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What are betting exchanges?

Betting exchanges avoid the marketplace by allowing one individual to bet against another individual.
Betting exchanges avoid the marketplace by allowing one individual to bet against another individual. Photo by David Becker

By placing bets on a selection of horses, you are essentially placing a wager against the horse racing marketplace which is comprised of all the punters on a particular meeting. The bookmakers’ analyses and the collection of bets affect the odds, which in turn affect your winnings and losses.

Betting exchanges avoid the marketplace by allowing one individual to bet against another individual. Person-to-person betting exchanges act as the middle man allowing customers to bet against each other. A punter can back a selection to win, lay it to lose or trade the odds, by backing and laying the same horse at different odds. A betting exchange also allows you to bet in-running during a race.

A betting exchange might be a favorable route versus going against the horse racing marketplace. The latter has a professionalized, comprehensive methodology to pricing odds and the likelihood of each racehorse winning. However, a good punter can find value – and profits – by going against less insightful bettors. Over the long-term, good punters always prevail over bad bettors.

The three major betting exchanges are Betfair, BETDAQ, and WBX. These market leaders have a turnover of bets, and they offer a good punter an opportunity to seek out profit opportunities.

The exchanges typically charge commission between 2% and 5% of your net winnings. However, better odds are the critical measure of whether or not a punter will be successful. Additionally, bettors using an exchange don't have to pay the bookie.