Exchange betting, also known as peer to peer betting, is essentially about betting against other people, rather than a bookmaker. This is why many people believed exchange betting would replace traditional bookmaking. Although it has not done that, and perhaps never will, it is still a type of betting that you should learn more about. There are numerous benefits that exchange betting can offer, which will be discussed in this article. But first, let’s take a look at the basics of exchange betting so that you understand what it is all about.
What Is Exchange Betting?
In simple terms, a betting exchange matches up those who want to take opposite sides of a wager. They are acting as the middleman between a person betting on a selection to win (the backer) and a person betting on that selection to lose (the layer). The layer is acting as a bookmaker (rather than an actual sports book like Bodog, for instance) who takes the backer’s stake and agrees to pay out at the given odds if the selection wins.
The exchange manages all the money involved. Starting from when a wager is agreed, they take the stake from the backer and the potential payout from the layer. The potential payout will be refunded to the layer if the selection loses, along with the backer’s stake. The exchange gets their share of the money by taking a small commission from whichever party wins.
How to Use a Betting Exchange
Betting exchanges are operated on websites that work similarly to how most sports betting sites do. The first thing you have to do before you can begin betting is open an account and deposit funds (read our guide on that here).
Then, you can log in to your account and see all the many sports that are covered, as well as the available betting markets. You have to go to the market you want to bet on before locating the selection you want to back or lay.
Backing a Selection
When you are backing a selection, you basically pick your selection and place your stake at the agreed odds. In this case, another bettor will be taking your wager instead of a bookmaker. Also, how the odds are agreed will be different as well. Unlike betting with a bookmaker where you have to take the odds currently being offered, you are allowed to choose the odds with an exchange. You can submit a proposed wager with the stake and odds of your choice. If a layer accepts your terms, the wager is then agreed and your stake will be taken away from your account. Alternatively, you can choose to accept an existing wager that has already been proposed by a layer as well.
Laying a Selection
When laying a selection, you have all the same options. If a person has proposed a wager and you are satisfied with the terms, then you can choose to accept. The exchange will deduct your potential payout, which is the amount you will have to pay the backer if the selection wins. You can also set your own odds for a selection and the stake you are willing to lay. If a backer accepts your proposal, then the wager is agreed. Technically, there is no ceiling to the stakes or odds that can be proposed. However, your terms have to be reasonable so that others will find them acceptable. If you propose a wager and no one accepts it, your wager will be canceled.
In this case, you will get your funds that were deducted from your account back, and without commission payable.
Benefits of Exchange Betting
Exchange betting comes with some major benefits that traditional sports betting cannot offer.
The first one is that you can lay selections that you are not allowed to do with a bookmaker. This means that you will get more opportunities to earn money. For example, you want to bet on an upcoming tennis tournament, and there are three players likely to win but you cannot decide on one. In this scenario, you can back all three players, and the best thing that could happen is that you win one wager and lose two. However, with exchange betting, you can lay a few other players. This is so that you will win all of your wagers if only one of your three picks happens to win.
It is important to note that there is some risk involved with exchange betting as well. For example, one of the players you lay could end up winning the whole tournament. That being said, you should be satisfied with this risk if you are positive about your picks. Another great benefit is that you will potentially make money even if none of your picks ends up winning at all.
How? You will still win all of your wagers if the tournament is won by any player that you have not laid. Laying can be useful as it is usually easier to pick a selection that is likely to lose.
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