A betting exchange is a website which allows it’s members to bet against each other instead of a bookmaker.
On betting exchanges you can “back” and “lay” bets.
To back a bet means to bet on a certain outcome. This is essentially the same as placing a bet with a bookie.
To lay a bet means to bet against an outcome. This lets you take on the roll of the bookmaker.
You will collect the backers stake if they lose their bet or you will pay them their winnings if their bet wins.
The betting exchange matches backers with layers and makes it money by charging a small commission on any winnings.
Another main feature of a betting exchange is that you can chose your own odds.
The betting exchange will show you what odds you can back or lay and get matched on instantly.
However if you don’t want to place your bet at those odds you can place a bet at whatever odds you like and your offer will be put into the betting exchange and remain unmatched until someone accepts the offer or the event passes.
What is the Best Betting Exchange?
There are 3 main betting exchanges that I am going to talk about. Betfair, Betdaq and last but certainly not least Smarkets.
Betfair is by far the biggest betting exchange in the world. Betfair has more markets to bet on than all the other exchanges.
Betfair also has the most liquidity compared to other betting exchanges meaning you should not have a problem getting your bets matched.
The only downside to Betfair is the commission.
Betfairs commission rate is the highest of all the exchanges at 5% on all winnings.
For this reason I would recommend trying to get your bets placed on another exchange before using Betfair.
Betdaq is the next biggest site behind Betfair.
Betdaq only charges a 3% commission on all winning bets so you will save yourself a fair bit of money placing your bets here instead of betfair.
However there are downsides to Betdaq.
The website layout is clunky and it’s pages are often very slow to load.
Also, the liquidity on Betdaq can be fairly poor on most markets so you can sometimes have a little bit of trouble getting bets matched.
Smarkets was founded in 2008 and is unsurprisingly growing rapidly.
Smarkets only charge a small 2% commission on winning bets and the liquidity is good on most markets.
It has a very clean and easy to use interface and is quickly becoming my favorite betting exchange.
I tend to put most of my bets through Smarkets these days and use Betfair as a backup.
Smarkets is in my opinion the best betting exchange available and it will only continue to get better as more and more people begin to use it.