Put simply, the Betfair Exchange allows punters to bet against each other, instead of betting against the bookies.
Think of it like placing a bet against your mates in the pub, but the Betfair Exchange is a BIG pub (even bigger than your local Wetherspoons!) and you don’t know any of the ‘mates’ you’re betting against. You choose the odds you want to back a particular selection at, and if somebody else is willing to bet on the opposite outcome, at the odds you have offered, then the bet is matched. Betfair Exchange acts as that most trustworthy of mates who holds on to the money until the result is known, then gives the cash to the person that wins the bet.
The Betfair Exchange is similar to the stock exchange, but instead of trading stocks and shares, users are betting on the outcome of sporting events (and sometimes reality TV, politics and other events).
Punters are betting on the outcome of an event, and they can choose the odds that they want to back it at. So long as there is another punter out there that is willing to ‘take the bet’ at those odds, then your bet will be matched and paid out depending on the result of the event.
Betting against fellow punters means that there is no bookmaker margin to be factored into the odds, meaning you can often get better odds by betting on the Betfair Exchange. Instead, you pay a small commission to Betfair on winning bets only.
Decimal odds are becoming more and more common with traditional bookmakers now, but can still appear daunting to some – particularly when encountering them for the first time on the Betfair Exchange.
To put things simply, the decimal odds is what you multiply your stake by in order to calculate your returns. i.e. a £10 bet at odds of 2.4 returns £24 (£10 x 2.4).
To convert fractional odds to decimal odds simply divide the top number of the fraction, by the bottom number, and then add 1. i.e. 6/4 = 2.50 (6 divided by 4, plus 1).
If you’re still unsure you can hover your mouse cursor over the decimal odds on the Betfair Exchange and you will see an approximation of the associated fractional odds.
Placing a back bet on Betfair is, in effect, the same process as placing a bet with a traditional bookmaker. If there are odds on offer at a price that you agree with, then simply click the number in the blue box/left side of the exchange market and enter your stake and submit bet.
If you want to back something at a bigger price than what is currently available then follow the same process as above, but before submitting your bet change the odds to those that you desire. At this point it’s time to sit back and wait, if someone is willing to take your bet then you’ll be matched. If they don’t then it goes unmatched and your funds are returned to your Betfair account.
When placing a lay bet you are effectively acting as the bookmaker, in the traditional sense. If you were to place a bet on a sportsbook such as Paddy Power, it would be the bookmaker Paddy Power acting as the Layer in this situation. So when you Lay a bet on the Betfair Exchange, you are effectively taking the position of a bookmaker.
Lay betting means that you are betting on something not to happen. If you Lay a bet on a specific team to win a football match your bet will be settled as a winner if they do not win – i.e. win or draw.
When you lay a bet your are liable to pay out the winner their winnings should the selection win, the amount that you could be required to pay out is your liability. You will only be able to lay a bet for an amount that is available in your Betfair balance, i.e. your liability cannot exceed your balance.