The innovation of the Betting Exchange back in 2000 changed the whole betting landscape forever. A Betting Exchange is peer-to-peer betting, that basically means me against you. Essentially, where a Betting Exchange differs from a conventional bookmaker is that as well as being able to back a football team to win, on a Betting Exchange we can also lay a football team to lose (you can do this on almost any sport, it could be a horse, golfer, cricket team, etc, you choose to lay.
At the moment there are two major Betting Exchanges in the market place, Betfair and Betdaq. There are other smaller rivals out there such as Smarkets, but they have a long way to go to compete with the might of organisations such as Betfair, and the Ladbrokes backed, Betdaq.
Betting Exchange liquidity is strongest on Betfair. For those not familiar with liquidity, it is the amount of money available in the market to bet with, or against. If there is no, or little liquidity, then it is hard to impossible to get a bet matched. In essence, a Betting Exchange without liquidity is pretty much a waste of time, as you can’t bet or trade on it.
As well as being able to lay a team or individual in a sporting event, other benefits of Betting Exchanges are the chance to trade out of a football match in play (you can cash out with most bookmakers these days as well), and being able to trade price movements before a match kicks off.
History Of Betting Exchanges
Despite changing the betting landscape, Betting Exchanges are becoming endangered species with Betfair dominating the market place and seemingly eating up the opposition in the process.
When Betfair emerged back in 2000, I believe it changed gambling for the better, and in my opinion this has also led to the kind of gimmicks we see more and more of today, such as the cash out, and enhanced price promotions. For years bookies just took our custom for granted, they just offered us garbage odds, and expected us to queue up to give them our money. And like sheep, we did.
Once the betting exchanges came along, it opened the door to us and totally changed our betting options. Instead of just having to take what the bookmakers offered us, all of a sudden we could decide to lay horses or football teams, etc, ourselves. Our betting options changed overnight, and meant the bookies had to offer us more, otherwise everyone would have just left en mass and went to the Betfair. Personally, that’s what I did.
The innovation of the Betting Exchange also offered meant no bookmaker’s over round, and also the chance to trade football, even before a ball is kicked. On the flip side to having no over round, there is the Betting Exchanges commission instead.
These days Betfair are the dominant market force, and are currently eating up the opposition. The World Bet Exchange has fallen by the wayside, with the main rivals to Betfair these days being Smarkets and Betdaq.
Back in the summer of 2012, Betfair launched it’s own Sportsbook to operate alongside its peer-to-peer Betting Exchange, meaning punters didn’t have to go back to a conventional bookie to place an Ante Post horse racing bet (for example), or a fixed odds football accumulator bet.
This prompted Ladbrokes to move, and in January 2013 they purchased the Betdaq Betting Exchange. This gives Betdaq solid backing in their attempts to fight Betfair for a market share, and it also gives Ladbrokes a firm footing in both the Sportsbook (conventional Bookmaking) and Betting Exchange market places.
In response to the challenge from Ladbrokes/Betdaq, Betfair purchased the loss making bookmaker Blue Square in April 2013, giving the complete database of bookmakers Sportbook customers.
The battle goes on for the market share of Betting Exchange customers, with Betfair in the ascendancy, but set for a long battle with Betdaq for market supremacy.