How Does It Work?

The dynamics of betting exchange sites may seem alien to you, especially if you are new to gambling.

When you place bets on your regular bookie, you see the predetermined odds and potential winnings.

Everything is somewhat preset, so you only need to place your bet and wait for your outcome.

In an exchange, when you want to place a bet, you will set your odds and specify your price.

For it to work, another player must place the opposite bet at the same price that you stake.

You could also choose to stake at an odds set by another player, meaning that the exchange is only a bridge between you. 

The next question is, how is it possible to place opposite bets?

That is why back and lay bets exist.

Back and Lay Bets For Dummies

In a traditional bookmaker, they give you fixed odds with several options to place a bet.

However, one thing is common to all the options; everything involves backing the event. We classify all their options under what we know as a back bet. And that is what makes an online exchange different.

Rather than restricting you to back bets, exchanges take it a step further and allow you to play lay bets. What are lay bets? They are the exact opposite of back bets, which implies banking on a selection to lose instead of the regular winning.

To learn more you can read our complete guide to back and lay bets.

So, all your options are broadly classified into back and lay bets in an exchange. Let’s give you a quick example.

In a horse race betting exchange, if you speculate a specific horse to win, then you place a back bet on it. That may sound familiar because it works just like your traditional bookie. It implies that you are backing on the horse to top the race, and if it doesn’t, you lose.

However, when you lay a horse, you are banking on it not to win the race. If the horse finishes anywhere other than first, you win, but you lose if it were to win the race.

This is one major thing that sets exchanges apart from regular bookies.

Sports Trading

Sports trading is what you do on an exchange. Since you are betting against an opponent as opposed to the house, it is a transaction called sports trading.

So if you sign up on an online exchange to place back and lay bets, you are engaging in sports trading. Those that do so are called sports traders.

Matched Betting

Matched betting is a strategy that allows you to capitalize on free bet offers from bookies.

You need to open an account with a traditional bookie that offers bonuses and free bet incentives.

So you will use the offer to place a back bet on a certain event, which means you do so at zero or very little risk.

After that, you will go to an exchange and place a lay bet, which is the opposite, on the same event.

Interested? Check the article: Matched Betting for dummies explained by TheTrader

So irrespective of the outcome, you are bound to win one way or the other.

That is a brief overview of how matched betting works, but bettors often apply several mathematical calculations to ensure that they are truly profiting from it.

Why Should I Use a Betting Exchange?

You now know the major differences, so let’s consider the pros of using a betting exchange:

• Flexibility: You cannot ask for anything more in a platform because exchanges give you the liberty you crave. First, they don’t restrict you to backing events; you can also choose to bet against such events. Also, exchanges allow you to place wagers at your desired odds. It is safe to say that everything is in your hands.
• Raw Odds: You may not know, but the odds on regular bookies are not the actual ones. They add some calculations to ensure that they profit from every stake, whether win or loss. However, exchanges provide you with the best possible odds and only charge commissions on your winning trades.

Reliability

Reliability in a betting exchange goes beyond the public image that they present. Normally, new brands don’t have enough to show whether they are truly reliable or not.

To determine how reliable their platform is, you need to start with years of experience in the industry.

A longer history would allow you to check the track records of such exchanges. And you can begin to question whether they have previous sanctions, scandals, or bad reputations. 

Most importantly, we also prioritize a valid license from a reputable body. A brand without a valid license is a no-go area.

You must also ensure that the license is from a trusted organization like the UK Gambling Commission. If an exchange cannot provide full details of their license, you must question their reliability.

Liquidity

Liquidity refers to the volume of money in circulation within an exchange. An exchange can match your bet with another trader placing an equal but opposite bet because they have enough liquidity. If the liquidity is not sufficient, you won’t be able to place back or lay bets.

If the liquidity is insufficient, more times than often, your bet won’t be matched, and you won’t be able to trade. After all, what is the point of an exchange if you can’t place a trade?

You can roughly deduce the liquidity by looking at how much players use an exchange. Again, a new platform would have issues with liquidity because they won’t have enough traders using their platform.

However, an exchange like Betfair has several traders from all over the world, so liquidity is one of their least problems. 

Range Of Markets

Your purpose of using an exchange is defeated if you don’t have a wide variety of sports at your disposal.

Australian Betting exchanges should feature several markets like soccer, horse racing, basketball, tennis, cricket, etc.

Even when no game is going on with your favorite sport, you can always turn to others. This way, you will never run out of options.

Having a wide range of markets also says a lot about the liquidity in an exchange. A platform offering several sports will have more players, which would generate a better circulation of money to match your bets.

Commission

As we explained earlier, exchanges use commissions rather than charging you with betting margins.

These commissions are fixed percentages that they charge, ideally on only winning trades.

Usually, it spans between 0% to 5%, depending on the platform. 

The best exchanges do not charge commissions on losing trades, so you should avoid the ones that do so.

And while many traders don’t like the idea of charging percentages on your winning trades, take it as a small price to pay for getting raw market odds.

Welcome Bonuses

You may assume that welcome bonuses are for traditional bookies alone, but it isn’t the case. Betting exchanges also offer incentives to appreciate you for signing up on their platform. These bonuses may range from deposit bonuses to free bets, no deposit bonuses, etc. 

New sign-ups are not the only ones entitled to get these incentives; they should also offer them to loyal players as a means of appreciation. 

Claiming such offers allows you to win more while staking little to zero of your money. It is also a good way of trying out an exchange, risk-free. You should also check for additional promotions for existing players.

Payment Methods

Depositing and withdrawing your money from betting exchanges should be the least of your problems. Many modern exchanges are fond of adding several untrusted and unpopular payment options, all in the name of offering varieties. 

To ensure the smoothest transactions, we aim for exchanges with the best and most trusted payment options like Credit and Debit cards, PayPal, and e-wallets like Skrill, Neteller, etc.

They are common, and also licensed and reputable across several industries.

So, using them would also guarantee you peace of mind.

Usability

One of the few ignored aspects of an exchange is the usability of its platform. The website must have a simple and very responsive design.

Many platforms are fond of overcomplicating the looks, all in the name of standing out or looking modern. These overly ambiguous platforms give players a hard time to use. 

The major reason why we prioritize the usability of exchanges is that trading involves real money, which makes it sensitive.

Not understanding the dynamics of the website can make you sustain unnecessary losses. 

Another interesting innovation are exchanges that have mobile apps. Those with mobile applications make it easier to access a mobile-optimized version of their website anytime and from everywhere.

Support

Your betting exchange needs to have very reasonable customer support. The world has gone past emails and phone numbers; everyone prefers live chat.

It is faster, more responsive, and more effective. Another important thing is the availability of their support.

We don’t believe anyone should settle for anything less than 24 hours of availability.

Betfair Exchange

Betfair is one of the pioneers of sports betting exchanges, and they have been around since 1999.

Betfair Australia operates with a Tasmanian Gaming License, making them legal in that region.

They offer a decent market with horse racing, football, tennis, and several others. And because of their long history, they have a solid fan base.

Due to their years of experience and track record, it is safe to say that Betfair is tested and trusted.

Why is Betfair the Only Option for Australians?

It is because of the strict Australian laws that strictly forbid betting exchanges. Betfair is the only licensed exchange in Australia; any other operation is illegal. This law was enforced back in 2007, banning all forms of exchanges. 

However, Betfair took an additional measure to make its presence legal in Australia. It took a while, but after a lot of tussle in the High Court of Australia, they got the validation to operate in the country.

It is still unclear why other exchanges did not follow suit. The best speculation is that they didn’t want to go through the stress of appealing to the High Court of Australia.

Is there a Betting Exchange in Australia?

Yes, there is only one legal betting exchange in Australia, which is Betfair.

How to Choose the Best Betting Exchange?

To choose the best betting exchange, you need to consider the services they render. Earlier, we stated eight important things to pay attention to; be sure to go through them.

What is the Best Betting Exchange in Australia?

Since there is only one exchange in Australia, there is no competition, so Betfair is the best.

Are Betting Exchanges Legal in Australia?

Betting exchanges are not fully legal in Australia. Only Betfair has the validation from the High Court of Australia to operate in the country.