If you’re just getting started with matched betting, you will have seen that using a betting exchange, such as Betfair Exchange, is essential.
But how is a betting exchange different to a regular bookmaker? And how do you effectively use a betting exchange?
This in-depth guide will answer all of your questions and help get you started backing and laying.
Betfair Exchange Explained
Betfair Exchange is not the same as a traditional bookmaker.
Instead of the bookmaker setting the odds, users set the odds and bet against each other, with Betfair taking a percentage commission as their profit for providing the service.
Usually, Betfair Exchange is where you will be ‘laying’ your bets, and the bookmaker is where you will make your ‘backing’ bets. These terms will all become clear by the end of this guide.
How to use Betfair Exchange
So you know what Betfair Exchange is, but now you may find yourself asking ‘How do I use Betfair Exchange?’
The following guide will take you through step-by-step!
First, you must create your account. This allows you to deposit funds, make bets, and withdraw your winnings.
As with any betting service, you will need to provide evidence of your identity and age before you can use their site.
Once you have opened your account you can get started by depositing funds into your account.
You can choose to back or lay bets on Betfair Exchange. We will start by showing you how to make a standard ‘backing’-style wager using Betfair.
We will use this England v Australia cricket match as an example.
As you can see, there are three possible outcomes of the match which we can bet on; an England win, an Australia win, or a Draw.
In the example, we have chosen to back England to Win, at odds of 9.4. Our stake is £50.
At the time of placing the bet, there is a total of £30 available to stake at these odds.
If we choose odds of 9.0, there is a total of £155 available to stake.
You can choose any odds and whatever stake you like, but you cannot guarantee your bet will be matched. If your bet is not matched and the event ends, you are refunded your stake.
These odds and the available money to stake will change over time as more bets are placed. The more people betting on the event the more liquid (money) in the market and therefore more chance of your bet being matched.
Keep this in mind when assessing your options.
Once the event has finished, Betfair will verify the result before customers are paid out. This usually occurs very soon after the event ending. Any unmatched bets will be cancelled automatically.
To get used to using Betfair Exchange, it may be worthwhile to place a few small wagers as practice. It is important not to make any mistakes once we start placing larger bets!
This is the simplest way to use Betfair Exchange. You may find that placing traditional ‘back’ style bets gives you better odds and greater profit than using a regular bookmaker.
However, we will mostly be using Betfair Exchange to make our ‘lay’ bets. This is slightly more complicated but will be explained in the following example.
‘Laying’ bets on Betfair Exchange is the bread and butter of matched betting. This is where we guarantee that whatever the outcome of a given event, we will win.
Using the previous example where we backed England to win, our lay bet means we are betting on every other outcome than an England win; in this case either an Australia win or a draw.
This means we have every outcome covered.
As you can see, all of the odds have changed since we backed England to win. This is normal, as the odds and money available to stake will change as more bets are placed.
Understanding how a lay bet works is very important.
Essentially, when you place your lay bet, you are taking on the role of the bookmaker. In the above example, we are laying England to win (betting on everything except an England win).
Imagine you are the bookmaker, and a punter places a bet with you for £50 at odds of 10.0 for England to win. If Australia win or there is a draw, the punter will lose, and you keep their £50.
However, and this is the important part, if England do win, you must payout to the punter a total of £450 plus their £50 stake.
Of course, because we will have also backed England to win with another bookmaker, we will still come out ahead.
This is where a mistake can be very costly. If your bet with the bookmaker does not go through for some reason and you don’t realise before you place your lay bet, you can stand to lose a lot of money. This is why you must always be on your toes!
As with our previous bet, the available stake is shown beneath the odds.
For our example, there is a total of £74 available for us to lay against at odds of 10.0, but there is £904 available at odds of 10.5.
Again, you can place a wager at any odds and for any stake you choose, but there is no guarantee it will be matched.
Betfair Exchange’s Lay Commission
Betfair make money (and a lot of it!) through commission. Whenever a bet wins, Betfair takes a certain percentage.
This commission changes based on how much you use the service. This is Betfair’s way of rewarding frequent users and keeps punters regularly placing bets.
If no bets are made using your account for a certain period of time, your account will start to ‘decay’, meaning your decreased commission will start to increase back toward the base rate.
Betfair has a handy graphic on their website to explain how much commission you will pay on winnings.
In their example, if your net winnings are £400, and you have a discount rate of 40%, you will pay £12 commission to Betfair.
When you first start placing bets, you will pay the market base rate of 5%. Without the discount rate applied, this means you would pay £20 commission on a £400 net win. Over time, you can build up to a 60% discount rate.
Don’t worry! If you lose your bet on Betfair, you only lose your stake. However, you still gain points! This will help you build up your discount rate even if you lose.
While it’s good to know this, don’t let this confuse you. What’s important is that you learn the process of betting first. Worry about this when you start making more cash!
How to Lay Accumulators on Betfair
It is also possible to lay multiples (doubles, triples, and accumulators) using Betfair.
An accumulating bet is a bet on multiple events, where the total return from the first bet is automatically staked on the next bet, and so on for the total amount of bets.
If one loses, the whole bet is lost.
Why would we want to make a lay accumulator wager?
One of the common offers from bookmakers we will be taking advantage of is accumulator offers, and may give you free bets for placing an accumulator, or if one part of your accumulator loses, for example.
It is easy to place a regular accumulating bet using most online bookmakers. But how do you place a lay accumulator using Betfair?
There is an option to lay certain accumulators such as pre-made accumulators.
Simply use the search bar on Betfair Exchange and search ‘acca’ to see all accumulator offers.
Below we can see the odds available for laying Portugal, Scotland and Sweden in the same bet. There is £608 available to lay at odds of 6.8.
If you choose to lay Portugal, Scotland and Russia in an acca, the odds are 15.0, and there is £45 available to be matched at this price.
How to Trade on Betfair Exchange
Trading is another unique feature of Betfair which allows smart punters to make guaranteed profits! This is because the odds on Betfair will fluctuate as the market changes over time and more bets are placed.
There are many different types of Betfair trading, and a whole book could be written on the topic. For beginners, the best way to understand is as follows.
Let’s say you place a bet before an England v Australia cricket match to lay England.
Now, just before the match begins and the teams are announced, the odds will fluctuate based on which players are selected for the match.
For example, Australia may be heavily favoured due to a certain player being in great form. If this player is injured just before the match, the odds may swing in favour of England winning.
If the odds swing in your favour, you can now back England to win, and guarantee a profit because you have covered all of the outcomes of the match.
Trading on Betfair is basically the same as trading at a stock exchange; you want to buy low and sell high.
Being successful at trading means being able to predict which way the price will move. And remember, you can bet in-play for many events on Betfair, meaning the price will not only fluctuate before the event but also during the event.
As you can see in the above image, as a result of trading at the odds change throughout an event, we have been to successfully create a situation where we will profit from any result.
Hopefully, this article has cleared up any misconceptions you may have had about using Betfair Exchange. If you have any more questions, don’t hesitate to shoot us an email.