Betting Exchanges

Before I can discuss matched betting, you’ve got to understand the concept of betting exchanges. If there were no betting exchanges, there would be virtually no way to safely extract free bets and bonuses offered by bookies. It’s very important that you make yourself familiar with betting exchanges as you will have to use them all the time.

Betting Exchanges vs. Bookmakers

Traditional bookmakers only allow you to place bets for a selection to win (back bets). In case your bet wins, they pay you the winnings.

Betting exchanges, on the other hand, also allow its players to place lay bets (bets against a selection that win in case the selection doesn’t win).

Although there are several betting exchanges, I only recommend using Betfair as it’s the largest and the most reputable.

Betfair offers more markets, more in-play events and more people willing to bet against you than any other betting exchange.

How Betfair Works

Let’s consider the following example: John thinks that a particular horse is going to win, while Bob thinks that this horse is going to lose. They both log in to their Betfair accounts.

John is willing to place a £10 back bet on this horse and offers it at the odds of 3.0; Bob considers these odds adequate and places a £10 lay bet on this horse at 3.0.

If this horse wins, John will gain £20 and get his original £10 stake back; Bob will lose his liability of £20. If the horse loses, Bob gains £10 but John loses his £10 stake.

As you can see, Betfair provides a place in which punters can bet against each other. The only inaccuracy in the example above is that the names of players offering and placing bets remain anonymous; in fact, there may be several people on the other side of your bet, but you never know who they are.

The odds on Betfair are determined solely by the will of punters; they are what both laying and backing bettors agree they should be. Similarly prices in a market are determined by supply and demand.

Betfair Commission

Unlike bookmakers, Betfair doesn’t take part in betting. It doesn’t lose anything if you win. Betfair profits by charging a slight commission every time a bet wins; no commission is paid for losing bets. Betfair really doesn’t care if a user wins or loses. In contrast, regular bookmakers sometimes close accounts if they happen to win too much.

The size of the commission depends on your betting activity and the sums you wager; for new users it is 5% of net winnings but it can be reduced to as low as 2% according to the number of Betfair points you earn. However, to achieve a significant commission decrease you should be regularly betting with huge sums.

Signing up for Betfair

If you don’t have a Betfair account, sign up by clicking on the banner below, which takes you directly to Betfair  £25 losing-stake-refunded offer. Yes, Betfair also has a generous free bet. Note that using this banner is the only way to gain exclusive £25 free bet.

Other things to bear in mind when you register with Betfair:

  • Choose GBP as your account’s currency. It’s absolutely crucial as you won’t be able to change it later.
  • Make your first deposit with a credit card. You won’t get the bonus if you use other payment methods for the initial deposit. You’ll be able to use Moneybookers, PayPal or Neteller later.
  • Verify your identity as soon as you sign up. You have to do that to get the bonus. More information on identity verification can be found in Betfair Help.

This was only a short introduction to Betfair. If you are new to betting exchanges, I strongly recommend that you go to Belfair’s Help section and read the tutorials available there.

Also familiarise yourself with Betfair user interface and the way bets have to be placed. You must be comfortable with using betting exchanges to make money from matched betting.

Next chapter: The Qualifying Bet

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