How do Bet Exchanges work?

Content writer - Jan, 2021 -

Bet Exchanges are web pages where bettors exchange bets anonymously. They are also called Betting Exchange.

Two things can be done in a Betting Exchange:

Normal bets can be made in the same way as you would at a bookmaker. For example, you can bet on the victory of a tennis player. We are then talking about buying a bet ("back"). If the tennis player loses, he loses the bet. If he wins, he gets the value of the bet multiplied by the odds.
In addition, you can also bet against a forecast. This is the great innovation of Betting Exchanges. You can offer bets and odds to other bettors yourself as if you were a bookmaker! If you believe that Fernando Alonso will not win the next Formula 1 Grand Prix, you can sell ("lay" in English) the bet in favor of Fernando Alonso. You would win as long as Fernando Alonso is not proclaimed champion of the Grand Prix.

There are many types of bets on Bet Exchanges and on many sports.

Betting example on a Betting Exchange

Football game Barcelona - Osasuna

You believe that Osasuna will not beat Barcelona and offer Osasuna victory in the betting exchange at a rate of 7 for an amount of € 100.

Another bettor is a follower of Osasuna and bets € 100 on his favorite team at a odds of 7.

This is how the bet is exchanged.

If Barcelona wins the match or there is a tie, the Osasuna supporter loses the bet and you win it (you have to subtract the commission from the betting exchange).

If Osasuna wins, the team's follower wins the bet. He pockets his profits (minus the commission), which are drawn from his account.

Game results	You	The follower of Osasuna
Barcelona win or draw	Earnings = 100 euros - commission	Losses = 100 euro
Osasuna victory (share of 7)	Losses = 100 x (7-1) = 600 euros	Winnings = 100 x (7-1) = 600 euros - commission

There are many types of bets on Bet Exchanges and on many sports.

Exchange bets: Advantages and disadvantages

Biggest advantage of Betting Exchanges: the odds are more interesting than those of the bookmakers. The reason is that the bookmakers take a percentage of the bets they offer and the Bet Exchanges do not. Bet Exchanges take a commission of about 5% of the net winnings of the winner of the bet. It is 5% less than the margin of the bookmakers, which is around 10%.

Thanks to Bet Exchanges, you can also bet against a sports forecast.

Major drawback of Bet Exchanges: You can only bet if other players are willing to exchange a bet with you. This is not always the case, especially in less media sports. Another disadvantage is that the beginning and the realization of a bet are much more complicated than in a bookmaker.

Furthermore, it is not possible to place combination bets on Bet Exchanges.

How to bet on a Betting Exchange?

Take for example the Champions League match between Liverpool and Lyon.

Here is an extension of the match bets:

The figures in bold are the odds and the numbers below are the amounts of money that can be wagered on those odds.

The blue part on the left of the table corresponds to the purchase of bets (back) and the purple part on the right to the sale of bets (lay). We see that a maximum of € 2,829 can be bet on the draw (The Draw) at a rate of 3.55 and € 3489 at a rate of 3.50. We also see that Liverpool's victory can be sold for € 1,360 at a price of 1.82.

Let's imagine you are going to bet against Liverpool. You have to click on the purple box for Liverpool (Lay). A window to place the bet opens on the right of the screen. Choose the amount of the bet. For example, let's say you bet € 10 on the sell fee (1.92). If Liverpool wins, they lose € 9.20. If Liverpool don't win (tie or lose), they win € 10.

You can also buy bets at a higher odds or sell at a lower odds. To do this, change the quota in the box where it says 1.92. In that case, the bet will be validated when a bettor accepts the opposite bet. If the odds you offer are very high, it is very possible that no one will accept the bet.

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