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Betting exchangeHorse Racing Master > Betting exchange
A betting exchange is a website that acts as a broker between parties that want to place bets. The first site that embraced this concept was Flutter.com in 2000, but it was really brought to the masses by Betfair, which was founded a short while after. The thing that made Betfair the market leader is the fact that it embraced a pure exchange model. Later, Flutter adopted this system also and even improved on it, but Betfair ultimately claimed the greater part of the market by being the first. The biggest market share that Flutter ever had was an estimated 30%, but on average Betfair dominated with an estimated market share of 84:16. After the merger, Betfair took over Flutter’s customers, and adopted its better functionalities. It was a smooth ride from there on, and now Betfair controls a reported 90% of the online betting market. The odds exchange is made in decimal odds, which is the European model, rather than in fractional odds, which is the British model, although the company is from the UK. Apparently, the decimal odds are easier to use and understand. But the most important innovation that the betting exchanges bring to the business is the possibility of betting in both ways. You can bet in the traditional manner, by placing a bet on an event and anticipating that it will happen. In the case of a horse race, for example, you place a bet that a certain horse will win the race. If it happens, you get a profit which is directly proportional to the amount you staked and the odds that the respective horse had. Then, there is also the possibility of laying a certain event. Let’s keep the example to the same horse racing hypothetic race. Now you have the possibility to lay a horse, which means that you bet that the respective horse will not win the race. The advantages of lay betting are obvious. It is much easier to predict that a horse will not win, instead of going through countless calculations trying to predict which horse will win. Betting experts know all about this, and make serious income from this activity. However, the winnings are calculated differently when it comes to backing or laying. In the case of backing, it’s easy and most people are accustomed to it. Your gain is calculated by multiplying the odds with the amount of money staked. However, in the case of laying, the profit is an amount equal to the amount of the stake. For instance, if you lay a horse for £50 and it doesn’t win the race, you get a profit of £50. As a conclusion, the world of online betting has been revolutionized by Betfair. Although it was Flutter who started the ball, it was eventually engulfed by Betfair, which has become the most important betting exchange.
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