If you are familiar with the world of online sports betting, chances are you have heard of exchange betting. While online bookmakers have the majority share of the online betting market, most people don’t realise that there is an alternate way to bet online.
Exchange betting is a completely different way to bet and involves betting against each other. With this type of betting setup, bettors will actually bet against other bettors on specific sports matches. Here is how it works:
What is Exchange Betting?
With traditional online sports betting, a bettor will place a bet or (back) a certain outcome such as a sports match. If the bettor wins, the bookmaker will pay them out the according to the odds agreed upon at the start of the wager. With exchange betting, there is no bookmaker involved in the betting transaction.
All of the bets take place between the bettors themselves. The site that hosts the exchange betting transaction simply acts as a processing platform and a venue for the betting to take place. The site will take a small percentage of each bet paid out in return for the service.
Backing Bets and Lay Bets
There are two main types of bets that can be placed at an exchange betting website; these include backing bets and lay bets. Both types of bets are essentially fixed odds where both parties involved agree on the odds when the bet is made. The first type of bet is a backing bet. This is where a bettor will place a wager on a particular event taking place. For example, a bettor can place a backing bet saying that Serena Williams will win the Wimbledon tennis championship. On the other hand, a lay bet is a bet made against the original backing bet. In the above example the lay bet is saying that Serena will not win the Wimbledon Title.
Understanding Lay Betting
At exchange betting websites, each sporting event will have a backing bet and a lay bet. Bettors can either choose to back a certain outcome or to lay the bet. If we want to understand this better, we can take a look at a simple example.
Let’s say two friends want to place a wager on the outcome of a roll of a dice. The person backing the bet says that on his next throw he will roll a two. His friend then places a lay bet saying that he will in fact not roll a two. In this scenario, the guy rolling the dice has a 1 in six chance of rolling a two. Put in betting terms, the odds are 5:1. For the bet to be fair, if he does roll a two, the other guy will pay him out at 5:1 odds.
Choosing a Side
Lay betting is only found at exchange betting websites. With traditional sports betting, the online bookmaker essentially lays all bets. That is, if the event does occur, they will pay out the backer at the agreed odds. Exchange betting gives bettors the opportunity to play the role of the bookmaker and lay any bet on the site. This can include horseracing bets where a backer will place a wager on a specific horse to win.
A lay bet can be placed saying that any other horse in the field will win but not the horse chosen by the backer.