Differences between Sportsbook and Betting Exchange Explained
There are a huge number of online sportsbooks available and an increasing number of online exchanges on the market. Betfair is the most notable and continues to gain popularity.
Anybody who signs up to a Betfair account will be able to alternate between their traditional sportsbook offering and the exchange. But what is the difference? And which one should you use?
Introduction to Sportsbook
Betfair Sportsbook arrived in 2012 following the success of their exchange product. To put it simply, the sportsbook is a traditional betting platform which pits bookmaker against punter.
Whether you require a bet on the UEFA Champions League, the French Open tennis, the Russian Grand Prix or the Superbowl, Betfair will have each event priced up by their team of traders.
It is similar to all other online sportsbooks with Betfair choosing the available price for punters. The lines will only alter if there is significant support across the market.
Winning bets will be paid out in full by the company with the firm offering various promotions such as ‘Best Price Guaranteed’ on a number of selections. Enhanced prices and boosted returns on selected market are also available to punters throughout the year.
It’s also possible to bet on multiples through the sportsbook. If you require a short-priced double on the tennis or a Saturday accumulator on the football, Betfair Sportsbook is the ideal platform to do just that!
Introduction to Betting Exchange
Betfair Exchange was originally devised as a platform for punters to bet against one another. Their recent television advert shows a group of friends arguing over the outcome of a football match with the dispute being settled on Betfair Exchange. They act as a mediator, a go-between.
The Exchange allows users to either ‘back’ a selection or ‘lay’ it.
Backing a horse or football team is not to dis-similar to using the sportsbook. Punters can often find bigger prices available on the exchange and can select their desired odds. In order for the bet to be placed, somebody with an opposing view must be happy to lay the selection at the suggested price. There is no bookmaker firmly holding the odds, it is fluid and can change significantly in the space of a minute. Some markets are livelier than others.
You won’t be taking money from the bookmaker. If you win, the money will come from a fellow exchange user. Betfair will take a small cut (usually starts at 5%) but this decreases over time. Regular users and big stakes punters will be granted a discounted rate on winning bets and commission can occasionally be as low as 1-2%.
Betfair Exchange will cover the majority of sports and has a range of markets priced up. Horse racing punters can back selections ‘to finish in the top 2’ (2TBP) or even ‘to finish in the top 4 (4TBP)’ whilst football bettors can back ‘Over 2.5 Goals’ or even ‘Correct Score’. Political markets are also available with the US Election and the much-discussed Brexit vote two recent examples.
What is laying?
You’ve probably heard punters proudly declare ‘I’m going to lay that horse’ or ‘I didn’t fancy them to win the Premier League so I thought I would lay them at the start of the season’, but what does it actually mean?
Laying is the simply predicting that something ‘will not happen’. If you’re finding it difficult to pick out the winner of a competitive looking horse race, you may prefer to rule one or two of them out.
For example – Swansway is the current 2nd favourite in the 14:10 at Southwell, but you don’t fancy it to get the job done, you can ‘lay’ the selection.
If your chosen horse finishes 2nd, 3rd, 4th, 5th or 6th, you win! However if Swansway romps clear of the rest of the field and wins the race, you’ll have to pay out I’m afraid.
If you don’t fancy Chelsea to beat Middlesbrough in the Premier League, you can lay Chelsea and if the match ends in a draw or Middlesbrough win, you’ll collect your winnings.
It sounds great doesn’t it? There is a slight catch…
You act like the bookmaker. If you lay a bet for £10 you are pitting your wits against another punter who is wagering £10 on that selection. It is two opposing views going head to head.
If the selection doesn’t win, congratulations! You will receive the opposing punters £10 (with a small amount of commission deducted).
However…if the prediction is errant and the selection wins, you will have to pay out!
Like the bookmaker, you’re hoping the pay-out is relatively small and not particularly damaging to your bank. If the opposing punter has placed £10 at odds of 1.79, you will have to pay £17.90 (10 x 1.79). How much you’ll have to pay-out (£17.90 in this case) is described as your ‘liability’ when you strike the bet.
If you’re reckless with lay selections you could end up losing a huge amount of money. If you start laying selections at 10.00 or above, it only requires one outside to win In order for your bank to be wiped out.
Laying takes a huge amount of research, patience and observing price fluctuations in order to be successful and profitable.
Backing and Laying for Profit
Cash out is now a regular feature which is available with the majority of online sportsbooks. However, it can often be more profitable via the Exchange.
Some punters can back a horse pre-race (about 10am for example) and the price will fluctuate throughout the day. Significant exchange money can shorten the price and profit can be made.
The selection may be 8.00 in the morning and could have shortened to 4.00 with 10 minutes until the off time. Backing at 8.00 and laying the selection at 4.00 would result in a nice profit regardless of the outcome.
Another popular strategy is backing Under 2.5 Goals pre-match (odds of 2.18 for example). The match will then go ‘In-Play’ and if it remains goalless after 20 minutes, the odds will have dropped significantly (around 1.85 for example) and a cash-out value will be available.
Similarly, you’re backing Chelsea on the exchange at 1.60. If the Blues take the lead after 17 minutes, the price will shorten to around 1.10 and users can decide whether to ‘Cash Out’ early or let it ride until the end of the match.
Advantages and Disadvantages
Fixed Prices – You know what odds you’re going to get.
You’ll win the full amount with no commission taken from your profit.
There are hundreds of markets available – if you’re looking to back individual goal-scorers, specific team goals or minute-by-minute action. You will only find these available on Betfair Sportsbook.
Multiples are available. If you’re looking to increase profit and bet in doubles, trebles or even accumulators, Sportsbook is the place to go.
Offers, enhanced prices and boosted returns are available.
A bet will be placed immediately. Selections do not have to be ‘matched’ and there is no anxious wait pre-kick off.
The prices rarely change. They occasionally get shortened but it is rarely the case that you’ll find a bigger price using the sportsbook.
It is much harder to change your mind and switch between selections for small profit.
You don’t have to pick a winner. You can make money choosing a horse or sports team not to win! The ability to lay offers up plenty more opportunities and profit can be made.
Better odds are likely to be available. These can change throughout the day (often in your favour)
Acting as the bookmaker allows you to pick your own odds and wait patiently to get them matched.
It is possible to make a profit on sporting events within the first 20 minutes or occasionally prior to the start.
There are additional horse racing markets available with Betfair Exchange. These including backing a horse to finish in the top two, three or four (depending on the size of the field)
Thousands of markets are now available through Betfair Exchange creating more backing and laying opportunities than ever before.
Betfair will take 5% commission on a winning selection.
Some bets may not get matched. This often occurs if selections are placed too close to the off time or in small unpopular markets.
Laying can be a dangerous game. Recklessly laying selections can lead to long term loss. It takes skill, dedication and patience.
There aren’t as many markets available. Backing individual goal-scorers, team goals or minute by minute markets is not possible.
Many punters will fluctuate between using Betfair Sportsbook and Exchange and it is possible to use the same wallet across both platforms.
Huge profits can be made using Betfair Exchange and knowing your way around is extremely important. It is best to familiarise yourself with the markets and it is advised that new users sit and observe fluctuations before steaming in!
If you’re happy to simply pit your wits against a traditional bookmaker then it’s best to stick to a sportsbook.