If you have been in the world of online sports betting for quite some time now, chances are you have heard of - or maybe even dabbled on - a betting exchange. Simply put, a betting exchange is a marketplace for bettors to wager against each other. It works the same as a typical sports betting setup, only that the element of the bookie is eliminated and replaced by fellow bettors.
So how do you make money from betting exchanges? Here are the things you should know.
Ways to Make Money from Betting Exchanges
Betting exchanges work the same as a typical online sportsbook, only that the ones offering the odds are also punters, as those betting on it.
But did you know that there are ways to leverage this difference to your advantage to the point that profit is almost always guaranteed in every play? You are also not limited to just a few sports markets since betting exchanges cover a wide range of competitions such as eSports, NHL, F1 races, and more. Here are some ways to pull off a profitable playing at a betting exchange.
Matched Betting
Matched betting is a practically risk-free way of wagering on sports. When done right, matched betting can promise you at least 95% profit for each play you do (this is because there is usually around 5% vig or the fee collected by platforms).
Simply put, matched betting refers to betting on both outcomes of a game, using both your real money as well as taking full advantage of bonuses you can get. You pull this off by having accounts on a betting exchange such as Betfair, and one account with a sportsbook, such as William Hill.
Usually, sportsbooks offer bonuses all the time - from the initial sign-up to the first deposit, to random bonuses just to keep someone playing on their platform. This is vital for matched betting.
Now, there are two types of exchange bets that you will place for every game: a lay bet, and a back bet. A lay bet refers to wagering that a certain outcome would not come true. When you say, "I think Team Liquid would NOT win a CS:GO match," that is an example of a lay bet. A back bet, on the other hand, is wagering that a certain outcome would come true. When you say, "I think Team A WILL win," that is a back bet.
You start with a qualifying bet by making a back bet with your bookie and a lay bet on the exchange. You can find online odds matcher tools to give you the best combination of back and lay odds you can put together for the least margin of loss possible. This is called "acceptable loss." You get free credits from your bookie account, and then you simply rinse and repeat the process.
Arbitrage Betting
Arbitrage betting, also called arbing, is another one of the most common ways to profit from the use of betting exchanges. Simply put, arbing is the strategy of betting on ALL possible outcomes of a game. This would be done through different bookies and exchanges, but with varied odds that will be the key to opening the potential for profit for this.
Like matched betting, there are also several matching software that can help you find the best combination of odds for each bet you can make. To better illustrate how this works, here is an example of how you do arbitrage betting for baseball.
- New York Yankees -165 at William Hill
- Los Angeles Dodgers +180 at Betfair
- Say that you bet on Yankees through William Hill for $100
- Using an odds calculator, you see you need to bet $57.36 for the dodgers through Betfair
- With this, you are guaranteed a $3.24 profit no matter the result
There are several drawbacks to doing arbitrage betting, though. One of them is the risk of having your bookmaker account limited or outright banned. Sportsbooks hate arbers since they do not make the sportsbooks any money in the long run. Another drawback is that while profits are often guaranteed (provided you do it the right way), it is not a formula for making huge amounts of money overnight.
Arbitrage betting is mostly a slow-burn type of strategy, which is perfect for those who are okay working on getting rich through long-term betting strategies.
Value Betting
One of the most common things you would hear in any gambling community - be that of sports or casinos - is that "the house always wins." In a way, that is true - only less than 10% of gamblers make it big through betting, and those who do make it big and essential "beat" the house often find themselves getting their accounts limited or closed by the bookie or online casino. At the end of the day, it appears that the house does always win. This is where value betting comes in.
Value betting refers to a strategy in wagering wherein you find the best odds that put you at an advantage over a bookie. Another way to put is that a value bet is picking something that has a higher likelihood of happening than what the bookies say. When you do a value bet, you essentially look for a pick wherein the ratio of risk to the potential reward is in your favor.
Value betting relies on knowing how to calculate the real probability of a game such as track & field races during the Olympics. Remember that bookies often adjust the odds to leave a margin for profit on their end and that is completely okay. After all, bookmaking is still a business at the end of the day.
Take for example a game where the two eSports Dota 2 teams stand at a perfect 50-50 odds against each other. That would be an odds of 2.00 in decimals. However, your bookies might offer you odds of 1.75, 1.80, 1.90, or any other value. However, one may offer 2.10. That last one brings in the better value so naturally, that makes it a better pick.
Take note that these types of bets are not the same as betting systems. Progressive betting systems involve changing your bet amount based on whether you won or lose your previous wager. Matched betting, arbitrage betting, and value betting are all about making wagers with a massive edge against the house.
Understanding Betting Exchanges
What makes wagering through a betting exchange better? There are several reasons, but one of the top reasons is that you can get the best value bets here. In betting exchanges, the odds are set by the punters themselves. This means that it can be as bad as it can get, or as good as you might want it to be.
To better understand, imagine a match between you and a friend for a Super League game between Arsenal and Liverpool. You come to a different idea of the outcome and you wager against each other with odds you set so yourselves. This is how betting exchanges work. The platform does not act the same way as a bookie. They only stand as the channel for making these exchanges in bets (for a minimal fee, of course).
FAQ
What are betting exchanges?
Betting exchanges are platforms where punters exchange picks and bets amongst each other, thereby eliminating the need and function of a bookmaker.
How can I make money from betting exchanges?
Betting exchanges offer a wide range of wagers to making money, including but not limited to matched bets, arbitrage bets, and value bets.
How does matched betting work among betting exchanges?
Done right, matched betting is a virtually guaranteed way of making a profit with every bet.
Is arbitrage betting allowed among betting sites?
Although there is no clear and definitive rule from bookies that do not allow arbitrage betting, most sportsbooks ban or close an account once their systems flag it for potential arber activity.
Are sportsbook sites the same as betting exchanges?
A sportsbook is managed by a company and is profit-oriented, which influences how they present odds. Betting exchanges, on the other hand, are not restricted or run by anyone. The platforms only take minimal fees for a transaction but aside from that, punters practically run the marketplace.
Can you use Bitcoin or other cryptocurrencies on betting exchanges?
Certain platforms can support Bitcoin and other altcoin payments such as Litecoin, Ethereum, Dogecoin, and Ripple.
Betting exchanges offer a way of wagering for sports that do not involve a bookmaker. Once you master how the system works, it would then be easy to use it to your advantage and make a profit out of it.
This article was published on July 14, 2022, and last updated on October 26, 2022.