Here we briefly explain the background to betting exchanges, how they work and how, led by Betfair, they have transformed the betting exchange industry for ever by enabling punters to bet P2P. We also look at the other major betting exchanges including Betdaq, Tradesports, ibetx and Betsson and compare their commission rates and features to help you decide which betting exchanges to use. Following the failure of Sportingoptions we also consider whether your money is safe.
Background
How do betting exchanges work?
Which betting exchange?
Is my money safe?
Background
In the old days if you wanted to place a bet on a sporting event you had no choice, you went to a bookmaker. In 2000 this situation changed forever when a new type of website emerged which enabled people from around the world to bet person to person without a bookmaker in sight. This type of betting and the sites offering it have been variously described as P2P betting, bet brokers, match betting, bookie free betting and the description which has now become almost universally adopted – betting exchanges. Instead of paying the bookmakers' profit margin the punter just paid a small commission on winning bets to the site. Also for the first time punters were able to bet that something would not happen, something which had previously been the bookie's monopoly. A new age of betting freedom opened up putting the punter firmly in control. Early competition amongst the betting exchange pioneers saw Betfair gain early supremacy as several of the other pioneers closed including the excellent but unwieldy Play121. In 2002 when Betfair took over their main rival Flutter, a superpower emerged, which continues to dominate the industry to the present day.
For more information of the history of betting exchanges see back issues of Bet Exchange News and Bookie Free News in the articles section of this website.
How do betting exchanges work?
Betting exchanges bring together punters who take opposing views and enable them to bet against each other. Each member has an account with funds which are frozen until the outcome of the event is known. The betting exchange then moves the winnings from the loser's account to the winner's account, taking a small commission for its trouble. As long as the funds are not tied up in an unsettled bet, members can make a withdrawal any time they please.
The major betting exchanges
The betting exchange industry is dominated by Betfair who it is estimated account for in excess of 90% of all exchange betting turnover. The remaining 10% is shared between a long list of betting exchanges. The following are some of the sites which we feel have something in particular to offer. Click on the more info to see full details of each site, including features, commission rate comparisons and where appropriate special offers for new accounts.
Backandlay more info
Betbug more info
Betfair more info
Betonbet more info
Betsson more info
ibetx more info
Mansion more info
Parbet more info
Spreadfair more info
Tradebetx more info
Abetx more info
Is my money safe?
A betting exchange only acts as custodian to your funds so that your opponent can be paid. Therefore there is no reason why your money should ever be at risk. Most betting exchanges have a policy of keeping their members' funds in segregated or ring fenced accounts, which should mean that in the event of the business failing, that all members' funds will be safe. Unfortunately in 2004 when high profile betting exchange Sporting Options went out of business their stated segregated funds policy was found to be worthless as clients were left high and dry. Luckily Betfair came to the rescue of most punters, but it meant that we can no longer blindly rely on the fact that our funds are ring fenced as a guarantee of security. Before deciding on whether to entrust a betting exchange with your funds you need to make your own judgement. This article in Bet Exchange News may help you with this.