The main Betfair betting screen

It is important to note that when you place bet on an exchange you can take the odds displayed on the screen or you can simply place an order on the exchange at the price you would like to get matched at, even it if is not available. If somebody else is willing to give you the odds at that price then you have two happy customers. High demand for either backers or layers will force the market to adjust its prices as buyers outnumber sellers or vice versa, just the same as in a normal betting. But it’s not a bookmaker trying to balance his book just the weight of money coming for or going against a selection in the market.  A very interesting aspect is that because of the unique way the exchanges work the book over round, the margin paid to the bookmaker, is often negligible. On Betting Exchanges the bookmaker’s margin, the over round is displayed neatly at the top of the screen. On the back or lay side of the book the lower the percentage gets to 100% the better the whole market priced. Traditional bookmakers are simply unable to compete with the pricing on exchanges, simply because the over round is too small. Lots of people competing for the prices on either side of the book leaves little or no margin in the book. All requests to the market are free of transactions costs, except in exceptional circumstances and the consequence is that people can place speculative orders into the market and if they don’t get matched they can cancel the orders. As people ask for these prices they establish an equilibrium point. This equilibrium point centres on the lowest possible gap between the back and lay prices. This means that the prices in the market on either the back or lay side has little margin for the middle man. The consequence of this is better pricing for all the users and that is another thing that makes exchanges so popular.

Exchanges cover sporting events from all over the world and many variants of betting on those particular sports. You can bet on just about anything without worrying about whether the bookmaker will quote you a price and honour your bet. As long as there is somebody on the other side of the book your bet will be matched and honoured.

Monthly total matched bets on the exchanges are now measured in billions of pounds, so even the minority sports get significant volumes. Horse racing though continues to be the biggest source of matched bets on the exchanges, accounting for a very large part of normal monthly turnover. The reason that horse racing is such a large contributor is because it is a year long sport. In general, it is the sporting calendar that tends to be the driver of volume on the exchanges. When a major tournament is underway, bets on other regular events often wane slightly as the gambling world focuses on the highest profile event.

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