Sports bettors can find very attractive odds on football, basketball, baseball and hockey by visiting a betting exchange.
It allows you to go head-to-head with your fellow bettors, as opposed to betting against the house at a traditional sportsbook. You can also enjoy a great deal of flexibility, as exchanges allow you to create your own odds on upcoming games and challenge your fellow sports fans to take you on.
This article explains the concept of a betting exchange and how it differs from traditional sportsbooks such as FanDuel, DraftKings and BetMGM. We will break down the key advantages you can unlock by using an exchange, and point you in the direction of a licensed, regulated operator that offers this intriguing form of wagering.
What is a Betting Exchange?
A betting exchange is an online marketplace that allows you to bet against fellow sports fans on a wide range of events. It facilitates peer-to-peer betting, and it only takes a small commission on winning wagers.
There are two sides to any bet on an exchange. For example, you can bet over 45.5 points or under 45.5 points on an NFL game. When you place a wager, you will be matched against another bettor that anticipates the opposite outcome.
If you want to bet on a market that is not featured on the site, you can create it and set the odds yourself. You will then need to wait for another bettor to match it. In that regard, you can essentially take on the role of the sportsbook when you visit an exchange.
What is the Difference Between a Betting Exchange and a Sportsbook?
When you place a bet at an online sportsbook, you are playing against the house. It builds a house edge into its lines in a bid to earn a profit.
Betting exchanges differ from traditional sportsbooks, because they allow customers to bet against each other rather than the house. The exchange does not take on any risk itself, as it simply provides a platform on which bettors can go head-to-head.
The exchange uses sophisticated tools to automatically fulfill wagers at the most advantageous odds available, and it provides a seamless online betting experience for customers.
What are the Advantages of Using a Betting Exchange?
You will earn larger profits when you place winning bets at an exchange as opposed to a traditional sportsbook.
Operators such as FanDuel, BetMGM, DraftKings and Caesars Sportsbook build a house edge into their lines in a bid to earn a profit. The industry standard house edge is 4.77%.
For example, this is a typical line at an online sportsbook:
- Arizona Cardinals -2.5 (-110)
- Seattle Seahawks +2.5 (-110)
You can either bet on the Cardinals or the Seahawks to cover the line, and you need to lay down $110 to win $100. The sportsbook will aim to encourage a similar volume of wagers on either side of the bet. That allows it to earn an overall profit, while also covering its overheads.
By contrast, a betting exchange does not need to build a house edge into its lines. As such, the best exchanges fix their lines at +100. For example, you would find this line:
- Arizona Cardinals -2.5 (+100)
- Seattle Seahawks +2.5 (+100)
In that case you only need to lay down $100 to net a $100 profit. The exchange will then take a small commission on winning bets only. The best exchanges charge a nominal fee, such as 2%.
That means you would earn a $98 profit by wagering $100 on a team to cover the point spread on a game. By contrast, if you wagered $100 at -110, you would only earn $90.91. That is a significant difference.
You are essentially being charged just 2% on winning bets, as opposed to the industry standard of 4.77%. It means you need to secure fewer wins over the course of the season to end up in profit.
How Can I Place Bets at an Exchange?
Betting exchanges also give you an added degree of flexibility, as you can choose to set your own lines and see if anyone will match you.
When you click on a game, you will see the spread, total and moneyline markets that are currently available. If you like a particular line, you can select it and place your bet.
If you want to request a more advantageous line, just click on the team you would like to bet on and adjust the line. Place the bet, and the inverse of your wager will then appear. You can then wait to see if anyone will match your bet at the line you have created.
Can I Use a Betting Exchange in the United States?
Prophet Exchange recently launched the only peer-to-peer sports betting exchange in the United States. The company previously operated in the UK, but it is now fully focused on bringing exchange betting to American sports fans.
It has launched in New Jersey, so you can visit the Prophet Exchange website or download the app on the App Store or Google Play to begin your exchange betting journey today. Prophet Exchange has secured a market access deal for Indiana, so it will soon expand into the Hoosier State, and the plan is to roll the exchange out into additional states in the coming months.
The main challenge for a betting exchange is to secure enough liquidity to make it viable for players. Betfair, the world’s largest exchange, pulled out of the US market a few years ago after struggling to attract enough players. However, the market for legal sports betting has matured significantly since then, so it should be easier to attract players now.
It would be great news for bettors if Prophet Exchange manages to establish itself as a nationwide operator, as it provides you with far better odds than a traditional sportsbook. You can see the liquidity on each line when you click on any game at Prophet Exchange, and the early signs are very promising.
What Can You Bet On at an Exchange?
Prophet Exchange takes bets on the moneyline, point spread and total (over/under). It sticks to the most popular betting markets, as that allows it to secure the requisite liquidity to attract players.
When you place a wager, there are three potential statuses:
- Fully Matched – Your wager has been matched and it is locked in.
- Partially Matched – Part of your wager is matched, and a potion remains outstanding, as it is waiting for a fellow bettor to match it,
- Unmatched – The bet you created has not yet been matched, and it remains open for another player to take. You can cancel an unmatched bet at any time.
Prophet Exchange has a first in, first out system, which matches bets in the order they are received. It also matches bets automatically at the best odds available, ensuring you always get the best deal.
Do Betting Exchanges Offer Bonuses?
You will receive a 50% deposit match welcome bonus worth up to $250 if you sign up with Prophet Exchange. It has just a 1x rollover requirement, and any winnings then convert to cash. There is also a refer-a-friend bonus worth $50.