What is a Betting Exchange?

A betting exchange is a platform where you bet against other people rather than against a bookmaker. Because there is no bookmaker setting the odds, you can do something you cannot do at a normal bookie: you can lay a bet, which means betting against an outcome.

How it is different from a bookmaker

At a bookmaker, you can only back an outcome, and the bookmaker takes the other side. On an exchange, other customers take the other side. You can be on either side of a bet: backing an outcome, or laying it for someone else to back.

Commission

Exchanges do not build a margin into their odds the way bookmakers do. Instead they take a small commission on your net winnings in a market. That is how they make their money.

Why it matters for matched betting

Matched betting needs you to lay a bet to cover the back bet you place at a bookmaker, and that is only possible on an exchange. In Australia the most widely used exchange is Betfair.

Next steps

Learn about Betfair, or read the complete guide to matched betting.