What Is a Betting Exchange? Examples, Pros & Cons
- Betting exchanges allow you to bet against others instead of betting against a traditional bookmaker.
- A back bet is predicting that an outcome will happen, and a lay bet is predicting that an outcome won’t happen.
- Odds are more competitive than traditional bookies because they are set by market supply and demand rather than by the sportsbook itself.
- Betting exchanges charge commission on bets, so always check the commission rate before placing your bets.
This concept of betting exchanges has recently boomed in popularity in esports betting because it gives you much more competitive odds and better flexibility than going through a bookie.
In this guide, we’ll give you an overview of how betting exchanges work, why they could be advantageous to your betting journey, and how to find the best betting exchanges for esports.
What Is a Betting Exchange?
A betting exchange is an online marketplace where bettors can wager against each other instead of placing bets with a bookmaker, like traditional esports betting sites.
In a standard sports betting scenario, the bookie would set the odds and take the opposite side of your bet. So, you’re essentially betting against the bookmaker. A betting exchange connects two bettors instead. One bettor would believe that an event will happen (let’s say a team will win, for example), and the other believes that the event won’t happen (in other words, the team will lose).
The online exchange platform simply acts as the middleman between the two bettors. They’ll match bets between bettors and take a small commission fee on winnings.
The exchange model gives you more control and flexibility in your betting. You can set your own odds, accept someone else’s odds, or even switch sides mid-event depending on how the match plays out.
Some examples of bets you could find on an exchange can range from whether a team will come back from behind to win in CS2 to backing an underdog in League of Legends.
How Does a Betting Exchange Work?
The process at the exchange is quite simple. You’ll choose whether to back or lay an outcome, set your stake, and either accept the available odds or set your own. From there, the exchange will match you with other bettors who have the opposite bet that you put a stake on.
In esports betting exchanges, you can bet on markets such as match winners, map winners, total kills, handicaps and even match-specific events like first blood or first to destroy a tower.
What is a Back Bet?
A back bet is when you wager that an outcome will be positive (something will happen). If your prediction is right, your bet will win based on the odds that were agreed when your bet was matched on the exchange.
Example: You back Team Liquid to win a Counter-Strike match at odds of +180 with a stake of $50. If they win the match, your bet lands with $90 profit and your $50 stake returned to your wallet. If they lose, you lose your $50 stake.
What is a Lay Bet?
A lay bet is when you predict that a specific outcome won’t happen. Going back to your traditional bookie example, in this scenario, you are the bookmaker.
In other words, you will be paying out if the outcome is positive (or does happen), but if the outcome doesn’t happen, you keep the bettor’s stake.
Example: You lay Team Liquid to win at odds of -180 (the opposite of the back bet, which was +180). But you need to risk $90 to win their $50 stake. So, if Team Liquid loses, you get your $90 back and you keep their $50 stake. If they win, you pay out their $90 profit and return their $50 stake.
How to Find the Best Sports Betting Exchanges
Just like with a traditional sportsbook, having the right sports betting exchange can make all the difference to your betting experience. At their core, most exchanges do the same thing: they match bettors against each other.
Each one is unique in terms of its quality and performance, which is why it’s important to find the right one. There’s more to it than just competitive odds; you need to find an exchange that makes it easy to find and place bets across a wide range of markets.
Let’s take a look at some of the most important factors to keep in mind.
Liquidity
In a betting exchange, liquidity refers to the amount of money available in the markets for back or lay bets. An exchange with high liquidity means that your bets will be matched faster and at the odds you’re looking for.
In an exchange with low liquidity, you might struggle to place larger bets or get the odds you’re looking for.
Betting markets
The best betting exchanges offer a wide range of markets to choose from. You need to look for exchanges that offer more than just match-winner bets.
Having more variety gives you more options, but it also means that the exchange attracts more bettors looking for unique markets to bet on. Plus, the top exchanges will offer wagers on niche and specialist markets instead of just covering major esports titles and tournaments.
User experience
Another crucial factor to keep in mind is the overall user experience. A smooth interface that’s easy to use can make your experience with the exchange much better, especially if you’re placing live bets during an ongoing match.
Make sure that markets are quick and easy to search for, and you can set and edit bets within seconds.
Commission rates
Unlike a traditional bookie, a betting exchange charges commission on winning bets. Commission rates vary between different exchanges, so it’s essential to make sure that the one you choose has reasonable rates.
Lower rates mean that you keep more of your profits and less of your money goes to paying the exchange fees.
Pros & Cons of Exchange Betting
Exchange betting is a great way to change up your esports betting experience. It adds a whole new angle to betting, and it’s well worth a try. However, it’s essential to recognise that it comes with both pros and cons.
| ✅ Pros | ❌ Cons |
|---|---|
| Better value | Lower liquidity in niche markets |
| Transparency | More complex |
| Live betting opportunities | Commission fees |
| More control | Potential delays in matching bets |
Conclusion
A betting exchange is an online platform that allows bettors to wager against each other. These platforms essentially negate traditional bookmakers by allowing one of the bettors to become the bookie. This is done through the concept of back and lay bets.
Betting exchanges give you more flexibility and better odds than a traditional sportsbook. Odds are based on market supply and demand, rather than being set by the bookmaker itself. But betting exchanges can be a complex learning curve for newcomers.
As with any form of esports betting, it’s important to bet responsibly. You need to ensure that you fully understand all the mechanics in a betting exchange, set limits on your stakes, and never bet more than you can afford to lose.
FAQs
What is the difference between a betting exchange and a sportsbook?
A sportsbook sets fixed odds and takes bets from customers. An exchange matches two bettors who back and lay outcomes against each other, with the platform taking a commission fee.
What is the most popular betting exchange?
Betfair is currently the most popular esports betting exchange. There are plenty of other exchanges, but it’s important to consider factors like commission fees, user experience, and betting markets when choosing one.
What is the world's largest betting exchange?
Betfair is the world’s largest sports betting operator, offering a wide range of markets and a large user base.
How to trade on a betting exchange?
You can either back or lay bets against other bettors. You can set your preferred odds and wait for the exchange to match you with another bettor, or accept different odds from another bettor.
How to win on betting exchanges?
Winning on a betting exchange is about understanding the markets, monitoring the live matches and doing thorough research to place calculated bets.
What are the risks of betting exchanges?
Betting exchanges have a steep learning curve, so they can be difficult for beginners to use. Odds can also change quickly, and the exchange commission fees can eat into your profit over time.
Is a betting exchange legal?
Yes, betting exchanges are legal. But it depends on your location and what your local laws are surrounding sports betting overall.
Do betting exchanges charge commission?
Yes, betting exchanges take commission fees from the winning bettor. Make sure to compare commission structures between different exchanges to find the right one for you.
