Betting Exchange Sites

Until the early 2000s, players online could only wager against the bookmaker on a selection to win. When betting exchange sites such as Betfair started operating, they offered users a brand new option. Instead of playing against the house, they could now act as a bookie and compete with other players.

While traditional sportsbooks go head-to-head with gamblers, sports betting exchange sites take no risk whatsoever since they charge a commission for providing their services. This alternative has steadily gained popularity among bettors.

However, one major drawback is that another player must match your wager. Otherwise, it is not live, no matter what the result is. Read on to examine which are the best online exchanges, how many different types exist, as well as why market liquidity is one of the most crucial aspects.   

List of Betting Exchanges 

Prior to the internet, it was not easy for players to come together and place bets against each other. The first-ever betting exchange, Flutter.com, allowed us to compete with other users but was quickly absorbed by Betfair, who took over.

Until a few years ago, Betfair maintained almost a monopoly, with top competitors like Betdaq or Smarkets only holding just under 10% of the market. However, the gap between them appears to be closing. Underneath, you can find the top betting exchanges that accept players from your country.

Sports Betting Exchanges Reviews 

Choosing the bet exchange site that best suits your needs is not an easy task. There are several aspects to consider, such as commission fees, liquidity, as well as the overall betting offering. In addition, there is always the possibility that the exchange is not available in your location.

For example, Betfair and Ladbrokes, among others, do not accept players from Canada, Germany, France, India, or the US. This is why you have to look for an alternative, which is challenging because the list on online betting exchanges is not endless.

Betfair Betting Exchange 

Betfair is undoubtedly the industry leader, maintaining almost 90% of the market base of the players holding an account with an exchange. It provides more sports and markets than any other site, and it is almost sure that your bets will be matched. It is also the sportsbook exchange with the most live betting options.

The API system offers multiple trading tools that can be used to follow the odds movement. Since it has the most punters, our Betfair review revealed that the bookie charges the highest commission among all exchanges, which currently ranges between 5-7%, depending on the country of residence.

Nonetheless, you can use the point system to reduce it. Apart from the Betfair commission, a different fee, the Premium Charge, was introduced a few years back. Essentially, if you are a very successful bettor, at some point, Betfair might become valueless.

Matchbook Betting Exchange 

Matchbook has been online since 2004 but started growing in popularity around 2011 when it adopted a new strategy. The purpose was to improve the liquidity among the existing markets to compete with Betfair. The charge is 2%, and the site offers 0% commission for the first month after opening an account.

While conducting our Matchbook Exchange Review, we determined that it is an excellent option for the players who want to be in all the major US sports. Like Betdaq and Smarkets, the overall number of users and sports are way lower than Betfair.

Smarkets Betting Exchange

Number third on our list is Smarkets, one of the latest sports betting exchanges launched in 2008. The 2% commission, which only applies to winning wagers, is one of the competitive advantages it has over Betfair. What’s more, if you are a Pro Tier player (placing 1,500+ bets in a month), you can drop the commission to just 1%.

However, it has a long way to become a serious threat when it comes to sports, markets, and liquidity. Even in the top Premier League matches, you can only find 40 markets on average.

Betdaq & Ladbrokes Betting Exchange 

Founded in 2000, Betdaq is Betfair’s main competitor in the UK and Ireland. In 2013, it was bought by Ladbrokes and they both now offer the same services. It charges a commission of 2% and has good liquidity.

It is the only betting exchange besides Betfair with a public API, which means it is an excellent alternative for building bots. You can also place accumulator bets, which is not that common with other exchanges. However, Betdaq has remained stagnant since Ladbrokes acquired it and still looks like a secondary option.

1xbet, Megapari & Betwinner Exchanges

A few years back, these three sportsbooks, especially popular in Eastern Europe, decided to add an exchange section as well. They all use the same platform, BetB2B, so the exchanges available were identical.

Despite being very prominent in regular sports betting, they failed to attract any serious interest into their exchanges. The liquidity was quite low, and most of players' bet were not matched. Eventually, all three were removed.   

Other Types of Bookmaker Exchanges 

Most players are used to the leading online betting exchanges, such as Betfair and Matchbook, and are unaware that some alternatives exist as well. This is not common knowledge because exchange betting is not that common and because these different types are not too popular in Europe and North America.

From clones to betting through a broker, it is vital to be aware of them. They offer flexibility in emerging markets since many exchanges do not accept players from all regions. However, you will notice some key differences.

The odds update is usually late, and software malfunctions are a regular occurrence. In addition, the Bet Acceptance time is prolonged, and, at times, your wagers might not even be processed. Let’s have a look at all the alternatives that you may encounter.

Clones   

Several bet exchange sites operate as Betfair’s White Label. Essentially, this means that they take everything like sports, markets, odds feed, and features and integrate it into their own platforms. Usually, there will be an indication that says ‘Powered by Betfair’, so you will know that it is a clone. The most characteristic examples are 9wickets, Mountbet, and the Orbit Exchange.

The problem with these clones is that, if anything happens, you cannot contact Betfair directly and hold them accountable. You would have to contact the White Labels directly, which has proven very challenging in the past. It is also prevalent for clones to shut down your account altogether, with no excuse.

Brokers 

The use of brokers, or agents, has not been yet lost when wagering on a sportsbook exchange. Instead of holding an account with many bookmakers, you can have one sub-account under an agent. This is a practice that players who live in countries where not many exchanges operate.

They have to “outsource” their betting activities to a third party. Also, in most cases, you cannot register to a site unless a broker invites you. Of course, the obvious problem with agents is that your account is not directly under your control, so you can often fall victim to a scam.

Asian Exchanges 

Players from Southeast Asia, in particular, are some of the most prominent high-roller players in the world. Betting against other users is something trendy. However, the problem is that most countries have either wholly banned online wagering or have set some stringent laws.

Because of this, the best sports betting exchanges have elected not to target these markets. This has opened the way for new exchanges, like Citibet. However, since online betting is illegal, the platforms constantly shut down and are re-launched via a mirror site.

What is a Bet Exchange?

A bet exchange offers you the opportunity to place a wager against other players on the platform instead of the bookmaker. You have two options: you can either back (buy) or lay (sell) a market. A back wager is when you bet on a selection to happen, while the lay bet is the exact opposite. You bet against a specific outcome.

Let’s see a practical example for the Liverpool vs. Manchester United match this weekend. Player 1 backs Liverpool at @2.50 (15/10) odds, while player 2 lays Liverpool at 2.30 (13/10) odds. If Liverpool wins, then player 1 is the winner. If Manchester United wins or the result is a draw, then player 2 wins.

Users can set, offer, and even request odds from fellow bettors. Essentially, you can act as a bookmaker and a player. Using an online betting exchange provides more freedom of choice.

Traditional bookmakers, especially smaller ones, are unwilling to risk the odds or the stake amounts you are looking for. In exchange, you need to find someone else who is prepared to share your risk. Of course, this sounds way easier than it is. There is no guarantee that your wager will be matched.

How does a Betting Exchange Platform Make Money? 

Regular online sportsbooks factor in the odds a small percentage called the VIG (or edge). This is essentially their margin for profit. Since bookmaker exchanges do not set the odds themselves, they make money by charging a commission fee when a player uses the platform.

The betting exchange commission varies from site to site, but, in general, it is between 2-5%. Some bookies only charge winning wagers, while in others, you have to pay a fee on all bets placed. In the table below, you can see the commission in the top exchanges.

Bookmaker	Commission (%)	Applies to
Matchbook	0-2%	Net Winnings
Betdaq	2%	Net Winnings
Smarkets	2%	Net Winnings
Ladbrokes	2%	Net Winnings
Betfair	5%	Net Winnings

Let’s take a look at an example. You bet €100 on Rafael Nadal to win the Wimbledon at 5.50 odds. If you do not count your starting stake, you stand to win €450 in total before the commission. If you bet on a site that charges a 2% commission, you will have to pay a €9 fee.

However, if the commission is 5%, then you would have to pay €22.50. You can use this formula: {(Stake X Odds) - Stake} X Commission. So, how can a site like Betfair stand to charge a lot higher than the competition? The answer is liquidity.

Market Liquidity 

The top priority of all online betting exchanges is liquidity. Essentially, liquidity is the total amount of money you can stake (back or lay) at the corresponding odds of a selection. It will be challenging to pick up a bet if it is low or for your bet to be matched. There has to be a player that covers your wager.

Just so you can put this in perspective, we compared the liquidity of the same event in Betfair and Ladbrokes. At Betfair, the total amount was more than £6,000, while at Ladbrokes, less than £200. A sportsbook exchange with high liquidity can offer more sports and markets since more players can match other users’ wagers.

Where do Bookies and Exchange Betting Sites Differ

We have already touched upon a few areas where exchanges and traditional gambling sites differ. Besides competing against other players and the way they profit, there are several different aspects to notice. One major difference between bookmakers and betting exchanges is the limits. Betting exchanges have way higher limits than bookies.

The same concept applies to the odds, too. You can find much better odds in an exchange. The reason is that the site does not risk anything when players bet against each other. Moreover, is it very uncommon to have your account limited or closed, which happens a lot with regular sports betting sites.

Winning bettors are not only welcome but preferred since the more they wager, the higher the commission will be. On the other hand, there is no assurance that your wagers will be picked up. And there are considerably fewer sportsbook exchanges to choose from.

This, coupled with any restrictions that may apply to your country of residence, can make it a little bit tricky to find a suitable exchange, especially if Betfair is unavailable. You should also note that the number of sports and markets in exchange is substantially less than a bookmaker.

Why do you need Multiple Sportsbook Exchange Accounts? 

If you are serious about playing in a betting exchange platform, then holding multiple accounts is not only beneficial but essential. Sometimes it is inevitable that they will have a technical issue and might be down for a long time. You might think this is not too serious, but what if you have big liabilities open?

You will not be in a position to see which of your bets have been matched and could stand to lose a significant amount. By having many accounts, you can cover some of your wagers. The best betting exchanges also provide greater flexibility for players to trade their positions.

Similar to the stock market, the value can go up or down after an incident occurs in a sporting event. However, you can bet the opposite of your original wager on a different site to ensure you will profit. This strategy is called matched betting.

New Betting Exchange Sites 

New online bookmakers enter the industry constantly. Players are always searching for new sites to bet on. Still, new betting exchange sites do not sprout with the same frequency. Since the platform's liquidity is the most critical factor, a new site cannot compete with the industry giants. It is not too uncommon for existing sportsbooks to add an exchange section.

This has been the case with bookies like Ladbrokes and 1xbet. However, 1xbet’s attempt proved unsuccessful and they had to shut down the exchange section since they could not attract any serious traders. At this point, there is no new trustworthy exchange.

A Final Thought on Betting Exchanges

Bet exchanges have been critical to the revolution of online gambling. Betfair was the first site to allow bettors to lay bets, a move that changed everything. Many features like Cash Out that you are used to today would not have existed without online betting exchanges.

In addition, the live betting sections that every bookie has are a product of exchanges allowing players to set odds still after an event has started. Exchanges are not as common as regular betting sites, but there are still some attractive options out there.

Playing in one can be tricky initially until you understand the different styles and get accustomed to all the details. Still, an exchange can prove to be a profitable option, especially if you can master the best Betfair trading strategies to get the right price on the correct odds.