Betting exchanges and traditional sportsbooks represent two of the most popular ways to wager on sporting events online. But they operate on very different models and offer distinct advantages and disadvantages to bettors.
This article will examine the key differences between betting exchanges and traditional sportsbooks, and highlight the potential benefits of each for bettors looking to get the most value from their wagers.
Overview of Betting Exchanges
Betting exchanges provide a platform where bettors can wager against each other, rather than against a sportsbook. The exchange simply facilitates the wagers, with bettors setting their own odds on outcomes. Some of the best-known betting exchanges include Betfair, Smarkets and Matchbook.
Some key attributes of betting exchanges:
- Bettors can act as bookmakers, setting their own odds on events
- Other bettors can choose to “back” or “lay” those posted odds
- Commission on withdrawals
- Opportunities for better odds than traditional bookmakers
Overview of Traditional Sportsbooks
In contrast to exchanges, traditional sportsbooks set the odds and take positions on wagers. Well-known sportsbooks include William HIll, Bet365, Ladbrokes and many others.
Attributes of traditional sportsbooks:
- Sportsbook sets all odds on events
- Bettors can only back those odds
- Margin is implemented in every betting market
- Frequently run promotions to attract bettors
Betting Example: Exchange vs Fixed Odds Site
To understand the difference in betting on a sports exchange compared to a traditional fixed odds sportsbook, let’s walk through an example.
Betting on a Betting Exchange
On a betting exchange like Betfair or Smarkets, the odds are set by other bettors rather than a bookmaker.
For an Arsenal vs Liverpool football match, the exchange odds may look like:
- Arsenal win: 3.1 (back) / 3.2 (lay)
- Draw: 3.4 (back) / 3.5 (lay)
- Liverpool win: 2.2 (back) / 2.3 (lay)
On the exchange you can:
- Back an outcome by betting on the back odds:
- E.g. £100 bet on Arsenal win at 3.1 odds would return £310 if Arsenal wins
- Lay an outcome by betting on the lay odds:
- E.g. £100 bet laying Arsenal win at 3.2 odds would return £320 if Arsenal loses
So exchanges provide flexibility to play both sides of the market. The odds can shift rapidly based on supply and demand from bettors on the exchange.
Betting on a Fixed Odds Sportsbook
On a traditional fixed odds sportsbook like DraftKings, the odds are set by the bookmaker.
For the same Arsenal vs Liverpool match, the odds may be:
- Arsenal win: 7/4 (2.75)
- Draw: 11/5 (3.20)
- Liverpool win: 4/6 (1.67)
Here you can only:
- Back an outcome by betting on the posted odds:
- E.g. £100 bet on Arsenal win at 7/4 odds (2.75) would return £275 if Arsenal wins.
The sportsbook controls the odds and you simply decide whether to bet on them or not. There is less flexibility but the single fixed odds are simpler to understand.
So exchanges provide more control while fixed odds sites are more straightforward. Both offer a valid sports betting option.
Key Differences Between the Models
| Betting Exchanges | Traditional Sportsbooks |
|---|---|
| Bettors set odds | Sportsbook sets odds |
| Bet against other bettors | Bet against the sportsbook |
| Wager on outcomes to back or lay | Limited to backing outcomes |
| Lower profit margins | Higher profit margins |
| Less promotions | Frequent bonuses and promotions |
Unique Benefits of Betting Exchanges
Betting exchanges provide some unique advantages for bettors looking to maximise the value from their wagers:
Opportunity to Lay Outcomes
One of the signature features of exchanges is the ability to “lay” an outcome, effectively taking the bookmaker side of a wager. This provides more flexibility in certain situations.
Often Better Odds
With bettors competing against each other, exchanges frequently offer better odds than traditional sportsbooks on certain outcomes. This is especially true closer to the start of events.
Act as the Bookmaker
For bettors willing to take some risk, exchanges allow you to set your own odds and act as the bookmaker. This provides another way to potentially profit on your sports knowledge.
Benefits of Traditional Sportsbooks
While exchanges have some advantages, traditional sportsbooks also offer benefits:
Convenience
Sportsbooks provide a one-stop-shop to bet on a range of sports and bet types, including parlays and futures. Exchanges focus primarily on fixed odds match betting.
Promotions and Bonuses
Sportsbooks run frequent promotions, free bets, and odds boosts to attract bettors and encourage betting. These offers enhance value.
Less Complex
Sportsbooks are simpler to use for novice bettors, with the bookmaker setting the odds and the bettor simply deciding to back or oppose them. Exchanges have a learning curve.
More Mainstream
Sportsbooks have a bigger brand presence and marketing clout. Exchanges have a smaller niche audience at present.
In summary, betting exchanges and traditional sportsbooks take different approaches to offering wagers on sporting events. Exchanges allow bettors to set odds and lay outcomes, while sportsbooks create a convenient one-stop-shop for various bet types. There are convincing benefits to each model. Bettors are advised to consider the key differences outlined here and utilise both exchanges and sportsbooks to maximise the value of their wagers.
Ultimately, betting should be seen as entertainment rather than a source of guaranteed profits. Responsible gambling practices are encouraged, with bettors wagering sensibly within their means. Neither exchanges nor sportsbooks present a reliable path to financial gain, but can make watching sports more exciting when approached with moderation.
