What is a sports betting exchange? Question resolved here!

Sports betting exchanges have been around for quite some time, yet the question, ‘what is a sports betting exchange’, is by no means one with an obvious answer. After all, the majority of punters stick with mainstream betting sites to place their wagers. In this instance, ‘mainstream betting sites’ refer to standard platforms where you can bet on certain sporting outcomes.

If you’ve engaged in sports betting in the past, you’ll have a pretty good idea of how such platforms operate. However, sports betting exchanges, while somewhat similar to standard betting sites, actually operate quite differently. This is why the question of ‘what is a sports betting exchange’ is perfectly normal to ask.

what is a sports betting exchange

Of course, since you’re here, you are about to find out what the specific answer to this question is in the most detailed way possible. So let’s get started. 

What is a sports betting exchange? The three-part answer

Before I supply answers to the different segments for this question, I’d like to remind you of what was stated above. Remember – sports betting exchanges are different from traditional betting sites! So the two platforms, while they are both platforms that accept sports wagers, are totally unique from one another. 

Don’t worry; once you’ve read through the answers supplied here, all will become clear very quickly. As for the three necessary sections that answer the question, these are discussed below.

Back and lay bets – the key distinction

If you check out any traditional betting site, you will see all kinds of available markets for a range of sporting events. But despite the huge range that the top sites supply, one thing is consistent – they all focus on ‘back bets’. In other words, you are betting ‘for’ that outcome to come true. For example, if you think Manchester City will win against Brighton on the weekend and you bet on Manchester City, they must win for your wager to win.

However, sports betting exchanges offer something extra, known as ‘lay bets’. In this instance, you can bet ‘against’ an outcoming coming true. So using the example I’ve provided, you could make a lay bet against Manchester City winning the game. In this instance, if the game ends in a draw or Brighton wins, your wager would win. 

At traditional betting sites, you cannot place such lay bets, which totally changes the game for experienced punters, as you can imagine.

Revenue generated through commissions

The key distinction between mainstream betting sites and betting exchanges has been given to you above. Yet, if you think a little deeper about what this means for the bookmaker, it completely changes the entire revenue model. How so, you ask? Well, a traditional bookmaker makes money by adjusting odds, stimulating activity across the board, and then taking their share of losing wagers.

But since sports betting exchanges throw lay bets into the mix, this model wouldn’t work quite so well. Instead, betting exchanges utilize a commission structure, which is a fee taken from all winning bets made on the platform. 

Odds typically more competitive

The first two parts of this answer are relatively clear, and somewhat simple to grasp once you’ve read through the sections in detail. Yet the third part of the answer doesn’t have any tangible facts or figures, not specifically anyway. To confirm this third part, you’d need to compare a sporting event’s odds at a sports betting exchange with those provided by a traditional bookmaker. 

Of course, you can do that on your own time if you wish. But I can state with confidence right now that the odds supplied by sports betting exchanges are almost always more competitive than those supplied by bookmakers. That’s because the sports betting exchange isn’t turning a profit through odds discrepancies – they are turning a profit through commissions.

Therefore, the odds respond to the actual betting activity for that given market, and they can do as ‘long’ or ‘short’ as the market allows.

Advantages of using a sports betting exchange vs a traditional bookmaker

At this point, I like to think that an in-depth answer to ‘what is a sports betting exchange’ has now been supplied. Despite that, you might still be wondering why you should use a sports betting exchange rather than using a mainstream bookmaker. Of course, it’s up to you where you place your bets, but there’s nothing wrong with at least understanding the advantages of sports betting exchanges. 

So let me give you the main benefits right now:

  • More competitive odds
  • Ability to bet against an outcome
  • No betting limits (in most cases)
  • Transparency in the markets
  • Odds adapt better in ‘real-time’

While these are just five key benefits of wagering with sports betting exchanges vs mainstream bookmakers, there are many others. Yet to avoid creating a false image of simplicity to sports betting exchanges, I’d like to finish by stating that it will take time to understand exactly how these platforms work.

Therefore, I highly recommend starting with small sums before you are comfortable with how the entire system functions.

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Gavin Davison

Gavin is a full-time copywriter based in the UK and has developed in-depth knowledge of the igaming world by working in the betting industry for over five years. During this time, he has written thousands of articles covering various topics, including bookmaker reviews, ‘how to’ guides, bonus comparisons and much more.