Unlocking Fairer Odds: Exploring the World of Exchange Betting

Mateo Brekalo
Mateo Brekalo
Published: 6. listopada 2023.

Many of us are familiar with betting through platforms like Bet365, Pinnacle, DraftKings, and similar sites. These platforms operate as betting sites where the bettor places bets against the bookmakers' prices (odds). The bookmaker, estimating the probability for each outcome, may not always be accurate, so the bookie needs to consider the risks involved. Therefore, the bookie typically adds a margin to the estimated probabilities.

In our previous articles, we discussed how a 50% probability of an outcome winning corresponds to even 2.00 odds. However, in the case of a tennis match where the estimation is 50% for both players to win, you will not find odds of 2.00 for each player. Instead, you might encounter something like 1.9-1.9. This indicates that a percentage has been added to the odds from the bookmaker. Those are called the bookmakers odds rather than the fair odds.

On the other hand there are Exchange Betting sites such as Betfair, Smarkets, Matchbook where you can find higher prices and closer to the margin of 100%. How come that they don’t add additional margin is something we will explain now.

How does an exchange work?

Betting exchanges serve as platforms where bettors can trade on the outcomes of sports events. These platforms enable bettors to trade odds with each other, in contrast to traditional betting sites where bets are placed against the house (bookmaker). Each outcome on these exchanges has two sides: backers, who believe the event will occur, and layers, who believe it will not. Backers and layers have their bets matched when they agree on the price (odds).

The technology employed by these exchanges swiftly identifies and matches the "opinions" of both sides, facilitating the matching of bets. If there is no opposing party willing to accept the offered price, the bet remains unmatched, and the stake is returned. By allowing bettors to wager against each other, the need for a bookmaker's share, often referred to as a margin, is eliminated. Consequently, participants receive a fairer price, with the only commission being applied to winning bets.

Placing a back bet

If you want to back a bet, it is similar to a traditional betting for you when backing an outcome.

Let’s check the next screenshot:

Example 1

So, you've made the decision to place a bet on Newcastle against PSG. In this scenario, you find the offered price of 2.38 by the layers satisfactory. As long as the price is displayed in the blue box, you will typically be able to place your bet at the shown odds. However, keep in mind that the fast-paced fluctuations in prices might lead to your bet remaining unmatched, especially if the odds change. Additionally, there's a possibility that your bet could be partially accepted, with the remaining stake being returned to you.

If you are not satisfied with the offered price, you can always click on the box and enter you desired price. In this case we look for a price of 2.7 and place a bet. You would need someone to accept your price, but to be completely honest, your bet is most likely to be unmatched and the stake returned.

Example 2

Laying a bet

As mentioned earlier, there are always two sides to consider regarding the outcome: those who bet on something to happen (backers) and the layers (or the bookmaker) who bet against it.

When you lay a bet, you essentially play the role of a bookmaker. The pink boxes represent the odds you need to lay, and based on these odds, your liability is calculated.

For instance, if you're laying a bet on Newcastle at the price of 2.42 and you decide to enter a stake of 10€, this means that 10€ is your potential profit (minus the commission) if Newcastle doesn't win. However, your liability would be 14.20€, as you would need to pay out 24.20€, including the backers' stake.

Example 3

If someone placed a 10€ bet and backed Newcastle, you, as the one who accepted the 10€ profit potential in the event of a loss, essentially assumed the role of the bookmaker. In the event of Newcastle winning, you would be required to pay out the winnings, similar to the responsibilities of a traditional bookmaker.


Liability is what you are actually risking as a lay bettor.
Be always careful when placing a lay bet as it is easy to get confused about the stake and liability if you spend most of the time backing bets.
If you lay a bet with the price of 1.2 with a 10€ stake that means you can potentially win 10€, and be liable for 2€ in case the event occurs.
The danger comes with higher odds like 4.5 and you stake 10€, that means that your liability would be 35€ in case the outcome is winning.

Differences between exchanges and traditional betting sites

I will just mention some differences and maybe advantages you will have betting with an exchange.

Best odds

Traditional betting sites invariably incorporate their margin into the odds, essentially presenting "unfair" odds. Depending on the markets, conventional bookmakers may diminish your potential winnings by more than 20%.

In contrast, exchanges provide odds much closer to the fair odds of 100%. Now, consider all the successful bets you've had with traditional bookmakers and contemplate how significantly the total would differ over years of betting with those added margins.

You can be the bookie

You can place bets at the exchange by backing the outcomes, almost the same as with traditional bookmakers. But, with the exchange option to lay bets, you can play a bookmaker yourself and accept bets from other bettors.

Better Limits

Since you are not betting against the bookmaker or the house directly, you can place as much money as is available on the opposite side, backed by liability.

Winners welcome

Traditional bookmakers don’t like winners for obvious reasons, but exchanges don’t mind you winning as you will pay the commission from your winnings and the winnings are paid by other customers.


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