How does a betting exchange work?

Customers can wager on any outcome of an event, and bookmakers themselves will lay the bet, putting up their own money if the customer’s bet wins.

Betting exchanges, on the other hand, do not place bets themselves. Instead, they rely on other customers to back and lay bets against each other.

Sports betting exchanges charge a modest commission fee on each bet placed to earn money.

The amount of commission charged depends on the exchange’s rules and regulations. Usually, it varies from 2% to 5%, but it is possible to get 0% commission in some cases.

Why do we need sports betting exchanges?

Sports exchanges are essential when using different strategies to make money trading. The most popular strategy is, of course, matched betting, which yields a lot of profit if you prepare for it properly. Thanks to betting exchanges, we can easily place lay bets if we have previously placed a back bet at a traditional bookmaker.

What is more, the exchange allows us to use other strategies such as scalping, swing trading, dutching and others.

Moreover, thanks to the markets on the exchange, we can find out how much money is going into a particular match. In case of huge interest and a lot of money in a lower league, we can deduce that:

• there has been a leak of information about the result (fixed match)
• one of the teams is significantly weakened (injuries)
• a popular tipster (and his subscribers) placed a high stake on that match
• and many other factors

Why should we use betting exchanges?

The main reason we should use betting exchanges is the odds.

No bookmaker will offer odds as high as those on an exchange. Higher odds mean higher winnings!

In addition, on the exchange, we can also place our own – even higher – odds. Whether they will be accepted or not depends on other players.

Another advantage of using exchanges is limits or rather the lack of them.

For example, a traditional bookmaker may limit your stakes to as little as a few pence, while on an exchange, you won’t encounter such problems.

This is a definite advantage, especially for those who make their money on sports trading.

Lay betting is another positive aspect. It involves betting that an event will not happen. While we only place back bets with traditional bookmakers, the operator implicitly places a lay bet against us giving us their money.

At the exchange, we can bet both back and lay, which is a great advantage. You cannot bet that a given result will not take place at a bookmaker, can you?

Liquidity

Putting liquidity at the top of the list is no coincidence. It is the number one thing we should pay attention to from the very beginning.

Liquidity refers to the total amount of money a gambler may bet on a specific betting exchange market.

This is the maximum amount that may be placed. A wager can only be matched if enough money is available to cover the opposite outcome.

A market’s current liquidity is generally displayed underneath the odds and is continuously changing.

Even if the exchange has a fantastic offer, lots of markets, great bonuses and sensational odds, none of that matters if it doesn’t have enough liquidity because your bet won’t be matched.

All other advantages will go to hell in a blink of an eye. That’s why liquidity should be put first.

So, how do we assess liquidity across exchanges?

For a fairer comparison of the exchanges placed on the podium, we present the liquidity on each exchange in the same market.

Range of markets

The second issue to consider is, of course, the number of markets available.

The rule is very simple and irrefutable – the more, the better. There are no exceptions. Trust the experts who have spent thousands of hours in online exchanges, and you will come out ahead.

The more markets you have, the more opportunities you have to trade, and therefore the greater your chances of making a profit.  

When we talk about the number of markets, we don’t just mean the number of matches available, but also the range of markets available in those matches.

Online betting exchanges have one of the most diverse selections of markets to bet on. From major sporting events to reality television, you can wager on almost everything that has a market available.

When choosing the right exchange for us, we should pay attention to the number of available markets in the sport on which we will place the most bets.

Making money by sports trading is mainly about taking advantage of the best possible odds.

As we all know, you can’t be an expert in everything, so every novice should try to become an expert in one sport of his choice.

That’s why you should check out the offerings of the various exchanges.

Most of the less popular exchanges only offer matches from the world’s top leagues, in which it will be extremely difficult to find value.

So which exchange is the clear leader in terms of the number of markets available?

It won’t come as a surprise.

We can see perfectly clearly that the Betfair Exchange is second to none.

The number of markets was checked at 3:00 p.m. (GMT+1). Unfortunately, the three zeros in the Betdaq column is not a mistake.

Commission

As we all know, exchanges charge their customers with betting exchange fees in the form of commission. The commission is only charged on the net winnings of bets. Losing bets aren’t subject to any charges.

Contrary to popular opinion, the commission should not come first in terms of importance.

Yes, it is important, but not as much as the previous points. Of course, we’d like to be charged as little as possible, but what if the exchange with 0% commission doesn’t have the event we want to bet on?

Well, there’s always a trade-off.

So, let’s see what the commissions look like on the exchanges!

Hey, wait a minute! TheTrader’s lying!
On Matchbook you can even get 0% commission.
Pfft, and they call themselves experts?

Yes, of course, it’s possible.

However, the critical factor in evaluating commission rates is in terms of playing on the exchange for an extended period of time.

Getting 0% on the Matchbook exchange is possible, but only within the first 30 days of registering your account.

Any offers and promotions that reduce commissions can be considered as an additional opportunity to maximize profits

Hey, hold on! I have a 5% commission on the Betfair exchange,
not 2% as shown in the table! How is it possible?

It is very likely, as this is your default plan set by Betfair, but you can change it by clicking THIS link or going to:

My Account -> My Betfair Account -> Promotions & Rewards -> My Betfair Rewards -> Change Plan

As you can see in the picture above, you give up all other benefits by choosing the 2% commission plan.

However, if you are not a casual player and you are serious about trading, the 2% commission will be the best option for you in the long run.

Bonuses

And we’re not just referring to welcome bonuses, but also any other promotions offered by the exchanges.

Of course, welcome bonuses are very tempting, especially in the initial phase of playing.

Still, it is worth looking at them from the perspective of long-term playing on a particular exchange.

As we saw in the previous section, Betfair offers you a choice of plans. We can choose a plan with a commission rate of as much as 8%, but in return, we get lots of other attractive things such as a 10% refund on losses, Free Spins and Free Acca every month, plus Odds Boost!

Will we find a similar offer on another exchange?

Unfortunately, no.

Let’s take a look at the current promotions and bonuses available at the leading betting exchanges.

We check the promotions that are valid only on the exchange and not on the sportsbook.

WB – Welcome Bonus

Please note: At the time of writing, the bonuses shown above were in effect. Offer subject to change.

When it comes to the amount, quantity and quality of bonuses available, Betdaq is slightly better than Betfair and can be ranked first.

The Betfair exchange is just behind, which very often arranges bonuses based on upcoming events.

It should also be noted that Matchbook only has welcome bonuses. You are forced to choose one of the above mentioned – and the others will no longer be available.

Smarkets need to work significantly on their available bonuses, as there is only £10 offered for new players.

We hope this will change soon, but at the moment, the Smarkets exchange lands outside the podium.

Payment Methods

For some people, the payment methods may not matter at all. Still, for professional traders who have accounts at various exchanges and use many e-wallets, this aspect significantly impacts our choice.

Trading is all about taking advantage of the best possible odds.

Sometimes we don’t have funds accumulated on the exchange, yet the opportunity is so favourable that we need to react quickly and deposit funds as soon as possible to take advantage of the high odds.

That is why payment methods can play a significant role.

So let’s see what payment methods are available on the best betting exchanges:

Betfair

1. Debit Card
2. MuchBetter
3. PaddyPower Shops
4. Bank Transfer
5. Neteller
6. Skrill
7. PaySafeCard
8. Rapid Transfer
9. PayPal

Smarkets

1. Debit Card
2. Bank Transfer
3. Trustly
4. PayPal
5. Neteller
6. Skrill

Matchbook

1. Debit Card
2. PaySafeCard
3. Neteller
4. Skrill

Betdaq

1. Debit Card
2. PayPal
3. Skrill
4. Neteller
5. Bank Transfer

Betfair has an impressive advantage over its competitors when it comes to deposit methods.

However, it is pleasing to see that each of them has the option of using Skrill wallet, which is probably the most popular e-wallet on the Internet.

Betfair Betting Exchange

The Betfair exchange is the undisputed and independent leader.

We fear that for a long time, no one will even be able to match them in terms of the quality of services they offer, let alone surpass them.

They crush their competitors primarily by their number of available markets and liquidity.

These are just as essential considerations as price and property location are when choosing an apartment. They cannot be passed by indifferently.

Moreover, there are other aspects to consider as well.

While they are not the best when it comes to bonuses, they are rewarding enough, considering that Betfair runs many special promotions that give you an extra opportunity to earn money.

In addition, Betfair has a vast number of deposit and withdrawal methods available, so everyone will find something suitable.

In our experience, withdrawals from the Betfair exchange land in our account in under an hour, regardless of which e-wallet we use.

That’s enough praise. After all, they definitely have some flaws!

Yes, that’s right, nobody’s perfect.

Smarkets Betting Exchange

It didn’t take long to figure out who was in second place in the ranking of the best exchanges. It is undoubtedly the Smarkets Exchange.

They owe their silver medal to their good liquidity and the impeccable number of markets on offer.

Although they are far behind the Betfair exchange in these matters, they show excellent results compared to other exchanges.

When it comes to payment methods, they have a sufficient and satisfactory number of them.

Admittedly, it is not very impressive, but it should be enough for every trader, and the withdrawals land in our account after a few hours.

Furthermore, the only issues that definitely need to be improved are the bonuses and promotions.

Smarkets simply does not have them, with the exception of a single £10 welcome bonus.

It’s a big drawback, but looking at it objectively, it’s the only major shortcoming of the Smarkets Exchange.

After all, promotions aren’t so crucial when playing for an extended period of time and can always be updated on the spot; plus, with liquidity and the number of markets, it’s not so easy anymore.

Third Place – Betdaq and Matchbook

Choosing the exchange to come in third place on the podium caused us a lot of trouble. On the one hand, the Betdaq Exchange with adequate liquidity.

On the other, the Matchbook Exchange with a better market offering. More minor points were decisive while making a conclusive decision.

In the final analysis, Betdaq turns out to be slightly better. They offer much better promotions. Matchbook has only three welcome bonuses and nothing else.

In contrast, Betdaq has two welcome offers but many more other promotions.

What’s more, Betdaq is additionally more impressive when it comes to available payment methods, as you can also use PayPal to deposit money to your account.

Betdaq itself isn’t too bad. The only major problem is the number of markets available. Just look at the table above, where you can see that they had no live matches on Wednesday afternoon.

No need to get discouraged.

It’s likely due to the time and day, and the lack of markets at 3 p.m. on a Wednesday should not deter you from using this exchange.

Still, since Betfair and Smarkets had matches available at the time, it does mean that Betdaq could improve its offering.

Last but not the worst

The last place on our list is a mere formality. Still, before we introduce them, we’d like to remind you that out of at least ten betting exchange sites, they still found a spot on our list, so you can be sure that this and all the previous exchanges are reliable, legit and worth creating an account for.

Matchbook exchange, what can we write about them?

Well, although they are not in the Top 3 exchanges with the best liquidity, they are right behind third place in this list.

Liquidity is average but not tragic, and we shouldn’t encounter any major problems placing bets on the exchange.

Furthermore, the number of markets is at an average level.

There are mainly matches from top leagues and competitions such as Premier League, League 1, Serie A, La Liga when it comes to football and the Australian Open, Roland Garros, Wimbledon and the US Open in the case of tennis.

Nevertheless, the welcome bonus is very tempting for beginners. 0% commission for 30 days?

Who wouldn’t be tempted by that?

However, this is one of three welcome bonuses. Once you choose one of them, you can’t take advantage of the others, and Matchbook has no other promotions for existing customers at the moment.