What Is a Bet Exchange, and How Does It Work?

Alongside traditional sports bookmakers, there is an alternative for anyone looking to place a bet. A bet exchange works in a similar way in the sense that customers can stake on an event and claim a profit if their selection wins.

However, there is a key difference with betting exchange sites in terms of who provides the liquidity. In this guide, we will explain everything, so for those who have asked about a betting exchange how does it work, all the answers are here.

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The Complete Guide to Using a Betting Exchange UK

Betting exchange explained

We now need to know about making money on betting exchanges and, to understand that, we need to look at the mechanics behind the operation. All betting exchange sites follow the same formula, so we only need to get a grip with one method.

If we look at a traditional sportsbook, you are betting against the company. They have the liquidity so, if you want to bet on Liverpool to beat Arsenal, for example, the bet is with that individual sportsbook.

In contrast, at the best betting exchange sites, that wager is against another customer. In the above example, customers enter the markets and would decide that they want to bet on the Liverpool vs Arsenal game. The liquidity behind the match is therefore provided by those betting customers and not the betting exchange itself.

The odds will then start to fluctuate depending on how much money has been staked on the market and where that money has been placed - win, lose or draw. In time, the odds will settle, and they will be close to those that are found at a regular sportsbook. However, there are many occasions where the odds on the exchanges are higher.

Those who are seeking out high-value odds at a bet exchange generally look in the live markets. Without an experienced odds setter in charge of those markets, customers can sometimes react in haste and create some exceptionally long odds. Betting exchange liability is very fluid so do look in those live markets and you may find some serious value. This can especially be the case with new betting exchange sites.

This is one of the key benefits for those who prefer to bet on exchange rates, and it’s certainly worth comparing the odds with conventional sports betting sites.

As a final point to note, because customers are not betting against the house, betting exchanges in the UK and beyond make their money by taking commissions from winning bets. If we list all betting exchanges, we find that these commission rates will vary, but a figure of 2% is quite common. It is possible to find lower rates, and at times there are promotions that will reduce the percentages. It’s even been known for betting exchange commission to drop to a 0% rate for a limited time for new customers.

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How Do I Bet at a Betting Exchange

If you’ve ever staked at a conventional sportsbook, then you’ll have no issues with using a bet exchange. Even those who are completely new to the art of betting should have no issues with the practice. Naturally, all of the betting exchange UK sites will look a little different, but they will all follow a certain pattern.

When you sign up and log, having worked out how to use betting exchange, the markets should be laid out in a logical order, as they are with this example:

From this point, it’s a case of finding your preferred event and choosing your stake. The one twist with all bet exchange sites is the option to ‘lay’ a bet. Laying simply means that you are betting on something to lose - a horse, a football team, a tennis player etc.

This is another option to consider and another way in which customers may find better value at an exchange. The following screenshot shows those betting options, and it’s up to the bettor to decide whether to ‘back’ or ‘lay’.

Having made that choice, customers will need to click on the relevant market and a virtual bet slip will open up. Once again, this will look a little different, depending on which of the betting exchange UK sites you are using but they will all follow similar patterns.

The slip is likely to open at the top right corner of the screen. Head over, decide on the stake that you are comfortable with, enter the amount and click on a confirmation button. Like a conventional football betting sites, a bet exchange will also allow you to add selections to form straight line multiples or system bets such as Lucky 15s, Trixies, Super Heinz or a Goliath.

Can I Use a Formula at a Betting Exchange?

It is perfectly possible to use any of a number of formulas at a bet exchange. Strategies such as Martingale, Reverse Martingale, Fibonacci and Paroli could all potentially work here. Those systems are all explained in greater detail elsewhere on this site, but they all rely on certain situations to occur. Most importantly, it’s helpful with all of those formulas if the odds are rounded to Even Money or 2/1.

Many of the best sports betting exchange sites show decimal odds by default, so those odds convert to 2.0 and 3.0, respectively. It may be possible to reset and show as fractions depending on which bet exchange you are using.

Just make sure you are comfortable with the odds, but the answer to the question is ‘yes’, it’s perfectly possible to use one of many formulas at betting exchange sites.

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Please Show Examples of a Betting Formula in Action

For this example, we will keep things really simple and use the Martingale method. This is fully explained in greater detail elsewhere, but the system simply requires players to start by finding an Even Money bet. Identify a unit stake such as £10.00. If the opening bet is successful, we keep going with those £10.00 units but, if it were to fail, we need to double that stake until a successful bet drops in.

Betting Exchange Example

Here are two examples of the martingale system in action at a bet exchange:

Example One:

  • Bet £10.00 at Even Money: Bet Wins: Profit of £10.00 plus £10.00 stake = £20.00 Total Returns.
  • Bet £10.00 at Even Money: Bet Loses: Stake Forfeited.
  • Bet £20.00 at Even Money: Bet Wins: Profit of £20.00 plus £20.00 stake = £40.00 Total Returns.

In this example, our outlay is £40.00 with returns of £60.00 making a total overall profit of £20.00.

Example One:

  • Bet £10.00 at Even Money: Bet Loses: Stake Forfeited.
  • Bet £20.00 at Even Money: Bet Loses Stake Forfeited.
  • Bet £40.00 at Even Money: Bet Loses: Stake Forfeited.
  • Bet £80.00 at Even Money: Bet Wins: Profit of £80.00 plus £80.00 stake = £160.00 Total Returns.

In this example, we’ve had to wait for a while, but a win eventually came along. That leaves our calculations at a total outlay of £150 with returns of £160, so we have a total overall profit of £10.00.

In summary, while no formulas are ever completely foolproof, if you are following a system, then it can certainly be used at a bet exchange.

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