What is a Betting Exchange?

No need for the bookmaker anymore

They are online platforms that were developed at the beginning of the 21st century. Instead of the bookmaker, people can interact directly online using their own knowledge, setting out bets between themselves. Due to this, there is no need for the bookmaker to set the conditions.

The platform will charge a low commission on the net market profits that are made from the betting. While traditional bookmakers do not like betting exchanges as it cancels them out, it can allow for improved chances of profits for the bettors.

The punters that use betting exchanges will generate their own betting markets and still have the same chances of winning as they bet against each other. This can create improved win opportunities that are not restrained by a bookmaker and they also generate a higher level of transparency.

At the beginning of the millennium, Flutter.com created the first betting exchange to change the structure of the traditional betting markets. They went online in May and it was not long before Betfair was established.

This brand-new concept was particularly exciting for punters, as they would deal with each other on a personal level. Bookmakers would no longer need to set the odds and receive the stake. Instead, the punters would decide the odds between themselves.

Flutter commenced their trading adopting fractional odds with the emerging competition of Betfair using decimal odds. As customers took up the odds, the companies would charge a small commission on any winnings. With the emergence and growth of Flutter and Betfair, it was not long before they decided to merge in December 2001 to make them the market leaders of betting exchanges as of 2021.

Multiple betting exchanges worldwide commenced in 2004 when Matchbook was launched. In the beginning, only football and horse racing were available to bet on at betting exchanges. However, this was soon to develop further with the introduction of many other sports and famous sporting events as the internet and network applications continued to grow.

Many commercial business interests were gathering pace with partnerships being formed, for example, Betfair and CONMEBOL as the growth of betting exchanges continued to flourish. Other examples included the growth of 1xBet who made several tie-ups and Ladbrokes became the main sponsor of Scottish professional football.

Cricket is a massive sport in India and betting on cricket matches is huge business. 1xBet saw that opportunity and as they entered the market, they made West Indian Dwayne Bravo their ambassador who is one of the most famous players in the Indian Premier League. Other betting exchanges have also set up in India with the likes of Cricex, Indibet, Fun88 and BetWinner also entering the market there.

Let’s take a look at what differentiates a traditional bookmaker and a betting exchange. When you participate in betting on a betting exchange, bettors buy odds that in their opinion deliver the best return. Alternatively, a bettor will buy into odds that may lose.

To support the explanation let us consider a cricket match as an example where England are favourites to beat New Zealand. In this example, you can play a lay bet against New Zealand to lose the match. The stake may be agreed by an alternative bet in the market. This can make the bet a win-win situation for each party.

There are different types of bets that can be made against the possible outcomes and we will explain what options exist. Back betting occurs when a punter makes a bet for an outcome to happen. Let us give an example where the bettor makes a wager on Porto beating Benfica in a game of football. They punter will only succeed if Porto wins the match.

Lay betting means the bettor takes the place of the bookmaker and expects a result not to happen. In this instance for example, the bettor will make a bet against Benfica winning the match against Porto. The punter will win if Porto win the game or the result is a draw.