If you are new to betting exchanges or if you are considering an account with another exchange, I hope the following summaries of the main betting exchanges will be of help.

Recently we have witnessed an explosion in the number of start-up betting exchanges, however you can be forgiven for not noticing. It seems that as betting exchanges are the way of the future, many businessmen have jumped on the band-wagon and have started new betting exchanges.

Great idea in theory however the betting exchange concept works when there are a good number of punters making use of the exchange. Little 'action' results in uncompetitive markets which in turn results in potential customers doing business with exchanges that enjoy strong liquidity across a wide market range.

Below I will discuss the most popular betting exchanges at the time of writing.

Betfair

Betfair (based in England) is by far the dominate player in the exchange betting industry turning over a staggering AUD $130 million on average per week with over 250,000 customers and growing! This is where the majority of major exchange players concentrate.

Liquidity on Betfair is second to none with all sports providing strong liquidity. It is not uncommon to see over AUD $10 million dollars to be matched on a test match from the time betting opens to the time the last ball is bowled.

Unlike other exchanges, Betfair offers an excellent coverage of Australian sports include Australian horse racing which attracts good liquidity.

The commission structure is 5% of net winnings down to 2%, stepping down in increments of .1%. This is the amount charged on a punter's net profit in a market and a punters current commission rate is dependent on the amount of money that is either won or lost in any particular market. The vast majority of punters are found to be between 4.5% - 5% commission levels.

Holding an account with Betfair is an absolute must for any exchange player and for that matter, any serious punter.

iBetX

Based in London, iBetX holds bookmaking permits in England and Wales. iBetX was founded in March 2003 and in our opinion is definitely an exchange of the future. Their commitment to the Australian market is of interest to punters residing in Australia. Along with a future focus on the Australian market, iBetX openly accepts US customers and as such, they are considered to be the market leaders for US horseracing. Their biggest markets along with US horse racing are UK horse racing and soccer.

Other markets offered include Golf, Football, Basketball, Tennis, Baseball, Cricket, Rugby, Motor Racing, Darts, Ice Hockey, Snooker along with specials markets such as Big Brother.

The commission structure starts at a maximum of 3% and reduces to 1% dependent on turnover.

One of the most interesting features of this exchange is they offer what they refer to as 'batch betting' which allows users to simultaneously enter hundreds of bets within seconds. The batch betting facility can also be geared up with a betting bot to further maximize betting markets and trading prices.

Tradesports

Launched in 2003, and now with over 45,000 members worldwide, TradeSports focus heavily on capturing the US market. As such, if your focus is betting on the American type sports, then this is your exchange.
Liquidity is excellent on all major US sports such as Basketball, US Football, Baseball, Golf, Tennis and they also offer the main European Soccer Leagues & US Horse Racing. You can even trade on Entertainment, Weather and the Financial Markets.

It will take a new user a couple of weeks to truly feel comfortable with their set-up.

This is the one if you concentrate on US sports!

Betdaq

Betdaq is based in Ireland and is the trading name of Global Betting Exchange. Betdaq was one of the first entrants into the market with businessman Dermot Desmond founding the company in the year 2000.

Betdaq attracts good turnover in most markets with the biggest market for the exchange by far being the European soccer markets which account for around 50% of all turnover. Liquidity on UK horseracing is also excellent and liquidity in the golf betting markets usually OK.

Commission starts at 3% which then steps down to 2.5% with the lowest rate being just 2%.

Betdaq is a very handy addition especially for those punters that bet on UK horse racing or European soccer.

Betsson

Betsson is an English betting exchange, established in 2002, and is based in London. This exchange has a very strong European appearance. There is no phone betting available at the time of writing and liquidity can often be quite poor. They offer limited markets.

Betsson charge a flat 4% commission which is not scaled. Regardless of how much money you turnover on the site, your commission rate will not change. This exchange also operates an online casino.

Betonbet

Originally formed by 150 Norwegian shareholders of which the majority are punters themselves.

Betonbet offers the standard commission structure close to identical to that of Betfair's. The commission is calculated on a sliding scale from 3% down to a low of 1.5%.

They have an excellent on-line help centre, which gives first time exchange users an explanation of what a betting exchange is, and how to use the exchange.

The main benefit of this exchange lies in what it calls its 'dynamic betting accounts' and its multi-bet functionality. The concept of the dynamic betting account is fairly straightforward and is unique to Betonbet. Other betting exchanges operate in the following way. If you have $100 in your account, and betting on an England Vs Australia rugby union test, you might like to lay England at the price of 2.0 for the $100 outlay. Your liability, should England win, is $100. Your bet is currently unmatched as you wait for another punter to accept your bet. Even though this bet has not been matched, the $100, which you stand to lose if the bet is matched, is frozen from your account reducing your liquidity.

With Betonbet however, you can place as many back or lay bets as you like simultaneously. In the above example, even though you have only $100 in your account, with Betfair this amount would be frozen, as you wait for a punter to match your bet. With the Betonbet site, you may offer as many bets as you wish. The moment a bet is matched, is the moment when the money is frozen from your account. The main advantage lies in the fact, that you can make a good number of offers, which may not be very generous to the other punters, and you can just wait to see if they become matched. If one of the bets does happen to be matched, then you would have been able to secure a great value bet. To offer this same bet, on the other betting exchanges, would require you to have the funds to cover the liability for each bet, frozen in your account, even though those bets may not be matched.

The other feature, which helps this exchange stand out from many of the other exchanges, is the ability for punters to offer and to accept accumulator bets. Turnover at the time of writing for such bets is very poor, although the idea is a sound one. It is argued that this will not be a success, due to punters reluctance to risk, say $5,000 to collect, say $50, or even less! Generally, punters enjoy making (not laying) bets of such a nature, as it gives them the dream, in much the same way as lotto does, of making a lot with just a small outlay. In the future, there will be a smaller number of punters willing to lay such bets. However, these will be punters (or bookmakers) who have a higher tolerance for large payouts, and a large bankroll to sustain a couple of unlucky losses. The margins for the layers are generally much higher for an accumulator, than they are for a standard single bet.

Other features of the site include a casino and a poker room.

In summary, if you are total new to exchange betting, you would be best advised to stick with the leading exchange Betfair until you feel comfortable with the operation of a betting exchange. Other exchanges you may like to keep your eye on from time to time include Ibetx, Spreadfair and Betfanatic.

By all means, keep the other exchanges in your sites. They all have their benefits which a thinking punter can use to their advantage. Enjoy your exchange betting!!

This article is protected by international Copyright © Elk Publications Pty Ltd October 2004 Please contact jesskirley@puntingace.com if you wish to reproduce this article elsewhere.