Betting platforms generally fall into two different categories, exchanges and bookmakers. Bookmakers have long been the traditional platform utilised by customers, where different company’s offer odds, and you bet against them. However, with exchanges, odds are determined by other users, where you bet against fellow customers within a marketplace style platform. While bookmakers are generally recommended to those new to the world of sports betting, and exchanges are utilised by serious and experienced punters, knowing the difference between the two is the only way to real make a decision for yourself.
An exchange provides customers with the ability to trade on the outcome of individual events, which are most commonly found in sports and politics. Bettors are allowed to bet against each other, rather than a bookmaker. As well as this, and instead of being restricted when it comes to odds, exchanges allow users to take on others by either backing or laying. When betting with a bookmaker, the only option is to back a winner, whereas with an exchange, you can set the odds for an event by backing the odds set by others on the platform, thus offering the chance to trade position. Exchanges are now used by those who enjoy researching and assessing markets before placing bets, offering opportunities to find greater value.
Odds at Bookmakers vs Exchanges
Customers betting through a bookmaker will quickly realise that they have no say over the odds in which they receive, with markets generally being priced in the favour of the organisation, rather than the punter. This is also the case with betting margins, which is why it is important to research different platforms before registering with a bookmaker.
Meanwhile, a betting exchange will more often than not offer more competitive odds, as a result of the market being driven by supply and demand. In short, customers are able to win more for the same bet if you choose an exchange over a bookmaker. Betting exchanges have certainly changed the industry, with more and more punters realising the potential value of them, compared to traditional bookmakers.
Commission vs Betting Margins
Betting exchanges charge fees in order to facilitate activity on their platforms, while bookmakers make money through unsuccessful bets being placed. Commission at exchanges often sits at around 2%, while those making a loss on a market will obviously not pay any fee. By not relying on margins, exchanges can offer much fairer odds, as opposed to what is usually found at bookmakers. Bookmakers are able to make money by inserting a margin into their odds.
Applying this to Betting
No matter what type of customer you are, betting exchanges are becoming more and more appealing as a result of the factors previously discussed. Exchanges offer users greater freedom, better odds and unrestricted markets, while bookmakers sometimes struggle to attract custom due to their need to make money.
Both exchanges and bookmakers have limitations in terms of placing bets. At exchanges, the amount of money that can be staked on a particular bet is determined by liquidity, while there is never any issue regarding winning bets and account closures. Bookmakers can often suffer at the hands of cancelled bets and stake restrictions, something which can often put potential customers off. Exchanges are simply acting as an intermediary for users, meaning that they do not have too much interest in this area.