All About Sports Betting Exchanges

A betting exchange is a platform for bettors to trade on the outcome of certain events. It differs by allowing bettors to bet against each other rather than a bookmaker – so bettors can act as a bookmaker by setting odds for an event, or the customer by backing the odds set by other users on the exchange.

At Gambyl, we want you to win — you’re only charged fee based on your winning bets. If your bet doesn’t come through, you don’t pay a thing.

Unlike Sportsbooks, we’re not trying to beat our customers. 

Table of Contents

TLDR (Too Long Didn’t Read) Version

  1. The Bookmaker is disintermediated.
  2. Reduce commissions and fees.
  3. We want you to win because we only make any commission when you win.
  4. If you lose and hey, it happens, the people that bet against you aren’t charged any commission.

betting exchange is marketplace that allows bettors to bet against each other with much lower fees than those offered by traditional sportsbooks.

Players agree on the odds and stake for a given game, and bet against one another.

One player might offer a $50 bet on the Buccaneers -3 against the Cowboys, and another player on the exchange can accept my offer and bet Cowboys +3.

When this happens, it’s called a matched bet. It’s also why Gambyl is a peer-to-peer betting exchange, meaning you’re actually betting with or against other players.

Betting exchanges have low overhead because we don’t need oddsmaking teams, so we charge a small fee on each bet — much less than the Vig (or Vigorish) a sportsbook takes.

You won’t be betting NFL point spreads at -110 at an exchange; you can effectively get them closer to -101 or even money.

What is a Betting Exchange?

A betting exchange is a platform for bettors to trade on the outcome of certain events. It differs by allowing bettors to bet against each other rather than a bookmaker – so bettors can act as a bookmaker by setting odds for an event, or the customer by backing the odds set by other users on the exchange.

Betting on the Gambyl exchange gives you an exciting and fairer way to bet on sports, politics and other events. The fairness of the Gambyl exchange is that most markets are close to 100% – known as a fair book – whereas bookmakers have a builtin over-round, resulting in tighter prices and less value.

As an example an eight runner horse race will be very close to the previously mentioned 100% on the Gambyl exchange, but with a sportsbook, their inbuilt over-round will have the race somewhere around 112%. 

Playing “the old fashioned way” gives sportsbooks their profit margin and also gives bettors much less value.

A betting exchange is a platform for bettors to trade on the outcome of certain events. It differs by allowing bettors to bet against each other rather than a bookmaker – so bettors can act as a bookmaker by setting odds for an event, or the customer by backing the odds set by other users on the exchange.

The technology of a betting exchange like Gambyl allows players like yourself to instantly identify the odds they are looking for to place the bets they want. 

Importantly, the prices on a betting exchange are determined by the wisdom of the crowds, rather than being determined by a bookmaker.

The Advantages and Disadvantages of a Betting Exchange

When exchange betting was first introduced, many players and operators believed it would revolutionize sports betting and lead to the death of the sportsbook. While it’s had a major impact on the sports betting industry, and it’s proved to be very popular with bettors, it hasn’t yet replaced betting with bookmakers and online sportsbooks.

Exchange betting is also known as peer-to-peer betting, which is actually a more accurate description of what it is. It’s basically about betting against other individuals, rather than a bookmaker, which is why so many thought it would kill off traditional bookmaking.

On this page we’re explaining the basics of, and how to use betting exchanges. We even looked at the advantages and disadvantages of exchange betting when compared to traditional sports betting.

Even though our CEO doesn’t like this part, let’s dive into the advantages and disadvantages of a sports betting exchange.

Advantages of a Betting Exchange

A betting exchange is more flexible than a sportsbook because it allows you to bet against other people instead of against the house.

This means that you can set your own odds, which can be more favorable than the odds offered by a sportsbook. In addition, exchanges typically offer more markets than sportsbooks.

Reasonable odds

Betting exchange sites offer better odds as opposed to standard online betting sportsbooks.

This is more often the case with longshot bets, which generally carry better odds at exchanges. Such exchanges look at longshot bets as easy money and offer fair odds to attract more gamblers. In comparison, standard sportsbooks provide unfair odds in order to reduce the risk of losing money. Hence, it is better to place odds at betting exchanges as they offer good deals. However, one must keep in mind that a minimum commission needs to be paid in case one wins a bet.

Laying bets

This can’t be done on standard bookmakers, which provide a more traditional sort of betting experience But with lay bets you can make money not only by winning bets but also by losing ones – which means if Real Madrid win or lose against Liverpool then one could make money off their opponent too.

Guaranteed profit

In case of betting exchange sites, one can book profits before an event has even started. For example, one bets on Manchester United to beat Liverpool at 2.5. However, before the start of the match, if you find out that the top three players are ruled out of the game, the odds could rise significantly and you can lay off the bet at 5.

No punishment for success

Bookmakers banning successful bettors is a fairly common practice in sports betting. Betting on multiple or all possible outcomes frequently leads to bettors being banned. Being sharp or good at placing your money on the right bet is another reason why bettors get banned, effectively making them a victim of their own success. However, betting exchanges don’t restrict bets or place bans on you for being successful, making them the go-to platform for skilled and professional bettors who are immersed into the sports betting industry.

Disadvantages of a Betting Exchange

There aren’t many drawbacks to playing on a sports betting exchange, from transparent, low fees on winning bets only to blockchain and smart contract tracked bets, the pros out weigh the cons.

The lines on a betting exchange depend on the number of players backing or laying a bet. This mean you’ll need players to bet against so the market has liquidity.

The liquidity is the amount of money available for you to bet (back/lay) at the corresponding odds on the corresponding selection. The liquidity that you see available at each odds increment can be a combination of one or more different users’ unmatched bets. You can bet all or part of that amount.

If there isn’t enough liquidity, your bets won’t be matched.

It’s unlikely this will happen often if you’re betting on popular sports leagues like NBA, NFL or Liga MX, but it could happen with less mainstream ones like motorsports or eSports.

The Differences Between a Sportsbook and a Betting Exchange

Even though there are some similarities between betting exchanges and sportsbooks, the two are not the same.

The main difference is that traditional online sportsbooks make profits by offering less efficient odds. Even if you covered all the outcomes of an event in a sportsbook, you would never make money. 

The odds and the fees (or the Vig) are always set in a way that the house will always (eventually) win.

Betting exchanges are quickly rising in popularity, with many players preferring them to traditional online sportsbooks.

But there are differences between betting exchanges and sportsbooks that you need to understand in order to avoid confusion and ensure you make the right choice where to play.

Commission vs. Betting Margin a.k.a The Vig

When you bet with a sportsbook, you are essentially betting against the bookmaker. The bookmaker sets the odds and if you win, they pay out your winnings. 

With a betting exchange, you are betting against other players. This means that the odds are set by the market and are usually better than those offered by a bookmaker.

There are two important mechanics to understand in a sports betting exchange: backing and laying…

Backing and Laying

Backing an outcome requires you to place money on one side of a bet. In backing, you are staking money that an outcome will happen.

If it does, you will win more than your initial stake. If it doesn’t, you lose your stake.

Laying a bet is to back something not to happen.

For example, to lay Monterrey to win their match against Club America is to back them NOT to win.

If you were to lay them, you would win your bet if Monterrey either lost or drew their match.

We know you’re asking yourself “how is laying a bet different than backing the other team”?

If you’re laying a bet, it means that you’re betting that any other outcome will happen.

If you’re placing a back bet, it’s as if you were betting that the outcome in question is going to happen, the same way you would do in a regular sportsbook.