Many of you reading this will already be very familiar with the idea of a traditional bookmaker. There are after all, many of these outlets in large towns and cities and a wealth of online bookmakers in the UK. You may even have spent a penny or two at an online sports betting site. For many years, these types of business have been the only way to place a bet. But recently, another option has been made available that cuts out the middle man. Bets aren’t placed directly against the bookmaker. Instead you bet others or you can play the part of a bookmaker yourself. It’s known as lay betting and it’s you that offers the betting odds.
What are betting exchanges and how do they work?
To explain the ins and outs of lay betting we’d really need to write a book. And betting exchanges explained in great detail would require several pages. But we’d like to give you an idea of how they both work so you can give it a try. A betting exchange is a place where bets are placed between individuals, without the involvement of a bookmaker. It’s also a place where lay betting occurs. Two individuals take part in the bet, one of which is called the ‘layer’. Imagine you want to back a horse, at 10:1 for a £10 bet. You place a ‘back bet’ and wait for the layer to take the bet. In other words, the layer takes the place of the traditional bookmaker.
A betting exchange allows people to lay a bet or back a selection, and basically play the part of a bookmaker. You don’t have to worry about getting a licence either. You’re able to trade on sporting events as well as just place simple bets and take advantage of arbitrage situations to lock in your profit. In essence, you could be earning a profit whether your selection wins or loses.
The advantages of a betting exchange and lay betting
It can be very advantageous to use a betting exchange rather than your local bookies or an online bookmaker in the UK. One of the biggest is that you can regularly find much better odds than at a normal bookie. This is because a bookmaker won’t be taking their cut. A small commission does have to be paid on any winnings but this is much less than the cut a bookmaker would take. Another advantage is that you can sell your bets to another punter, with the potential of making a profit before the race or the match, for example, has even started. Being able to offer lay betting odds is another big advantage.
Lay betting – how the odds work
In order to explain the odds you’ll need to imagine a scenario. You and a friend want to place bets on the flip of a coin or the roll of a dice. We’ll start with the coin toss. You decide you both want to bet a fiver. One of you backs heads and the other tails, with the winner receiving £10. The odds in this case are evens or 2. This is because you placed you bet for £5, in the hope of winning another £5.
The odds for the roll of a dice are a little more complex as there are more than two options. Imagine you’ll receive a payout from your friend every time the dice lands on 1. The odds aren’t 2 because you’ve got more chance of losing than winning. You have five chances of losing and only one of winning. This means that the true odds for this particular bet are 5:1.
Betting exchanged have changed the way punters can gamble and most certainly made it much more exciting. Online sports betting in this way has very low starting costs, which makes it worth a try. The opportunities can be very profitable.