In this article, we will explain everything you need to know about the Betfair exchange vs Sportsbook
The modern-day gambling industry produces a yearly profit of around £14 billion for bookmakers in the United Kingdom. This number continues to rise by over £1 billion each year.
Globally, that amount is expected to be up to £625 billion. The industry has provided work to around 100,000 and 125,000 people between the betting area such as arcades, casinos and bingo.
Traditional bookmakers have been in existence for many years, and you can trace them back to the 1790s and Harry Ogden. He is regarded as being the first bookmaker in the United Kingdom, and while new betting markets and the way people can bet has changed, the basic principles have remained the same.
Betfair exchange vs Sportsbook history
It wasn’t until the turn of the millennium when we saw the first major betting exchanges. Betfair was the first of the big betting exchanges to emerge, but today there are several available including Smarkets and Matchbook.
With betting exchanges and traditional betting companies running alongside each other online, what are the main differences you should be aware of before placing a bet?
At a traditional betting website, you can place what is known as a back bet. You bet against the bookmaker, and if you are successful, the bookmaker pays out your winnings. That is the only option you have at a bookmaker.
However, when placing a bet using a betting exchange, users can both back and lay bets. What this means is users at a betting exchange can bet for an event to happen (like at a standard bookmaker) and back against an event to occur (lay bet).
When placing a lay bet at a betting exchange, you are effectively becoming the bookmaker. For example, if you put a lay bet on Manchester City, you are betting against them and need the opposition to win or for the match to end in a draw.
A traditional betting company makes money by accepting bets and taking the money from losing bets.
A betting exchange makes money by charging a small commission on each bet placed, usually between 2% and 5%.
At many of the major exchanges, this is only paid on winning bets, but at smaller exchanges, it could be on all bets, so always check beforehand.
The second main difference between bookmakers and betting exchanges is the odds. Without the middle man (bookmaker) taking a cut on the bet, the odds are usually superior on a betting exchange. For example, ahead of the Manchester City vs Chelsea game in February 2019. You could also back Chelsea to win at 11/2 at a standard bookmaker, but the same outcome was on offer at 13/2 at a betting exchange.
Even when placing a £10 bet, there is a significant difference here and over time that will soon add up.
When using a betting exchange, you can set your odds, and if someone is willing to accept them, the bet will be matched. It gives you greater flexibility when betting and you do not have to merely take the odds handed to you by the traditional bookmaker.
While traditional betting companies will often set a restriction on the amount of money, you can stake, betting exchanges will not. The liquidity determines the amount you can bet, and the betting exchange is merely acting as an intermediary for users to place bets. A betting exchange is not concerned with the outcome of the event.