A betting exchange is where bets placed and layed by individuals are matched against each other.
This means if one person wants to back a horse at 12/1 for £5 then they can place that ‘Back Bet’ order and wait for someone else to take the bet. The person who takes the bet is called a ‘layer’ because they ‘lay’ the bet in identical fashion to a bookmaker. The layer is in fact being the bookmaker.
Because betting exchanges allow this person-to-person betting, anyone using a betting exchange is able to either back a selection, in the usual way, or lay a bet. It lets you become a bookmaker for your chosen selections, yet you do not need to have a bookmaker’s licence to be allowed to do this.
Betting exchanges give you the facility to trade on sporting events and so lock-in a profit. It allows you to take advantage of arbitrage situations by say backing a horse at 10/1 and then laying it at 6/1 (assuming the price contracts) so as to ensure yourself a profit whether the selection wins or loses.
All we have given you here is a brief explanation of the workings of a betting exchange and how it could benefit you and your betting regime. There is an excellent website that explains betting exchanges in fine detail: what they are, how they are used, how to profit from them and it also lists a betting exchanges FAQs section. If you read that website then there you will have a fine grounding and be ready to start trading on a betting exchanges. Just follow this link: Betting Exchanges.
The biggest betting exchange in the world is the multi-award winning Betfair betting Exchange.