Online Bookmakers vs Betting Exchanges – Better Odds?July 2, 2018 8:00 am
If you are looking for better value when placing your bets then you may have considered looking into a betting exchange instead of your regular online bookmaker.
Now there are pros and cons between traditional bookmakers and modern betting exchanges, which we will be discussing in the rest of this article.
For now, so there’s no confusion, let’s just settle what we mean by bookmaker and betting exchange.
A bookmaker is the traditional way to place a bet, you will have seen their shops on most high streets, usually next to a chicken shop. They offer you odds on something happening and if you place a bet at the stated odds and win you get paid out. The also operate heavily on line and my provide apps to download.
A betting exchange on the other hand removes the cold, grasping hand of the bookmaker, and inserts the soft, gullible hand of your fellow gamblers. A betting exchange is essentially a platform where you are the bookmaker or the punter, you set the odds on an outcome and someone else takes on your bet – or you take on someone else’s.
Bookmakers vs Exchanges: Main Differences
How Do Bets Work?
With a bookie, you are betting against him (or her) and that’s it. They raise a book on an event, such a football match. They say that West Ham have a 2/1 chance of beating Man City at the Etihad. You either rupture your gall bladder laughing at that, or you stick some money on it. Those are your only options.
A betting exchange differs by offering two types of bet – a Back Bet and a Lay Bet. A Back Bet is where you Back an event – this is the same as with a traditional bookmaker – i.e. if you think West Ham will beat Man City you Back it by putting money on it. Except with a betting exchange, you are backing a bet that has been offered by another person and not a bookmaker.
With a Lay bet you are betting like a bookmaker – i.e. you are betting something won’t happen, and seeing if someone disagrees with you. So if you think that West Ham won’t beat Man City, you could make that a Lay Bet.
Like a bookie, you are basically creating your own book on that market – and seeing if someone wants to take you on.
What Types Of Bet Are There?
If you’ve had any kind of flutter in the past, you will know there are a wide range of bets available with a bookie. You can hedge your bets with an each way, you can stick lots of small bets together to build an accumulator.
You simply do not have that variety available with a betting exchange. Because you are betting directly against other punters, it is complicated to build an accumulator, for example, as a lay bet.
How Do They Make Money?
Of course, neither bookmakers nor betting exchanges are charities – they are both in it to make money.
How they make their money however is vastly different.
I’ve written before in details about how bookmakers make money and how much but mainly they make their money through running “Books” on events, where they set odds on various winning outcomes. You are always betting against them, and them alone, and if you lose they keep all of your money.
Are they good at this? Is it a successful business model? Let’s put it this way, there’s a reason that many Premiership football teams have bookmakers for shirt sponsors instead of Mr Sheen or The National Potato Council.
There is also the sometimes dubious off line activities of some bookies, such as the notorious Fixed Odds Terminals installed in bookmakers shops. These are so efficient at stripping money from poor communities, they’ve even made the bloodsucking Tory Government wince, and it is proposing new regulations against them. When Iain Duncan Smith accuses you of abusing the poor, your moral compass must be really off centre.
Betting exchanges on the other hand are a platform. They are not putting up the bets themselves; they are just providing the means that the bets can be made. It therefore doesn’t matter to them if you win or lose so all they take is a commission on the money that changes hands – usually in the region of 2%.
Where Do You Get Better Odds?
Betting exchanges offer better odds.
Ok, well as we outlined above, when you bet against the bookies, you can only bet at the odds they offer. Yes, you can shop around but you wont see that much variation really.
Also, bookies set their odds with a built in margin. This is a percentage they apply across an entire book – say the win/lose/draw odds in a single football match. This essentially means they can’t lose, and this protection is worked into the odds prices they offer – affecting, for the worse, your odds.
The betting exchange on the other hand does not create artificial odds like a bookie. It allows you to either set your won odds (by putting down a “lay” bet) or you can hunt out odds that you find acceptable (by “backing” a bet that has already been set up by someone else).
This means you are almost certainly going to find better odds at the exchange.
What’s The Best Betting Exchange?
*Betfair operate a betting exchange and an online bookmakers so you get the best of both worlds – check out my full Betfair review for more info.