Exchange betting is the choice of professional gamblers over fixed odds sport books and if the professionals use it there must be a reason. The availability of betting exchanges to the average punter has only been possible since the online betting revolution. The first exchange was launched in 2000 by Betfair and this form of online betting has seen faster growth than fixed odds equivalents.
Exchange betting is a form of peer-to-peer gambling that has a ton of advantages over conventional fixed odds books. Effectively the odds are set by you and this allows you to cut out the middle man adding value to your bets and giving you control over the markets you want to wager on.
Users have the option to set their own odds for others to bet on (laying) or take odds offered by other punters (backing). The betting exchange takes a commission (of winnings and sometimes stake loses) and all of the rest is for punter. Odds are almost universally higher on exchanges vs fixed odds and the system also allows customers to 'arb' whereby punters back a bet with a bookmakers and then lay on the exchange to guarantee a small profit.
List of Recommended Betting Exchanges
Betting Exchange Reviews
The Betfair exchange was the first to open back in 2000 and is now the biggest sports exchange in the world. This means if you are looking for choice, market size, liquidity and odds then you are likely to find the highest of all of these at Betfair. The Betfair commission rate is not great and that is largely the tradeoff for access to such expansive markets.
The first ever exchange market was offered for the Epsom Oaks back in 2000 and by 2004 turnover had exceeded £50M, in 2010 the company was listed on the stock exchange and in fact only launched their fixed odds book back in 2013 so you can see the vast majority of the company's value comes from the exchange.
Betfair claim process well to over a billion bets a year with getting on £60 Billion wagered total. That is around 5%+ of British GDP and equates to more individual transactions than performed on the European stock exchange market!
Commission Structure – Betfair charges a commission on your net winnings on a market. If you have a net loss on a market you do not pay commission. The market base rate is 5% but you can get a discount on this based on how much you bet. You will get 10 points for every £1 commission that is paid (for a net win) or implied (for a net loss). The more points you have the higher the discount (see the table below) up to a maximum of 60%, this equates to 2%, see the table below. Your discount rate decays by 15% each week but you are entitled to have a 'Betfair Holiday' week for registering and then one for every three months thereafter. Please not you will not be able to exceed 20% discount until you have verified your account with suitable ID.
Markets – It would be easier to cover what markets the Betfair exchange does not cover their list is so expansive. Pretty much every sport you would find in a fixed odds book is available including sports you are not going to find on other exchanges readily, such as volleyball, handball, Aussie rules, financials, all American sports, etc. Combined with the strong odds and liquidity available on even small markets if you like to bet on more than your standard sports then this is the only home for you.
Odds and Liquidity – This is Betfair's strongest point. With so many customers and so much activity on their exchange they are able to offer huge liquidity in even small markers and consequently have some of the best odds around.
Minimums and Maximums – Maximums can be sky high for big markets such as Premier League football due to the amount of money in this exchange. Minimum bet is a little higher than others at £2.
Live Bets & Cash Out – More in play exchange markets than anywhere else. You will find an in play market 24/7 all year round with these guys. For live exchange betting there is no more choice that with Betfair. Full Cash Out availability on single markets, this is definitely the best cash out feature available on an exchange, cash out is even available on multiples unlike others.
Other Promotions – Not necessarily a strong point of the exchange but a very strong point of the fixed odds sportsbook. This is great as a punter as you can move between the fixed book and the exchange depending what provides the best value.
Payout & Banking Methods – Betfair offer an absolute plethora of banking and payment options that you can read about in our main Betfair review and details for specific methods can be found in our banking section.
Live Streaming & Extras – Betfair have lots of extras and if you like features then there is no better. They have their own betting forum, news and tip area, live streaming of loads of sports in the Betfair video section and more. Not to mention all of the other features available through Betfair's other products.
Multiples & Mobile – For the biggest choice in multiples exchange betting then use this exchange. The full exchange is also available through the mobile site and mobile app
Exchange Games – Worth a special mention just because of the size of this feature. If you like exchange games then Betfair have everything from standard table games to bullseye roulette.
Customer Service – Betfair's customer service is 24 hours a day with free phone, live chat, email, twitter and post. All details can be found in our Betfair review.
Fixed Odds, Casino and Other Features – Betfair's fixed odds book is going from strength to strength with some of the best markets, promotions and features in the bookmaking word. They have pioneered many tool such as cash out on horse racing and new forms of accumulator insurance. The fixed odds book is a great alternative and if you like to drift between the both you will be very happy here. Betfair also have a fixed sportsbook bonus that you can claim that is higher value. In addition Betfair host casino, live casino, poker, games, Macau, virtuals, bingo, tote and so much more.
Conclusion – If you think biggest is best then the Betfair exchange is definitely for you. In the long run you can perhaps get more value elsewhere but if you want a one stop shop you may never bet elsewhere. I recommend you use another account with lower commissions for bigger markets such as major football but always keep a Betfair account simply for choice and especially for less popular markets.
BETDAQ is the trading name of Global Betting Exchange Alderney (GBEA) and are in fact now owned by Ladbrokes (who themselves are owned by GVC holdings) so I won't go in to this exchange in quite as much detail as much of the information is already in the Ladbrokes section above. There are some major differences however, for example this is a stand-alone exchange with an alternative welcome bonus available (you can claim both a BEDAQ and Ladbrokes welcome offer), different commission and different regular promotions. BETDAQ now also have a fixed-odds sportsbook too.
The BETDAQ exchange has also been around since 2000 the same as Betfair and trading since 2001. It was established by an Irish entrepreneur Dermot Desmond but was sold in 2013 to Ladbrokes. The exchange handles around £75-100M in bets each week putting it in a strong position to compete with Betfair. Of course now part of the bigger Ladbrokes group the exchange has a bigger customer base, more liquidity and better all around odds, so for those that like to shop around it is win-win.
Since becoming part of GVC BETDAQ as of 2019 have added a full casino and sportsbook to the site making it a more complete all round site.
Commission Structure – BETDAQ have a different commission structure to Ladbrokes. Commission is only paid on net winnings with a flat 2% from offers you make on the exchange. In fact, it is much better because you actually only pay commission on Horse Racing; Greyhound Racing; Football; Cricket and on all Exchange Virtuals markets, all other sports offered on the exchange have a 0% rate.
Other Promotions – This is where BETDAQ stand out and another reason to hold an account. If you want a stand alone exchange with stand alone exchange offers then this is a great option. It is common to see free bet offers for Virtuals, cashback on loses and feature 0% commission offers for some events.
Payment Options – All fee free with all major debit cards supported and well as bank transfer and eWallets Skrill and Neteller.
Trading Tools – This is another area where BETDAQ are different to other exchanges. The exchange have a range of tools that allow you to customise the exchange for your needs. These downloadable features have greater usability and flexible interfaces. A proper professional tool.
Sports, Pools & Casino – Recently BETDAQ launched a fixed-odds sportsbook developed in house from the Ladbrokes platform. This is in addition to new products such as casino, virtual sports and pools betting.
Extras – As with Ladbrokes you can also place multiple bets, play games as well as playing virtuals and there is a fully functional mobile app capability and live betting is fully stocked. This exchange site also has a great tip section as well as the same markets available as described in the Ladbrokes section.
Conclusion – If all you want is a good exchange with top liquidity, odds and options without all of the other features like a fixed odds book, then this is the exchange you will feel most at home with. The interface is clean and this does make a nice change to the likes of Betfair. BETDAQ does have some casino games however if you fancy something on the side
Ladbrokes are a colossus of British bookmaking and they wouldn't be complete without a full betting exchange to go with it. Ladbrokes purchased BETDAQ back in 2013 in a €30M deal immediately bringing a huge amount of exchange knowledge and experience to the bookmaker.
The Ladbrokes exchange was designed to hit the ground running with a full range of markets and great odds and liquidity. Ladbrokes immediately undercut Betfair and have remained generally more competitive ever since.
Commission Structure – Ladbrokes have a flat basic rate of 2% on net winnings, the same as Betfair, and as soon as you start paying commission you can start earning points. A point is earned for every £25 won or lost across exchange markets. At the end of each week (4am Monday) the points earned in the week are multiplied by 1 minus the % discount from the previous week and added to 85% of your total winnings from the previous week (15% weekly decay). This means all points are cumulative with 85% of your previous weeks' points always rolling over to the next week. For regular bettors this can add up in no time.
Markets – Ladbrokes cover every major market you are likely to want in their exchange section. Markets include Horse Racing, Football, Greyhound Racing, Tennis, Golf, Cricket, Rugby (League and Union), Darts, Snooker, American Football, Basketball, MMA, Boxing, GAQA, Virtuals, Politics and Specials.
Odds and Liquidity – With such a huge customer base expect to find some of the best odds and market liquidity around. This means for less popular markets you can often find better odds than smaller competitors and once you calculate your commissions Ladbrokes very often come out near the top.
Minimums and Maximums – Ladbrokes have very clear terms when it comes to this. Minimum stake is just £1 and there is no maximum apart from that defined by your account balance.
Live Bets & Cash Out – Live betting and in play markets are on offer every day. For major widespread events, especially those where television coverage is available, expect to find plenty of in play markets. A live bets panel allows you to see the status of your bets allowing you to quickly change odds or stake of unmatched bets or even cancel them all together. Cash Out is also on offer, in an exchange this works slightly differently so be sure to read up in advance.
Mobile – Ladbrokes have a full mobile and tablet exchange website with all the options and functions of the main desktop site including in play betting and cash out.
Best Exclusion – A nice feature provided by Ladbrokes is best exclusion. If you take odds and immediately someone else offers a better price then you will automatically be given the better odds price if your ebt id being processes. A really great feature for in play betting especially.
Exchange Multiples – Ladbrokes give the option to place multiple bets on many markets with straight accumulators an full cover bets available.
Customer Service – Available 24/7 by live chat, email, free phone as well as post and twitter. Agents are really knowledgeable and helpful, see all Ladbrokes contact deatils.
Fixed Odds, Casino and Other Features – Ladbrokes have possibly the biggest fixed odds sports books around as well as providing all other products you might expect from an online bookmaker including casino, live casino, games, Vegas, lotto and bingo. You can even claim additional bonuses for signing up to these other sections. As an absolutely massive bookie these guys also have thousands of high street shops, great live betting features, cash out, tons of live streaming for all sorts of sports and some cracking regular promotions for existing customers. See our Ladbrokes review for more details.
Conclusion – Ladbrokes have seamlessly integrated their exchange into their already expansive operation. The Ladbrokes service is applicable to punters of all levels whether you bet on the exchange full time or like to drift between the fixed book and exchange then this is perfect for all players.
How Do Betting Exchanges Work?
What is a betting exchange?
Exchange Betting is actually closer to what betting was like before the age of mega high street bookmakers. Effectively an exchange is a meeting place for normal people to bet with each other.
All you need to do is match your bet either by taking someone else odds price (backing) or by offering a price for someone else to take (laying). The exchange operator simply puts people together to bet in the same way a dating website would match couples together. For the privilege they then charge you a commission on your bets, usually just your winning bets.
The concept is really simple. Find a market that you would like to bet on and then choose whether you want to back (bet on an outcome to happen) or lay (bet on an outcome not to happen) a bet. Overall value here is generally much higher as first of all you are not having to pay the bookie directly and second of all there is far more competition.
Everyone laying bets on the exchange is in effect their own bookmaker and so this is more like a single site with 1000's of separate bookies on there.
This is very much the same as taking a bet in a fixed odds sports book, you are betting on something to occur, except that there are often several prices available to take. The odds you are given is a price offered by another person laying the bet. Let's say you want to bet on Manchester United v Arsenal and you want to back Man U to win. You will see the usual markets of win / draw /win but you can also view the full market which shows you other odds prices offered for the same outcome. The amount below the odds represents the size of the market and this is the maximum amount you can stake at that price, this can also be termed the 'liquidity' of the market. Better odds prices tend to have lower liquidity.
When backing on an exchange you only generally pay commission on whatever you win, if your bet loses you don't have to pay any more than you stake. Maximum commission is usually 5% but you can get this as low as 1% with some operators or through loyalty deals.
Winnings are paid out straight away into your betting account, just like with a fixed odds book. Maximum bet amount is simply restricted by the size of the market although minimum bets tend to be a little higher than on a fixed odds book at £1+, this is simply because smaller bets are not worthwhile for the operator due to low commission rates.
If you lay a bet you become your own micro bookie. Here you are in effect betting on an outcome will not occur so you offer an odds price to someone else who thinks it will occur. You can choose to jump on the bandwagon and offer the same odds as the others or be unconventional and make an offer to the market.
When you make an offer to the market you propose an odds price and a maximum liability (this is the maximum you are prepared to allow others to stake on your bet), lets say £100 at 2/1. This means you will take bets up to £100 at that price. With some exchanges you can also set this by payout rather than liability, i.e. the amount you want to win. Either way if you win you get to keep whatever was staked on your line minus the commission to the bookmaker (less than or equal to 5% depending on your exchange and any loyalty deals). If you lose you lose whatever people have staked up to your maximum liability.
You can only have a maximum liability less than or equal to your account balance.
Matched and Unmatched Exchange Bets
Matching is simply pairing someone laying a bet at a set price with someone else who wants to back a bet at those odds. When you back or lay on an exchange you can choose to take odds where there are already offers (people are laying bets and backing bets at that price), if you take this your bet will immediately be matched and you just wait for the result. Alternatively, you can propose a new odds price by offering a bet. Your bet is only matched if someone else either lays the odds you are looking for (if backing) or backs the odds you are laying. Any unmatched bets are refunded without and commission being taken.
A partially matched bet occurs when a bet is matched but not for the full stake amount. In this case you can choose to match a proportion of your original bet or wait for the market size to increase to your stake level.
When placing exchange bets, it is often a balance between getting the best price and making sure your bets match. If you are laying but at low odds few people will stake but if your backing at high odds the market may have a more limited size. It is all about risk management, you are pitting your you want to make guess as a punter against somebody else, and that is part of the fun.
For those that do not want the hassle of having unmatched or only partially matched bets could consider the MatchMe tool from Betfair (click to read more). This sets an odds tollerance to help match bets for the full stake in volatile markets.
What is Market Liquidity and why does it matter?
The liquidity of an exchange market is the amount of money available to either stake (if backing) or the maximum liability if you lay a bet.
Liquidity is effectively defined by the number of offers available at that given price. The amount of money in matched bets is usually displayed above the market. Bigger events (e.g. top premier league game) will have higher liquidity than a smaller event (e.g. a snooker game).
Within an event major outright (W/D/W) lines will have a greater liquidity that a smaller market (correct score). Big exchanges such as Betfair have massive liquidity and for smaller events in particular if you would like to stake a fair chunk of cash you will be better off with the Betfair. For most regular bets however you should find all exchanges have sufficient liquidity for the average punters needs. As we always say at OnlineBetting you should open several accounts and then pick the exchange betting site with the right price and liquidity for the event you want to bet on.
Market Availability and Bet Types
Effectively everything that is available on a fixed odds sports book is now also available on a betting exchange. You can bet on outrights, over/under, handicaps, you name it someone will be offering a line or willing to back it if you offer it. As soon as you start betting on an exchange you will immediately see the better raw value compared to a fixed odds book. It is
Where exchanges are a little different is with bet type availability. You can now bet on multiples with most exchanges including straight multiples and full cover bets such as Lucky's, Yankees, etc. If however you want to place more complex bets such as forecasts, conditional bets or speciality bets you may need to go to a conventional fixed odds book.
What is a Betting Exchange Commission?
If you are backing a bet and you win you pay commissions on your winnings, if laying a bet and you win you pay commission your winnings. You can see here how the bookie earns commission either way as when someone wins somebody else has to lose. If the bet is void no commissions should be charged.
Some exchanges may charge commission on both winnings and lost stakes. This way the operator is earning twice from every transaction by taking commission from the winnings and the losing stake. This only usually happened with exchanges that have really low commissions in the first place anyway so it is a balance. Would you rather pay higher commission but just on winnings or lower commissions but on both winnings and loses? In general commission rates are between 1-5%.
Bookmakers vs Exchanges
There are several big advantages and several significant disadvantages to betting on an exchange over a sportsbook. I would recommend you have an exchange account and a fixed odds sports book account, this way you get the best of both worlds. You can do this by opening an account with a betting site that does both such as Ladbrokes or Betfair or open an account with a standalone exchange such as BETDAQ and a fixed odds book with another site. See our fixed odds bookies here.
Advantages of Exchange Betting vs Fixed Odds
The biggest advantage has to be the better raw odds value. Odds prices on exchanges are around 20% better on average than fixed odds but for some markets it can be over 100% better. The reason behind this simply is competition.
In a normal fixed odds book a trader sets the odds based ultimately on their own opinion of how much the market is worth. They take into account punters interest in the market (number of bets and amount wagered) in addition to personal knowledge about the event. They also look at what the other bookies are doing which is why odds don't vary much between fixed odds betting sites. In general, a trader will be conservative simply because they have a job to do which is make the bookmaker money.
On an exchange you have thousands of micro bookies all with different opinions on what is worth backing and laying and at what prices. This means it is highly likely you will match your bet with someone of the opposite opinion. As you only have your own money to win or lose bettors are not constrained by the same rules as traders and so in general prices are always better.
A second reason an exchange has overall higher value is the lower commission taken (5% or less) and the nature of how an exchange earns money. A fixed odds sports book will operate on higher commission rates simply because they want to earn a profit and also because they don't know who will win. If a fixed odds bookie is over exposed on a specific book they could stand to lose money. An exchange operator however will never lose, all they do is match bets and then get commission whoever wins.
Finally, an exchange gives you the option to arbitrate and mitigate your risk. By backing on a fixed odds book (or another exchange) and laying on an exchange you can guarantee yourself a small profit (or mitigate any loss). This is one reason why people call exchange betting a living and the main reason why professional gamblers use these more than fixed odds books.
Disadvantages of Exchange Betting vs Fixed Odds
One disadvantage of exchanges is market availability. Although big exchanges like Ladbrokes have a huge number of markets, and certainly far more than they used to, they will never offer as many lines as a fixed odds book. For more obscure lines you may need a normal bookie. For smaller events too or obscure betting lines you may find on an exchange that the market liquidity is low. If you want to stick £1000 on a minor Danish third division team for example you are probably not going to get anyone to match that bet in an exchange so you may have to go for fixed odds.
Exchanges rarely run offers and promotions, well certainly not on the scale of some of the fixed price betting sites. You may see the occasional promotion such as lower commission rates on certain events but in general it is what you see is what you get. This means it is sometimes worth looking a fixed odds sportsbook offers, even though the odds price on the fixed book will likely be lower than the exchange when combined with the promotion the bet may be better value. Another reason to have both types of account.
For new customer's exchange introductory offers are generally worse than for normal bookies. It is often worth signing up with the fixed odds book to claim a far greater bonus and then betting on the exchange with any later winnings from the free bet or bonus. This is only possible with the likes of Betfair and Ladbrokes that offer both products. While you can move funds between the two products you will not be able to use a sportsbook free bet on the exchange and vice versa.
Arbing / Arbitration Betting
Arbitration, or arbing as it is often shortened, in the betting world simply means playing the numbers to ensure you always win. Variation in odds between different fixed odds and exchange bookmakers means that if you back opposite results with two different operators, both with favourable odds, then you will guarantee that you win. For example, you are betting on Arsenal v Manchester City, with one bookie or exchange Arsenal, draw no bet, are 6/5 and City are 5/6 however with another Arsenal are 5/6 and City are 6/5. In this instance if you were to back Arsenal draw no bet with the first and City draw no bet with the second you guarantee yourself a small profit, this is arbing.
Although not illegal a fixed odds bookmaker could close your account if they suspect you are using them to arb. In spite of this many professional bettors can make a lot of money by arbing between different exchanges. Exchanges care less than fixed odds bookies about arbing because the exchange commission structure means the operators always makes money.
Do I have to pay tax on exchange winnings
The short answer is no, this is classed as gambling and so the customer pays no tax either when placing a bet or when receiving winnings. Tax is charged to the operator instead as a point of consumption tax. Full details can be found in our gambling tax article.
Exchange Betting Licensing and Responsible gambling
Betting Exchanges are regulated in the same way as conventional betting sites. All exchanges that operate in the UK must possess a Gambling Commission licence. By possessing a licence, they must adhere to the Gambling Act 2005 and 2014 and this includes protecting vulnerable people, having a proper complaints procedure and being clear and honest in their terms.
History of Betting Exchanges
Exchange betting is not a million miles away from trading on financial markets. Someone wants to sell something for a set price and you want to buy for a set price. Why therefore did it take so long for sports betting exchanges to emerge? Well this is mainly to do with technology. Before the internet it was difficult to pair bettors together in one place to exchange bets, it was even more difficult to do this in a market where odds fluctuate and offers change.
The movement of the internet into people's homes in the late 1990's suddenly created an opening for exchange betting between the average Joe. Now you could sit at home and both back and lay bets at the right price and for the right amount. No longer did you have to rely on the markets and prices set by your high street bookmaker and it became immediately evident that by cutting out the bookie punters could get far better value from exchange betting.
The first exchange was flutter.com but this was quickly swallowed up by Betfair soon after their launch in 2000. Betfair have maintained a monopoly of the market ever since with the only serious competitor BETDAQ sitting with just under 10% market share. Exchanges are more difficult to make money from than fixed odds books and casinos and whereas Betfair have moved into all major bookmaking products BETDAQ have stayed true to the exchange model. Fortunately, they did not go under like the World Bet Exchange (WBX) did but were bought out by Ladbrokes in 2013. Ladbrokes now have the opportunity to become a serious competitor of Betfair and equal up the betting exchange market in the UK.
WBX (World Bet Exchange) CLOSED
What Happened to WBX?
The World Bet Exchange (often referred to as WBX) was founded back in 2002 by Malcolm Gray but did not launch until March of 2006. The WBX holding company was based in Notting Hill in London (England) with World Bet Exchange Limited and WBX Members Funds Limited as separate companies. This meant members funds were held separately in a trust with external auditing preventing improper use of customer funds as seen with Sporting Option's where the owners were accused of creating their own liquidity. Sporting Options was later bought by Betfair.
It was Malcolm Gray's intent to take his time in setting up his exchange so that he could attempt to compete with the sports betting exchange held (and still held) by Betfair. In an interview with the Racing Post before the company launched he stated "In an industry where the current market leader has a virtual monopoly, we believe the arrival of WBX will put every exchange player back in control. We will continually seek to offer a vibrant, exciting and innovative alternative to Betfair, and we hope this will promote healthy rivalry".
The company went all out from the start to entice customers away from Betfair. They were in fact the fourth biggest sponsor of horse races before they had even launched as a betting exchange. The company created their own WBX Hurdling Tripple Crown sponsoring the Fighting Fifth Hurdle, the Christmas Hurdle and the Champion Hurdle.
WBX attempted to win customers by charging around 35% less commission than the Betfair Exchange. In just two years the model seemed to be working well and in 2008 the company reported over £500m in bets on the WBX exchange.
On March 16th 2015 WBX announced it was closing and it did so the same day. This highlights the difficulty in making money from exchange betting. Compared to fixed odds markets commissions on Exchanges are far lower. At the time that Betfair were pumping money into generating cross-products (casino, fixed odds, bingo, etc) WBX stayed true to exchange betting, simply trying to be the best exchange in the world. Not matter how much better you though WBX was than Betfair in the end the company simply could not compete with the Betfair portfolio. Most betting exchanges now run other products in order to prop up the exchange after the lessons learned from WBX.