When it comes to placing a bet on horse racing (or any other sport you can think of) the choice of where and how to place your bet can be overwhelming. To help you make that decision, here’s my thoughts on the pros and cons you need to think about when deciding whether to use a Bookmaker or a Betting Exchange.
Let’s start at the beginning.
What is a bookmaker? A simple definition would be “a bookmaker or bookie is an organisation or person that accepts and pays off bets on sporting and other events at agreed upon odds”. Bookmakers can’t control the outcome of the events, but they can control how much they stand to win or lose on any particular result.
What is a Betting Exchange? A betting exchange allows members to bet against each other rather than a bookmaker. Punters can offer odds to, or request odds from, fellow betters. Where bookmakers risk going head-to-head with punters, a betting exchange provides a platform for punters to match bets against each other. The betting exchange takes no risk on these transactions as it takes a commission on winnings.
Betting Exchanges versus Bookmakers – Key Benefits
There are a number of key benefits that you will see when comparing a bookmaker and a betting exchange. The pros of using an exchange are:
Punters bet against each other by the matching of each bet, rather than against the bookmaker.
- From the definition at the start, you can see that a betting exchange is a platform that acts as the “go-between” for two betters. So, when you place a bet at an exchange you are not going against the bookmaker, you are betting against another better.
You have access to the true market value odds.
- Odds are one of the most important aspects of any betting company and punters are always on the lookout for great value odds. In the eyes of the punter, higher odds will equal more profits.
- With a bookmaker the profit margin is built into the odds, which reduces the value for a better.
- On the other hand, as an exchange charges a commission on winnings, they are able to offer the true market price. For the punter this means a greater profit on every winning bet.
- In Australia, Betfair is the only exchange on offer, and the one I always use for placing my win bets. On average, I see differences ranging from around 10 percent up to 20 and 30 percent with outsiders. For example, on 17 September I tipped at Narromine R2 H17 BART’S BULLET, and this paid $85.00 (Betfair Starting Price) and on TAB Fixed Odds were $71.00 and the Tote $33.60.
Punters can place both back and lay bets.
- Betting exchanges are incredibly versatile platforms that allow for a wide range of betting options, including being able to place back bets for the win or place.
- Bettors can place lay bets at a betting exchange which is not possible with a bookmaker. When you place a Lay bet, you are betting on an outcome NOT to happen. So as long as the horse you have laid comes anywhere from second to last, you will make a profit.
Betting Exchanges do not ban winners.
- A common problem that successful betters experience is having their bookmaker’s account closed for no reason. Or finding that their accounts have been capped with bets reduced to small amounts and, for online betting, seeing a very slow upload and missing the jump.
- Bookmakers are in the game to make a profit and don’t like having customers who bet to make a living on their books.
- Betting Exchanges don’t generally exclude winning customers as this would go against their business model, and every time a customer wins they take a commission. However, make sure you understand how the commission structure works and be aware that commissions can increase if you are in the 0.5% of betters that are making in the high six figures.
Bookmakers versus Betting Exchanges – Key Benefits
Now that we have looked at the benefits of Betting Exchanges, let’s flip the coin and look at the benefits of using a Bookmaker.
Whilst betting exchanges are becoming a very popular betting model with lots of flexibility, there are still some things you can do at a bookmaker that aren’t possible with an exchange, and these include:
Access to Promotions
- A big feature of today’s bookmakers is the constant offering of promotions to new and existing customers. To the point where there is now an expectation that there will be generous free bets, boosted odds and other promotions all the time. And betters will swap to other bookmakers if they feel they are not getting enough.
- Whilst there are times when you may receive a signup promotion or a commission free day with a betting exchange, the ongoing promotions are quite limited in comparison.
- There’s plenty of value in bookmaker promotions and it’s one of the main reasons that bookies are still so popular. A word of caution here. Make sure you fully understand the terms and conditions that apply for a promotion offered and what the turnover requirements will be before you can withdraw money. I quite often hear stories about punters not being able to withdraw their funds.
Boosted Odds
- Similar to the previous point, boosted odds are one of the most popular promotions the bookmakers offer. To increase betting activity before a fixture the bookmaker may increase the odds for a certain market. Click here to see a typical example from SportsBet.
- Boosting odds can greatly increase the amount of profit a better makes and is something that betting exchanges cannot do due to the nature of their model.
Popular Betting Exchanges and Bookmakers
So now you know a little more about the differences between bookmakers and betting exchanges, let’s check out the most popular platforms and what they offer.
Popular betting exchanges
Betfair is the world’s largest exchange with over 4 million customers. They were the ones who founded the betting exchange model back in 1999. At this stage, it is the only legally operating betting exchange in Australia. In other markets there is the option of Smarkets or the Ladbrokes owned BetDaq and so far there is no indication that they are going to open for in Australia.
Popular bookmakers in Australia
The recent boom in online betting means that we now have a wide range of options when placing bets. Not all bookmakers are equal, however, and ultimately it will come down to finding the best odds, the best value for you and somewhere that offers great customer service compared to their competitors. Here’s a quick round up of some of the more well known players in this field:
SPORTSBET
Owned by Irish betting giant Paddy Power since 2010, Sportsbet.com.au is one of our most recognisable Internet bookmaker. It has helped pioneer the mobile betting boom with innovative app features such as the Multi Builder – a special betting interface for Android and iPhone that makes it easier for betters to combine several different sporting events into one mega multi. For those who don’t just follow the races or sport, Sportsbet is also a trend-setter in novelty markets for current affairs, entertainment, music, politics and more.
LADBROKES
The Ladbrokes brand dates well over a hundred years from when it was first formed in the United Kingdom. They launched in Australian in 2013 and have become a significant player in the industry. Ladbrokes were the first bookmaker to introduce services like cash-out cards, and have built a reputation on competitive odds, best tote prices on racing and a number of promotions and weekly specials on sporting events all around the globe. Ladbrokes uses its status on the world stage to invest heavily in promotion and advertising in Australia and offers punters a popular ‘perfect round’ betting option, on which you can compete against other punters for big pools and jackpot cash.
BET365
Bet365.com is one of Britain’s great 21st century success stories. It now ranks among the world’s largest online betting networks, providing services to an audience of millions. This is definitely a bookmaker you should be a member of if you are based in Australia and enjoy International sports.
DYNAMIC ODDS
Many people think that this is Australia’s number one odds comparison service. Like a one stop shop where you can quickly see which platform or bookmaker is offering the best odds and value for your punting strategy. It’s not a free service but if you are spending a lot of time doing your own comparisons, then this could be useful for you.
BOOKMAKERS VS BETTING EXCHANGES: which is best?
So back to the question I raised at the start of this blog: which is better bookmakers or betting exchanges?
I trust that you can see now that each option and betting model has both pros and cons, and it can really come down to how you like to bet, what strategy you follow and what you use your betting for.
For me, personally, I back to win and ALWAYS use Betfair. A key factor for me, aside from not getting banned by bookmakers, is that once I learned how Betfair works I’ve discovered that it actually gives me a lot more information when the betting is on during the lead up to the race. When I do look at exotics or parleys, I turn to a bookmaker and generally use TAB.
Are you struggling with ideas and how to choose the best options for you?
Have you started using Betfair and find that you not sure how to get the best out of it and find all the information on offer?
If you answered yes to either of these questions, reserve your spot now for a one-on-one chat with me and let’s sort this out.
Have a great day on the punt! Cheers – Tim Wyatt.
