Exchange betting is an innovative form of gambling that enables you to bet against other punters on a platform. Instead of wagering against a traditional bookmaker, you compete with each other and set your own odds.
Understanding Back and Lay Betting
In a betting exchange, there are two types of bettors: the ‘back’ bettor and the ‘lay’ bettor. Back betting is similar to gambling on a regular betting site, as you must bet on a specific outcome to occur, but you can set the odds. The platform will then find a lay bettor willing to bet against what you have set.
On the other hand, a ‘lay’ bettor does the opposite of the back bettor, betting that whatever the back bettor has wagered on will not happen. Lay bettors can also create their odds. While you decide your stake, the betting exchange determines your liability – the amount you need to pay out if your wager loses.
Comparing Betting Exchanges and Standard Bookmakers
Betting exchanges are quite different from standard bookmakers. Bookmakers make money by setting odds so players back both sides of an event. They provide balanced odds to ensure bettors back both sides of an event. Bettors bet against the bookmaker, and bookmakers often provide bonuses like free bets and boosted odds to keep wagering exciting. Most bookmakers offer a cash-out option, letting you close bets early to take a smaller profit or cut a loss.
On the other hand, when you win on a betting exchange, the site will take a commission of your profits. Commission tends to range from 2-8%. With a betting exchange, you set the odds, so you can find a larger opportunity for profit than taking odds from bookmakers. Bettors bet against one another, one specifically choosing an outcome and someone going against that. Promotions are rare because a betting exchange is an intermediary. Because betting exchanges act as an intermediary, there are no cash-outs for users, and punters must keep their bet to the very end.
Pros and Cons of Exchange Betting
While the unique nature of exchange betting offers many advantages, you should also keep in mind there are some drawbacks. Finding a match for your bet can be challenging on a betting exchange, especially if you’re betting on a niche sport. Betting exchanges don’t often provide bonuses for loyal players.
Legal Status of Exchange Betting in the US
Exchange betting is legal in the US, but none have gone live yet due to the complications from the Federal Wire Act of 1961. Considering how new the concept of betting is in the US, introducing exchange betting to just one state was seen as challenging. However, two betting exchanges are planning to launch in New Jersey in 2022, Prophet Exchange and SportTrade.
In conclusion, exchange betting offers a unique and potentially profitable alternative to traditional bookmaker betting. By understanding the differences between back and lay betting, and considering the pros and cons, you can make informed decisions about whether this form of gambling is right for you. With the anticipated launch of betting exchanges in the US, this innovative form of betting may soon become more accessible to a wider audience.
