Until fairly recently the only place you could place a bet on a horse race was at the track or at a bookmakers. With the arrival of the internet however came on-line bookmakers, which made every bookmaker a lot more accessible to everyone – it also became easier to compare prices between these different bookies by using sites like www.oddschecker.co.uk to view prices across a basket of bookmakers all at once. No longer were you tied to a particular bookmaker because it was the only one in your town.
Betting Exchanges also arrived and they provided a new method of betting altogether, by removing the standard bookmaker from the equation and bringing together people who wanted to trade different sides of a particular bet. This means that a normal punter now has the ability to act as bookmaker and is able to lay a particular horse if they think its going to lose.
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Betting exchanges have both advantages and disadvantages –
|The ability to lay horses||Can’t bet at starting price|
|On average, 20% better odds||Pay commission on winnings|
|No maximum bets||Ideally need access to the internet (although can trade by telephone subject to minimum amounts)|
|The ability to bet in-running||Rule 4 deductions are effectively higher than a bookmaker (see below)|
As betting exchanges are not acting as a bookmaker themselves, they provide the bet matching service in return for a commission, which varies between 2% and 5% most of the time, depending on the exchange you use and the event you are betting on. Betfair also runs a commission points system whereby the more that you bet, the less % you pay in commission.
Betfair is the most popular exchange, and the liquidity (the amounts requesting to be matched) is usually high.
Below is an overview of how an exchange works, it has been based on Betfairs site however before trading with Betfair you should visit the Betfair website and view the demo there and read their rules and terms and conditions.
In order to trade with Betfair you will obviously first need to open an account – to open an account with Betfair and qualify for a free £20 bet
How to bet
Using the markets menu on the left side of the screen, you can navigate to the race or sporting event you want to bet on, where you are then presented with a list of the runners and a table of different odds and amounts.
The first thing to remember with Betfair is that the odds shown are digital odds – that means you have to deduct 1 from the figure being offered. E.g. odds of 3.4 on Betfair is actually 2.4 to 1. That means if you bet £10, you would get £24 back is you won (less commission)
The left hand side (blue) is people laying – offering the odds shown, up to the amounts shown underneath.
The right hand side (pink) is people backing – they are requesting certain odds, up to the amounts shown underneath.
The figures will stay there until they are matched. That is, someone accepts the level of odds being offered/requested and matches an amount to it.
In the example above, the highest odds being offering currently is 2.9 (1.9 to 1) for amounts up to £247. If you wanted to bet on Moscow Flyer at those odds you would click the blue box and type in the amount you wanted to bet and click “submit” and then “yes” to place the bet. Your bet would then be matched and you would have a valid bet in place.
Alternatively you may wish to change the odds you wanted to receive to 3.0 (2 to 1), in which case your bet would then appear in the pink box under the figure 3.0 and will wait there until someone matches it. See below
The process is the same if you wanted to lay Moscow Flyer except you would be using the other (pink) side of the table. If you wanted to lay Moscow Flyer at 3.1 (2.1 to 1) you would click on the pink box and enter the amount you wanted to lay – the betting window would tell you what your exposure would be, for the amount you have staked. E.g. If you laid £10 at 3.1 (2.1 to 1) your exposure on the race would be £21, should that horse subsequently win.
Alternatively you may wish to change the odds you wish to offer to 3.0 (2-1), in which case your bet would then appear in the blue box under the figure 3.0 and will wait there until someone matches it. See below.
Whether you are betting or laying – it is only when you are matched that your bet is accepted and you have a valid bet. If the race goes off and you haven’t matched your bet, you don’t have a valid bet.
When you type in the amount of your bet in Betfair, it will automatically calculate what your exposure is in the right hand panel if you are laying, or your potential profit if you are betting. It will also recalculate it for you, should you change the odds or amount.
This is a very basic overview of how the Betfair exchange works. Before commencing betting you should spend some time becoming familiar with the site and using the “play” area.
When the race starts all unmatched betting requested will be voided and the market reset for in running betting. This means that you can place bets as the race unfolds – prices varying quickly as a horses performance in the race is shown.
As a word of warning, in running betting is very different and a lot faster than normal betting. There is a big balancing act between knowing which horses you want to follow in the race and knowing their colours and watching the market and the race at the same time. In addition, people who watch the races through satellite television will also experience a delay of a few seconds between the live event and the pictures arriving on our screens. Others who don’t have that delay can use it to their advantage.
Be very cautious if you intend to bet in-running.
Betfair “Rule 4” Deductions
For full details of rule 4 deductions, please see the relevant part of the “Types of Bet” section.
Betfair apply the same percentages for rule 4 deductions to their bets. However it should be noted that they are applied to the higher (digital odds price) so in actual price terms the deductions are larger. For example.
You have bet £100 on a horse at 8-1 and a withdrawn horse causes a 25p rule 4. Your horse wins.
At a bookmaker your 8/1 will be reduced to 6/1 (25% of 8) and your return will be £600 plus your stake
At Betfair your 8/1 (9.0 digital odds) will be reduced to 5.75 to 1 ( 25% of 9.0 ) and your return would be £575 plus your stake (less commission)
In reality, it maybe that the odds you managed to match at on Betfair were higher than the 8/1 you would have got at a bookmaker and therefore you may still be advantaged to bet with Betfair, but you should be aware of the difference in the deduction rule.