Betting exchanges differ from bookmakers websites in that they work more like a stock exchange. For each event available on an exchange, you can back something to happen or lay that selection (bet on it NOT to happen). Bookmakers have fixed odds which they dictate and move depending on the volumes of bets for various selections. You can’t bet on something NOT to happen with a bookmaker. Betting exchange prices fluctuate as people effectively bet against each other, driving the back and lay prices up and down until an event starts.
With a betting exchange, you can only place a bet when there is sufficient liquidity in the market for your selection. For example, if you need to lay £20 on a selection but there is only £10 of liquidity for it, only half of your lay bet will match instantly. You need to wait to see if the rest of the partially laid bet will match as more money goes into your event from other people. Sometimes the lay price will come in again and fully match your lay bet, but be careful because the lay price can also drift badly, leaving you in a bit of trouble!
Why do you need Betting Exchanges for Matched Betting?
Without betting exchanges, you cannot matched bet. Matched betting, as the name implies, is placing two bets that match. This is one bet with a bookmaker backing a selection. The second bet is with the betting exchange laying the same selection. These two bets match, leaving you in a position to take advantage of some type of offer, free bet etc. In matched betting, you need to find close matches, i.e. where the odds on the bookmaker’s website and the betting exchange are very close. This means you only pay a minimal qualifying loss whilst chasing bookmaker offers for bigger profits.
What Betting Exchanges are available in the UK?
There are six betting exchanges available in the UK; Betfair, Smarkets, Matchbook, Betdaq, Ladbrokes Exchange and Betconnect. Below I will give a brief overview of each one.
The first and biggest is the Betfair Exchange. Betfair was established in the year 2000 and now comprises both a Betting Exchange and a Sportsbook. They offer the widest range of markets of any exchange currently available and generally offer good odds all round due to the high volumes of money for almost all events. Their base commission rate is 5%. However, you can change this to 2% or 8% by changing your account’s monthly reward package. The site is packed with features and offers. This is a must-have for any matched bettor.
Smarkets was established in 2008. Whilst they lack the wide range of events that Betfair offer, what they do, they do very well, in my opinion. Their site is very user friendly. They constantly innovate with new functions, such as the recent introduction of creating your own multiple selection back and lay bets. The base commission is 2% for all events. However, users can enjoy a fully 0% commission in bets by being a Platinum member or above with Outplayed. This in itself is reason enough to sign up with them.
Matchbook was founded in 2004 and positions itself as a sports betting exchange community. Their aim is to grow their community, focusing on liquidity, adding one market and sport at a time, and getting it right. For a time in the UK, they had some licensing issues and were fined by the gambling commission. They had to make significant improvements to their platform and processes. They were allowed to trade again in August 2020, offering a new upgraded and reliable platform now, if lacking the wide variety of events that some other exchanges offer. Their commission rate is 2%. However, Outplayed Platinum members and above can take advantage of 0% commission rates currently!
Betdaq was founded back in 2000, around the same time as Betfair. They were acquired by Ladbrokes in 2013. The Betdaq exchange now powers the Ladbrokes Exchange, so effectively, the two are the same. The commission rate is 0% on all markets EXCEPT football, horse racing, greyhound racing and cricket, which are 2% commission. More recently, they have started to offer 0% commission on all markets each Saturday. They offer a lot more US sporting markets than most except Betfair. Sometimes liquidity is an issue, and the prices have a tendency to fluctuate a lot, so be careful!
As stated above, the Ladbrokes Exchange and Betdaq are the same. Though the commission rate is a flat 2% commission for all events. The Ladbrokes Exchange can be found on the Exchange tab on their betting website.
Betconnect is new to the exchange market and works a little differently than the other exchanges. Their target market is pro gamblers and people who have restricted accounts and are trying to get bookmakers odds. These bets are then divided up and offered to matched bettors to place them. It can be good to try to follow offers without incurring any qualifying loss. But for the purposes of standard exchanges, this wouldn’t be what you would need.
Check out my review of Outplayed or to give matched betting a try head over for the free trial.