Betfair was founded in 2000 by Andrew Black and Edward Wray and it was a genius idea. Betfair is the world’s largest betting exchange.
In 2016 Betfair merged with Paddy Power and formed Betfair Paddy Power. Betfair also has Sportsbook which is usual bookmaker with a big margin. You can compare prices yourself, which one is for you – Exchange or Sportsbook. I have no doubts in most cases Exchanges will kick average Sportsbook’s ass.
Betting exchange is not a usual bookmaker. It is a marketplace where customers can bet on or against. The exchange is only participating as a broker between you and other person and charging a small fee. Basically, you can offer your price and wait until someone will match it. Limits are very big on specific markets. And you will never be limited as Betfair is charging only small fee and don’t care if you win or lose. The more you bet/trade, more money Betfair will accumulate in fees, so they are not interested at all in limiting winning customers.
The biggest advantage of Exchange is nearly 0% margin on most events (especially top events).
When betting on Exchange you obviously need to remove fees before considering the bet and compare with market prices. Usually, Betfair is charging 5%, but you need to check your region – fees could be higher for some regions. The fee is only charged on winning the bet. If your bet is a loser – no fee will be charged.
For example, if you bet 100 at odds of 2.00 and win, you actual winnings will be 100-5%=95. In this case, your actual odds are 1.95. From your winnings, you need to deduct 5%. If you can get 1.97 on Pinnacle or Sbobet, it is not worth taking 2.0 on Betfair. But if the highest price for your bet on the market is 1.92/1.93 – take it on Betfair instead.
|Betfair odds||Commision, %||Actual odds|
Back and Lay
Back is obvious. You are betting like at usual bookmaker. You bet on the desired outcome choosing back option.
Lay – you are betting against this outcome. So if you think that Chelsea is not going to win tonight, you are laying them. Once you bet on Lay – basically you are taking a double chance on another team, but you are getting better odds (usually) because of very low margin.
Laying gives even more opportunities on Outright markets – you can lay one team. It means you will win, if they fail to win an outright market. You can’t do it on usual bookmakers. Once you are laying one team and their odds shorten after some time, you can back them and green up your bet. To green up – it means you will win no matter which team is going to win. That’s basically the main purpose of Exchanges – trading. Once you think the price is too high, you are backing it and expect the price to drop in the future, so you can lay shorter price and collect the profit. Of course, it is not so easy as is sounds. First of all, you need the experience to catch the good price. Also, you need liquidity on the market – if you will catch perfect odds, you still need someone to match your bet later. Think about it before placing a big bet on some unpopular markets. You need to think about your way out from the market too.
Small tip: if you are not happy with the price on offer – don’t take it. Instead, offer your price – move the odds by few cents and more (depends on the market). Your price could be matched up to the kickoff or even during inplay (you can choose).