Betting exchanges are becoming very popular and will probably become one of the mainstreams of betting into the future. One of the reasons for this is because it personalises betting. It pits person A against person B rather than the current situation where it is us against the bookmakers.

The betting exchange is really just the neutral umpire with this type of betting. They collect the money and pay out to the winners, taking a small percentage as commission on the transaction. The betting exchange itself is not involved in setting odds or taking (or placing) bets.

One of the benefits of a betting exchange is your ability to back losers. If you feel that a particular team may struggle to win you can back them to lose. In effect, you become the bookmaker. Let’s take this weekend’s game between Blackburn (at home) and Chelsea. You may feel that on the road Chelsea could struggle to come away with the three points. Their current odds are 1/2. Blackburn are at 7/1 with the draw at 3/1.

Betting exchanges are designed for punters to offer bets. Someone may feel that Chelsea are a special to win. They offer to back Chelsea at the current odds of 1/2 (1.50). If no one accepts that bet, they may have to rethink the odds. The alternative is for you to offer alternative odds. You could offer to take the bet at 2/5 (1.40). If they accept, you both your sides of the bet. If Chelsea win, you lose. If Chelsea lose (or draw), you win.

You may think that backing Blackburn to win at 7/1 and saving on the 3/1 draw are better odds. They may be, but we are now talking about a single bet at 5/2 (your winning odds) that pays on a Blackburn win or draw. That’s a fair reward for either result.

This is one of the many reasons that betting exchanges have become popular – you can profit by backing a selection to lose rather win.