Once upon a time there was a professional gambler who came up with a revolutionary new idea that would radically change the world of sports betting. He has discussed his idea with a fellow professional, and the two have decided to join forces and transform the idea into a product. The result was Betfair, the first ever betting exchange of the world – and it was a huge success, transforming their startup into one of the most successful companies in this business.
Let’s see what a betting exchange is and how it works.
A traditional bookmaker will allow punters to place a bet on a specific outcome of an event at odds specified by themselves. Say, in case of a football game, you can bet on Team A winning, Team B winning or a draw. Also, a traditional bookmaker builds its commission into the prices (odds) offered, making money twice – when you lose, and also when you win.
In case of a betting exchange, things are a little different. First of all, there are only two bet types a punter can place: on something (a back bet) and against something (a lay bet). To stick with the above example: at a betting exchange you can bet on Team A winning the match, and also on Team A not winning (and the same goes for both other possible outcomes). Another difference between the exchange and a traditional bookmaker is that exchange bets are not placed against the bookmaker, but against fellow punters that bet on the same event.
For example, if you bet £10 on Team A winning, and a mate bets £10 on Team A not winning, the two bets are matched, so you bet against your mate. The exchange only acts as an intermediary. If you think this game can be very confusing at first, it is advisable to try some online games such as Judi Online so you can have a little practice. This will also give you an overview and background on how other games work.
Betting exchanged offer their users better odds (prices) than traditional bookmakers, as they don’t build their margin into them, instead retaining a small commission (in case of Betfrair this is 2 to 5 per cent) of the amount paid out to winning punters. They also offer higher limits to punters, and bigger flexibility, as well as the possibility to place a bet on both possible options in the same market, making sure they stay profitable even if one of their bets are lost.
The idea of the betting exchange was proposed by Andrew ‘Bert’ Black in the late 1990s. He and Edward Wray have decided to build a business out of it in 1999, and as a result they launched the Betfair betting exchange in 2000. Betfair’s first market was the 2000 Epsom Oaks, a British horse race with a century-long tradition. Although the odds were low, the industry media picked up the news, speaking about a sports betting revolution. From there on, the growth of Betfair exchange was uninterrupted.
Nowadays it handles over 5 million transactions each day. The two entrepreneurs have introduced the “in-play” football market in 2001, they added a series of other services – casino games, poker, bingo and other games in the years that followed, introduced a new concept of online gaming – exchange games – and launched their fixed odds sportsbook (to increase their reach on the recreational sports betting market) in 2013.
The betting exchange was and remains Betfair’s core product, although some say that since the introduction of its “traditional” online sportsbook the company has kind of lost its focus. By eliminating the financial risk attached to traditional sports bets, Betfair‘s exchange can offer better odds as any traditional bookmaker, making it an attractive destination for many punters from all over the world.
In this period – I write this review during the 2014 FIFA World Cup – football is the market Betfair focuses on the most, offering its punters the best odds on the market (for example, the odds of Germany winning its match against Portugal are 1.99 at Betfair’s exchange, while the average odds of the same outcome at traditional bookmakers is 1.91).
Betfair punters can place their bets on a great variety of markets on every game – over/under, correct score, half time / full time, penalties and more. Actually, the betting options are comparable to those offered by traditional bookmakers, but exchange punters can bet both on and against each outcome.
Besides football, punters can place their back and lay bets on a series of other events – sports and otherwise – at the Betfair exchange, the most popular of them being horse racing, but also on a series of sports from American football to volleyball, politics, entertainment and finances. Betfair’s exchange covers everything a traditional bookmaker would.
Surely its most popular product is in-play betting, where punters can adjust their bets according to the events of the game. This, too, covers a great variety of events – football, tennis, cricket and more – and also offers its visitors the chance to either follow the game itself through live streaming, or to find out which TV channel to switch to for following the events live.
The most popular selections for Betfair’s live in-play punters are football, horse racing, cricket and tennis, plus a special category reserved for the matches of the 2014 World Cup.
Betfair has launched its fixed odds online sportsbook late, at the end of 2013. Some of its users consider this a bad decision, drawing punters away from the exchange – Betfair’s revolutionary and most popular product. The Betfair sportsbook covers less markets than the exchange – a total of 22 main categories, including specials – and has far worse odds than the exchange (to stick with the above example: Betfair offers odds of 1.95 on Germany winning its match against Portugal, while the odds at the exchange are 1.99).
The sportsbook also offers live betting to its customers (again, the odds are worse than at the exchange) and TV listing and live streaming respectively for the upcoming games.
One of the most notable services offered by Betfair is a combination between casino games and exchange betting: exchange games. These games are like sitting behind a player at a table in Las Vegas, and betting on the game he plays. This service is truly unique.
Besides these, Betfair has a full range of online gaming options, from its online casino – powered by Playtech – to its Arcade (with games by a series of developers, with special bonuses and offers), its Vegas Slots (with a series of great slot machines that provide hours and hours of play to the fans of this game) and bingo hall. Besides it features a poker room on the iPoker network – also a product of Playtech – with exclusive giveaways, great tournaments and the promise of a big bonus.
Betfair‘s betting exchange is surely one of the most notable sports betting operations available online (the biggest sports betting exchange), offering great odds, good specials and a series of other recreational betting services. Unfortunately its casino and poker rooms are nothing special – especially compared to some of its competitors on the market. The exchange is what makes Betfair unique, and if its management continues to consider it the most important part of its business, it will remain one of the best places to bet on sporting events.