An exchange is a platform where players gather to place bets against each other instead of against a bookmaker. You may look at it in the same way as the stock market, where you buy and sell shares at an agreed price. Instead, at a betting exchange you place bets at an agreed odds. And just like in the stock market where each transaction has two sides – one seller and one buyer – each placed bet on the betting exchange also has two sides – one that bets on something to happen and one that bets the same thing will NOT happen.At a regular betting site, the bookmaker sets the odds. It is also the bookmaker that receives the stakes that are placed and pays the winnings to the winners. On the betting exchange however, there are other players who receive stakes and agree to pay any winnings.Betfair exchange only provides the platform and manages payouts between players. For this, Betfair charges a commission of 5% from the winner of the bet.For every bet that is placed or that is accepted between two parties, one bet for something to happen while the other bet against it and bet that the same thing will NOT happen. Usually, the bookmaker bet against you when you place a bet. You could say that the bookmaker automatically bet against what you bet on. And they win your money if what you bet on does NOT happen.When you bet that something should happen, just like at any regular bookmaker, it is called on Betfair exchange to ‘back’. When you instead take on the role of the bookmaker and bet for something NOT to happen, it is called on the Betfair exchange to ‘lay’.
To Back at the Exchange
To ‘back’ at Betfair means that you are betting on something to happen, just like when you place a regular bet with any other bookmaker. To back an option on Betfair, click one of the blue boxes as shown below. For example, if you back AIK in the game against Malmö, you win your bet if AIK wins and loses if AIK does NOT win. If you place a back bet of 100 kr at AIK and the odds are 5.3 you either get back 530 kr, of which 100 kr is your stake and 430 kr is your profit. Or you lose your bet of 100 kr, just like a regular bet at any other bookmaker. Your possible profit or loss is shown in the figures that the arrows in the picture below point towards.
To Lay at the Exchange
To ‘lay’ on Betfair exchange means that you receive someone else’s bet. Just as a bookmaker usually does. You will then win your bet if the alternative you layed does NOT happen. To lay an option on Betfair, click one of the pink boxes. If you lay AIK, as shown in the picture below, in the game against Malmö you win your bet if AIK does not win, ie if the game ends in a draw or if Malmö wins. If AIK wins you lose your bet. If you place a lay bet at AIK of 100 kr and the odds are 5.4 then you either win 100 kr or lose 440 kr, just like a regular bookmaker would have done if they received a bet of 100 kr. Your possible profit or loss is shown in the figures that the arrows in the picture below point towards.When you lay, you win your bet if any of the other alternatives occur. For example,If you place a lay bet on Messi to score the first goal in Barcelona’s game against Real Madrid, you win if any of the other players score the first goal or if the match ends 0-0. If Messi scores the first goal, you lose your bet.
If you place a lay bet for 100 kr you will receive a stake of 100 kr. This means that, regardless of the odds, you win 100 kr if you win your bet. If you win a lay bet, you always win the sum you have chosen to place/receive.On the other hand, if you lose a lay bet, the odds control how much you lose. When you lay, you receive someone else’s stake and agree to pay out that person’s profit if you lose. The amount you risk losing is, on the Betfair Exchange, called for liability. The higher the odds you lay, the higher your liability is (the amount you risk losing). So just like when a bookmaker receives the bets of others, they risk having to pay out more money if the odds are higher. For you to be able to place a bet you need to have enough funds in your account so you can cover the liability for that particular bet. The image below shows where you see your liability.If you place a lay bet of 100 kr on 3.0 times the stake, you either win 100 kr or lose 200 kr. If you place a lay bet for 500 kr on 5,0 times the stake, you either win 500 kr or lose 2.000 kr. If you place a lay bet for 1.000 kr on 1.5 times the stake, you either win 1.000 kr or lose 500 kr.
Liquidity is displayed for every available bet. The liquidity shows how much money is available at that particular odds.If the liquidity of the back odds 3.7 is 407 kr, this means that you can place a back bet for up to 407 kr to 3.7 times the stake. If your bet exceeds the available amount, you can place the remaining amount at the second best bet available, which in this case is 3.65.If the liquidity of the lay odds 3.75 is 904 kr, it means that you can place a lay bet at 3.75 times the stake for up to 904 kr. If your bet exceeds the available amount, you can place the remaining amount at the second best bet available, which in this case is 3.8.
Set your own odds
Betfair exchange offers the unique feature of setting your own odds. All bets that are playable on the exchange have been placed by other Betfair players. Previously, we have described how to place back bets and lay bets on odds already placed by other players that are waiting to be matched. For example, if there is a back bet available to the odds 4.0, this means that someone else has placed a lay bet to 4.0. The odds are then available to those who want to back the same odds. When someone then decides to back the odds of 4.0, the bet is matched.If you want to set your own odds, just click on an available odds and then adjust it in your betting slip with the arrows as shown below.But keep in mind that the bet will not be placed until it has been matched by another player. For example, if you click on the lay odds 5.4, lower the odds to 5.2 and place 100 kr, the bet will be matched when someone matches your odds and place a back bet for at least 100 kr to 5.2 times the stake. Remember that when you back bet, you want as high odds as possible and when you lay you want as low odds as possible.
Use the exchange for Matched Betting
The exchange is the most important tool for successful matched betting. Any bet you place with a regular bookmaker works just as a back bet on the betfair exchange. Either you lose your stake or you win the stake times the odds minus your stake. A lay bet, on the other hand, works on the contrary. You either win your stake or lose your stake times the odds minus your stake.Let’s say that you at a regular bookmaker put in 1.000 kr and get 1.000 kr as a bonus. You have so far “earned” 1.000 kr. However, the bonus has wagering requirements. If the wagering requirement is 8 times the bonus amount, you must place bets for 8.000 kr before you can withdraw your money from the bookmaker. Usually you risk losing your bonus money and your deposited money. However, with the help of lay bets on the exchange you can “secure” your bets and make a profit regardless of the outcome of the game. Imagine that, at the bookmaker where you received a bonus, place a bet for 2.000 kr on QPR winning against Brentford to 3.15 times the stake. And at the same time, on the exchange, placing a lay bet on QPR at 3.15 times the stake, as shown in the picture below.If QPR does not win you lose 2.000 kr at the bookmaker and win 2.000 kr on Betfair minus 100 kr in commission. You have then made a total profit of 900 kr since you at Betfair can withdraw your profit without any wagering requirements. If QPR instead wins, you win 4.300 kr at the bookmaker and lose 4.300 kr at Betfair. You have then managed to wager 2.000 kr at the bookmaker without losing any of your bonus. Then continue placing bets in the same way until you either meet the wagering requirement or until all your money has been transferred to Betfair.
Other Functions at Betfair
Betfair offers a whole lot besides the Exchange. Here we will present some of them.
Like many other bookmakers, Betfair exchange offers Cash Out. The Cash Out button appears when you are in the market where you placed a bet. If the liquidity is low, you may not be able to cash out your entire bet.Next to the Cash Out button there is also a gray button where you can click if you only want to cash out part of your bet and keep part of your bet.Cash out is based on what odds are currently available to place lay bets and back bets. If you placed a lay bet and want to cash out, a back bet is automatically placed for you, which is based on the best available back odds available at that time.
Live betting is another feature that you will of course also find at Betfair, in their live betting section you will be able to bet on games that are currently being played. You can also place both lay bets and back bets while different games are in progress. This has become an increasingly common feature of bookmakers and Betfair has not been late in hooking on that trend. Live betting has the advantage that you are able to place bets with the information you have if you follow the game or if you have a gut feeling that you trust. Given that we can now also take part in live games in a different way than before all around the globe, it is easy to understand why live betting has become so popular.