Over the next few articles, we will take a look at BETTING EXCHANGES. That is Betfair and
Betdaq primarily.
Betting Exchanges have become one of the most important developments in betting.
Exchanges have arisen as a traditional industry seeks to meet the challenges and opportunities of the electronic age. Their inception has followed reforms in on-course betting in the late 1990s that focussed on the selling off of prime racecourse bookmaker pitches. This brought in new money that boosted competition, often providing greater value to backers as bookmakers worked at slightly lower margins and offered better odds.
Betting exchanges are the publicly accepted face of what previously some professional backers had always practised. That is, betting amongst themselves, laying odds and placing bets other than with licensed bookmakers. The Betting Exchanges now offer this opportunity to the wider public.
In practice, a Betting Exchange operates by holding money deposited by each of its clients, which it holds in a separate private account for each one. The Exchange then operates a trading market where odds are offered or requested by its various clients, and when these are matched a bet is struck.
Once the result is known, an electronically recorded transaction triggers a debit or a credit – less a commission for the Exchange, to the individual client accounts. Bets can be made online or by telephone instruction to the Exchange.
Backers can conduct their accounts with immediate deposits or withdrawals by debit card or by cheque.
Next time, we will look how the all important odds work on the Betting Exchanges.
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