it basically means that the odds are 3.0 on Manchester United either drawing the game or Chelsea winning it. In both those scenarios, United won’t be winning the game and that is the meaning of your bet.

Remember the last thing you want is for a bet to remain unmatched when the game starts. So you decide to lay €100 at the given price of 3.0 (that’s the decimal odds and the fractional odds that you may be familiar with are 2-1). Another punter comes along and decides to match your bet and the game begins. So let’s look at the situation now that is the situation.

The last thing you want to happen is that Manchester United win the game because if they do your bet will be a loser. Your aim is for either Chelsea to win the match or the game to end in a draw.

Let’s look at what happens to your bet judged on the result of the game.

Manchester United win the match

This is your worst case scenario. You have laid United to lose and they go and win the game. This means the rival punter who has placed the bet wins and you lose. How much do you have to pay out?  Well you laid €100 at 3.0 so they receive €200 (€100 at 2-1 fractional odds).  That’s not a good day on the exchanges but hopefully you’ll have better luck with your next bet.

The game ends in a draw or Chelsea win

Now this is much better news for you because by laying United at 3.0 you were saying they wouldn’t win the game and that’s just what happened. This means you win €100 from  the punter who felt United would win the game

Efffectively this means you have risked possible losses of €200 to win €100. That’s basically the same as putting a €200 bet on Chelsea winning or drawing the game.

It’s not the easiest of ways of betting to get used to and Betfair have produced a video that explains how to place bets on their site, so it’s a good idea to take a look at that before possibly making a costly error.

Using Trading to ensure Profit

Exchanges let you trade on events and lock in a profit whatever the outcome before the event begins. This is different from betting with traditional bookmakers where you can only win if you correctly predict the outcome of an event (i.e. a horse will win the race or it will be placed).  With exchanges though you can be on a winner just by predicting market moves, a bit like the stock markets.  You may want to back at large odds and then lay at smaller odds or vice versa. This way the punter can win whatever happens or have a risk free bet on an event, but you have to do it dead right.

For example

Ante-post betting means you can place a bet on an event long before it actually takes place. This can result you in getting a much better price for a selection than its eventual SP, on the other hand it means you can end up with a worse price. Betting on the exchanges really makes this an interesting situation.

Say you decide to place a bet on a horse that has been entered for the Grand National. You place €10 on the selection at the rather appealing price of 40-1. There’s several months until the big race takes place and you reckon that the 40-1 won’t last very long once your selection has a few races and puts in some promising performances.

A lot can happen in ante-post markets, that’s why it’s such a fascinating market. Your selection may well perform well in some races and see its price fall dramatically. Then again it might have a bad run and the bookmakers lengthen its price. Other horses in the market will see their odds changing depending on circumstances. Also others may be withdrawn from the race which means the market will keep changing.

Luckily for you, your horse puts in a great performance when having a race at Aintree over the National fences. As a result of this the price falls dramatically and all of a sudden it’s down to 12-1. A once outsider is nearly one the favourite and you’re sitting there with €10 on at 40-1 which will win you €400 if it goes on to win the National.  If it does fail to win then you only lose €10.

Now you decide to go onto the betting exchange in an attempt to further strengthen your betting position in the National.

You decide to lay the horse you’ve backed at 12-1 for €20. Someone matches your bet which prevents the possibility of it being unmatched and the bet becoming null and void. What’s the situation now?

If your selection goes on and wins the race you have that great €10 bet on at 40-1 which wins you a whopping €400. Because you laid the horse to lose then that means you have to pay out €240 (€20 x 12). You still make a profit of €160.

What if the horse loses though?  Well you don’t get that huge €400 win from your initial €10 bet but all you lose is that €10. However the second bet does win because you laid it not to win. As a result you receive the €20 that the other punters bet.  So you end up winning €10.

So as you can see you can sit down in front of the television on Grand National Day knowing that regardless of whether your horse wins or loses you are going to make a profit.  From years of experience I can tell you that making a profit on the Grand National is always a welcome result.

Laying your selection on the exchange has created that situation. Rather than you going into Grand National Day hoping for that €400 profit and hoping you don’t lose €10, a profit is guaranteed whatever the result of the big race.

This is known as ‘Greening Out’ as all of the potential wins on each horse will be shown in green indicating a profit is going to be made.

This can be applied to any market on any sport both before the event starts and also during play if in-running betting is available.

Watch Out for the Market Moves

It’s common for selections to see their prices shorten, especially in horse racing. A horse can be 12-1 one minute and keep falliing in price until it’s 6-1. Does this mean it’s going to win the race? Well it may well go on and finish first but you can’t guarantee success. It may be that someone has said the horse has been running well at home and a big run is expected.  If you are keeping a close eye on the market then it’s possible you see the price keep dropping and decide to place a bet as you follow the crowd.  But it’s not always the best idea to do this. If this horse is dropping in price, others will be seeing their price lengthen so going for a value bet could be the better option/

Corrupt Behaviour

There is often talk of corruption in sport and only recently there was a footballer convicted of attempted match fixing. Then there was the case of corruption involving Pakistani cricketers that resulted in jail sentences and a snooker player found guilty of match-fixing.

Betfair always keep a close eye on the possibility of irregular betting taking place.They work closely with sport’s regulators (unlike a few High Street bookies) and the transparency of their markets can act as an early warning to any irregular behaviour.

In-Play Betting Opportunities

This is another innovation that has been introduced in recent years.  Rather than betting being suspended once an event begins, betting continues during the event. These odds will constantly change and reflect how the event is progressing.  But be careful when placing bets. Betfair have provided lists of events where one of the competitors was in such a strong position that they traded at 1.01 (1-100 in fractional odds).

A list in 2002 showed that punters had lost €350,000 betting on 1.01 shots. That’s an extreme example but it shows that even selections that look as if they simply can’t lose do actually get beaten. So next time you see a horse well ahead in a race or a football team 2-0 up with a few minutes to go, don’t go crazy and put a massive bet on.

Asking For a Price