Home I All Guides I Sports Betting Guides I Strategy I Sportsbooks vs Sports Betting Exchanges
Before starting to bet, punters will have to choose between a large number of online betting service providers. In general, there are two categories of operators: the traditional bookmakers and the fairly new sports betting exchanges.
The first betting exchange was formed by the merger of flutter.com and Betfair in 2000. Since then Betfair has maintained a dominant market share over the years.
The main difference between bookmakers and exchanges is that bookmakers are offering their customer odds to bet on. They bet against the operator while exchanges don’t set odds, they are just providing a marketplace for customers where users bet against each other. The public offer and demand, so to speak, regulating the odds for sports betting exchanges.
When placing a bet at a bookmaker website, you can only back the outcome of a certain event. Basically, you bet on the occurrence of a specific result.
If you place your bet on Cleveland to beat Golden State in the NBA Finals, you are backing Cleveland.
The betting exchanges have added another way of betting. Here you can also lay bets, which means that you are betting against a certain event to happen.
If you decide to lay Cleveland in the NBA Finals and they end up losing, you will win your bet.
The tricky part is the payout. If you win your bet, you will double your money, but if you lose the bet you will have to pay out at the previously agreed odds.
Laying a bet is quite similar to the job of a bookmaker.
The vast majority of betting exchanges are making money by charging a commission on the net winnings of their customers.
The odds available on a betting exchange will therefore often be better than those offered by traditional sports betting websites, because there is hardly any commission included.
Betting exchanges have obvious advantages for the customers: low commission, decent odds, and no limitations on betting volumes.
Since the betting volume is determined by the customers themselves, it might happen that you want to back a specific event for a big amount of money, but you won’t be able to because nobody else is interested in that certain event.
The exchange market regulates itself and that is why the liquidity heavily leans towards very popular sports like soccer or tennis. Rather small leagues are not attractive enough to allow high rollers to play for their usual stakes.
Moreover many exchanges aren’t suited to unlimited multiple parlay betting. Even though Betfair offers accumulator bets for its exchange, they are limiting them in number and type.
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