Betfair vs Smarkets
The world of betting has changed dramatically since the year of 2000 when a website called Betfair was launched. Betfair has its own sportsbook site and it has another part of their site called an exchange. The exchange is a betting exchange and this has totally revolutionised the way many of us bet on our favourite sports. A betting exchange enables you to place back bets and lay bets on selections. A back bet is to predict that team will win and a lay bet is to predict that team will not win. When you place lay bets, you are essentially taking the role of a bookmaker by opposing most mug punter’s views of backing the same selection.
A betting exchange makes their money by charging a small commission on the bets you win. Betfair is known to be the most expensive at charging 5% on winning bets. This means if you win £100 on Betfair, you will pay them £5.00 in commission which is also deducted automatically as soon as the event is settled. I think it is better to get as much value as you can from your betting and so I use Smarkets. Smarkets is another betting exchange that is much cheaper than Betfair to use. They only charge you 2% commission on winning bets meaning you would only pay £2.00 on a £100 bet if it wins. This saving of 3% really does add up over time and as bettors, we aim to seek the most amount of value we can possibly get our hands on.
So a normal sportsbook will only let you bet on teams or selections to win, a betting exchange will allow you to bet on both sides of the book. This is the key difference between the two platforms. Imagine you think “Manchester United will not win the game today” but instead of going into your local bookmakers and placing a bet on the opposing team and the draw separately, you can instead use a betting exchange and just lay Manchester United to win. Therefore if Manchester United win the game you would lose your liability. If Manchester United lose or draw the game, you would win your lay bet as Manchester United have failed to win.
Another excellent thing about betting exchanges is that the odds are generally inflated in comparison to most bookmakers. Let’s say you were a general punter and liked betting on your favourite side to win each week, you would get better odds on a betting exchange even after the commission is taking into consideration. The reason the odds on a betting exchange are higher is because the bookmakers would create an arbitrage opportunity for its users otherwise causing them to lose money if the odds on the exchange were lower. This means you can expect to get better returns on your money by betting on a betting exchange should your selection win. Using Smarkets is important as this enables you to only be paying 2% of your winnings to them which is the cheapest out there. Have a read of this Smarkets review for an in depth guide.