There is a theory that suggests that betting exchanges offer better betting odds. Some will declare that this not true; in fact, they claim that the opposite is generally true. So what is the real story?

If you look at the concept of a betting exchange compared to a traditional online bookmaker, betting exchanges don’t need to factor margins into their odds. Online bookmakers will set a market on a complete range of outcomes with the total take often reaching 110% or more. This means that no matter who wins, there is a 10% margin for the bookmaker.

Betting exchanges don’t set a complete market. In fact, betting exchanges don’t really set markets at all. As the name implies, they are a service that enables people to exchange bets. Bets therefore are based on single outcomes, not every possible outcome. A traditional bookmaker may set odds for a particular outcome at 4/5 for team A to win, 5/4 for team B, and 7/2 for a draw. A betting exchange could well offer 1/1 for team A and 6/4 for team B with the draw at 15/4.

The difference in price is only marginal, however, if you are betting in tens or even hundreds, those margins could be significant. In simple terms, betting exchanges do offer better odds. However, the one factor missing from the above equation is the betting exchanges commission – often around 5%. Since online bookmakers work to a 10% margin, a 5% margin for a betting exchange still leaves them slightly in front.

What is more attractive with betting exchanges is that you can become the bookmaker – in other words, you are betting on a team losing – and that is where most of the interest comes from. Yes, you get better odds, but more importantly, you have a range of betting options that are not available through tradition bookmaking services.