Betting Exchange: A Different Way to Bet on Football Matches

A betting exchange is an alternative to traditional bookmakers. Typically, traditional bookmaking platforms allow punters to find their selections from a huge pool, inspect the odds, choose their stake and place their bets. But for punters who want to compete against fellow punters or who do not want to pay for the profit margins set by traditional bookmakers, a betting exchange is a viable alternative.

So what is a betting exchange?

A betting exchange is a punter-to-punter, peer-to-peer network, enabling bettors to place bets against fellow bettors. In a betting exchange, players bet against each other, with available odds arbitrarily set by the punters involved. 

For example, if two punters are arguing against the team that will win in a match between Arsenal and Manchester United and they are happy to bet on the match, one of the punters say A can pick Arsenal and suggest to the other punter B backing Manchester United to place a bet against his prediction, say worth Ksh 200. 

In this exchange, a total of 400 will be contributed by the two punters and deposited before the match. The punter who makes the right prediction will get the Ksh 400, less commission to the person holding the cash.

Online Betting Exchanges

Instead of depositing cash with a friend, punters who wish to compete against fellow punters can find several online betting exchange sites, such as Betfair. On the online sites, a punter A backing Arsenal would decide to place say Ksh 200 that Arsenal would win. Another punter B who feels Manchester United would win can see punter A’s price of Ksh 200 and then matches punter A’s bet with say Ksh 200. In this case, if Arsenal wins, Punter A gets Ksh 400 as would Punter B if Manchester United wins.

What Are the Advantages of a Betting Exchange?

(a)     Better odds: Placing your bets on a betting exchange means you are not tied down to the odds set by a bookmaker. Instead of selecting bookmaker odds that have been carefully and painstakingly crunched by expert odds compilers to ensure the bookies have a profit margin, the exchange allows you to compete against a sports enthusiast who may not have spent much time on the teams and may therefore allow for a huge margin of error. A betting exchange is a free market approach that allows punters to get better prices, especially when a fellow punter undervalues a particular team. Most betting exchanges offer better odds than traditional bookmakers.

(b)     You can exploit the “laying option” to make more money: What if you believe that in a game between Arsenal and Manchester United, Manchester United won’t win? Holding such a firm opinion doesn’t mean you are sure Arsenal will win or that they will draw, but only that Manchester United won’t win. If you were to bet on such a prediction with a traditional bookmaker, you will have to use the double chance option which comes with very low odds. However, at a betting exchange, you can bet that Manchester United will not win and still get huge odds for it. 

(c)     No fear that your account will be closed: While traditional bookmakers rarely close client accounts, some punters have had their accounts closed. Similarly, many traditional bookmakers have stake limits that punters can’t exceed. At a betting exchange, you are simply betting against your peers and no market interventions occur.

What are the disadvantages of a betting exchange?

(a)     Part of your winnings is lost in commission: Whenever you win money in a betting exchange, a certain portion (often 2%-5%) of the payout will be deducted as a commission. The commission is the pay you give to the exchange for acting as a middleman between you and other punters.

(b)     No odds for non-mainstream events: In the exchanges, only the bigger and more popular football matches tend to generate interest and have odds. Non-mainstream events and obscure sports will rarely have odds on the exchange.