With the Premier League back on, millions of people will be looking for somewhere to place their bets. It’s a tragic that the masses don’t use exchanges.
Betting exchanges are a relatively new phenomenon. In 20 years they’ve certainly caught the world’s attention and have worried plenty of bookmakers. Fundamentally, they work very differently from traditional sports bookmakers that most people are used to using.
It’s now a much rarer site to see a professional bettor who still uses traditional bookmakers for the majority of their bets. Although some bettors will still opt to place their bets with a bookie, it’s never made more sense to use an exchange.
Here are five of the top reasons why smart bettors use betting exchanges.
#1 Better Odds
Bookmakers make most of their income by offering a large overround. In other words, they price their odds lower than what they should be so that they make money whatever the result. For example, in a win/win market, you will usually see bookmakers offering 1.85 on either side of the book when a true 50/50 market would be odds of 2.0.
In essence, bookmakers make a profit by offering odds with a margin. It’s the margin (overround) where they make their money.
Betting exchanges differ in that the odds are defined by whatever is available in the market. Exchanges aren’t interested in keeping an overround. In fact, betting exchanges aren’t really interested what odds are on offer. This is because they make their money on a commission basis. Betfair Exchange, for example, takes a 2-5% commission on all winning bets.
This typically means that betting exchanges have better odds than bookmakers. Of course, bookmakers will sometimes offer better odds but this is usually changed rather quickly!
#2 No Limitations
I’ve had a few bookmaker accounts over the years but they typically don’t last very long. Some have even been closed or limited after 2 bets!
Although rare, it’s sometimes possible to find good value odds at a traditional bookmaker. The problem is, you won’t be able to get away with it for long. The business models of most bookmakers rely on taking lots of low-value bets (due to their overround). If they notice an account that is managing to find good value odds, they will generally limit or close the account for business reasons. Unfortunately, they are perfectly entitled to do this.
Most bookmaker accounts like these will either be closed completely or limited to a low max-bet amount. This can often be something stupidly low like £0.05, essentially making it a waste of time for the sharp bettor.
Betting exchanges have no reason to limit or close accounts for reasons like this. It makes little difference to them if people win, lose or find valuable odds. At the end of the day, they’ll still get their commission.
#3 No Max Bet
Even if you’re bookmaker account isn’t limited, there will always be some kind of max bet. It’s the company’s decision to change this max bet amount and it will vary from customer to customer.
Betting exchanges only have one limit to the amount of money you can bet, the amount of money you have in your account. The only limit on a max bet at an exchange is the money available in the market. Considering most UK horse races have around £500,000 matched, there isn’t usually much of a problem getting large stakes through the market.
In general, the more popular an event, the more money there will be available in a market. Larger race meetings such as The Grand National and Royal Ascot will attract huge amounts of extra money to the markets, making it much easier to place large bets.
#4 Lay Bets
The option to place a lay bet on a betting exchange opens up a world of possibilities for smart bettors. Instead of having to back winners, they can make money from losers too!
Traditional bookmakers only offer the option to place back bets on sports markets. On the other hand, betting exchanges actually rely on lay bets in order for them to work. For example, if I place a back bet in the market, it will only get matched if someone places an opposing lay bet on that same outcome.
#5 Exchanges Enable Sports Trading
With the birth of betting exchanges, many professional bettors have switched to trading the sports markets instead. When done properly, trading will generally be a less bumpy ride than straight betting. Ultimately, bettors are always reliant on who wins the race. For a trader, it really doesn’t matter who wins so long as they can make a profit on the price movement at some point.
There are a few things that betting exchanges offer that make trading possible. We’ve already covered one of them above. The ability to place a lay bet means that we can effectively cash out of a position or green up. If you try to cash out of a bet at a bookmaker, you’ll notice that they will usually offer you a very bad deal. Assuming that there is money available at the right odds in the market, you’ll be able to cash out of a betting exchange market for a better deal. Third-party applications will typically make this much easier to do.
Third-party software such as Geeks Toy will allow you to easily create stop-losses, which can make trading much easier for those that use them.
Make The Smart Choice
Whether you are new to betting or have been at it for years, you should definitely reconsider your approach if you’re still using traditional bookmakers to place your bets. Not only do you risk getting limited, accounts frozen or worse, but you’re usually getting much worse odds than at an exchange.
Be a smart bettor and use an exchange!