Sports Betting Exchanges

Sports betting exchanges are betting marketplaces that allow customers to bet on the outcome of sporting contests and other events. They are identical to sportsbooks in this basic function but have several key differences from standard online bookmakers. Most betting exchanges allow players to trade in real-time, similar to live betting options. This gives bettors the ability to hedge on the fly, and the chance to minimize losses or lock in a profit.

The one vital difference between traditional online sportsbooks and betting exchanges is how they make their profits. At a traditional sportsbook, bettors are wagering against the house. The managers set odds, and the sportsbook pays out of their own pocket when you win a bet. Likewise, when you place a wager and lose, your losses go right into the pocket of the sportsbook.

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Online Betting Exchange Model – Explained

Betting exchanges operate as a peer to peer betting marketplace, rather than the player vs. house model of a sportsbook. Customers are wagering against each other, rather than looking to outsmart the oddsmakers. When wagering at betting exchanges, bettors will have two options. Traditionally, a customer ‘backs’ an outcome to occur (to win) and the sportsbook ‘lays’ that the outcome will not occur (to lose).

However, unlike a standard sportsbook that accepts your bet immediately, a betting exchange requires that your bet is matched by another customer for the wager to have action. Many exchanges set competitive odds while others allow customers to back or lay their own bets in the marketplace. Some exchanges allow a combination of both.

Exchanges offer some of the best odds around. It’s unlikely customers will have their bets matched if they post odds that are considerably worse than what the market is offering, so that’s something to keep in mind if you want your bet matched. However, since exchanges offer lower margins than a typical sportsbook, and the bookmaker’s overround is almost always smaller. Betting exchanges don’t take the standard 10% vig on each bet. Instead, they charge a commission on a wager that is successfully matched. These commissions range from 1% up to 5% of winning wagers.

Sports Exchange Betting – Advantages

Betting exchanges offer several advantages compared to traditional sportsbooks. One of the biggest advantages is the ability to lay bets or bet that an outcome will not happen. These markets are not generally available when betting at a traditional sportsbook, especially on a large scale. Lay betting has plenty of value, particularly because it’s rare that gamblers are betting on something not to happen. It also offers bettors the chance to wager on several teams or competitors to not an event or outcome. This can be a viable alternative to backing wagers on selections you may think will win the contest or competition.

Bitfinex ExchangeExchanges can also be used to easily for hedging. Future wagers are the most common type of market that allows us easy hedging opportunities, but straight bets on just about any type of market can usually be hedged at exchanges to lock in a profit. Ultimately, exchanges usually offer elite pricing and have markets that are simply not available even the largest sportsbooks online. They can be hit or miss in sometimes in terms of odds, but are an elite option for the savvy sports bettor.

Sports Exchange Betting – Disadvantages

The main disadvantage of exchange betting should be clear. Your bets may not always be matched. This isn’t the case at a regular sportsbook, where you simply press submit and your bet is immediately accepted. This is something to consider, but usually isn’t a problem when you’re wagering at large betting exchanges and large market sports. This can be an issue for smaller markets, however. If you’re looking to hedge as mentioned above, your bet being accepted is obviously crucially important. Having money at another sportsbook is always a solid backup plan, particularly if you’re betting smaller markets.

Exchange betting isn’t always going to get bettors the best price either, despite the commission model that they employ. Line shopping at other shops is still recommended. Their markets are efficient, but perhaps not as efficient as reduced juice sportsbooks with sharper odds. The commissions are going to save bettors money on average, but keep in mind that the average 5% commission on wins is a cost that many fail to factor into their bottom lines. Some reduced juice shops, particularly Pinnacle Sports, offer lower vig on their markets compared to betting exchanges.

VIP programs And Betting Exchanges

It is also worth noting for bettors who are interested in deposit bonuses, and VIP programs are almost always going to be out of luck at betting exchanges. Exchanges may offer a small introductory bonus, but these are quite small compared to the bonuses one might find at traditional sportsbooks. However, forgoing a deposit bonus and VIP program most likely the right move, even though they can be enticing to bettors who are trying to build a bankroll. These situations should be evaluated on a case by case basis.

U.S. Betting Exchanges

Unfortunately for the bettors in the United States, there are currently no exchanges available that accept US players. Betfair and Matchbook are the largest betting exchanges online by a large margin. Though Betfair has several subsidiaries in the U.S., they don’t offer sports betting options to players due to US legislation against online gambling.

Matchbook was once partnered with now defunct sportsbook, WSEX, but the betting exchanged severed ties with them in 2011. They left the American market around the same time they ended their partnership with WSEX. All players were paid in full after the transition. The last exchange to operate with some success in U.S. markets was BetMaker.ag. They ultimately merged with Bookmaker.eu in February 2013. They did not continue their betting exchange model, however. There has not been a viable betting exchange option for Americans since the merger.

In general, betting exchanges haven’t caught on as much as they have in Europe. Part of that is due to legal issues surrounding sports betting in the U.S. Betfair’s exchange is one of the most popular gambling sites in Europe.