Difference Between Betting Exchanges and Sportsbooks

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Betting on sports matches can be a very different experience from one bookmaker to another. But there is another option available – betting on a betting exchange website.

In this article, we will explain the difference between betting exchanges and sportsbooks and talk about the advantages and disadvantages of both options.

Sportsbooks vs. Betting Exchanges

Before we look at the advantages and disadvantages of these options, let’s take a closer look at both of them.

What Is a Sportsbook?

A sportsbook is a traditional betting platform in which bettors are pitted against bookmakers. When you bet on a regular sports betting website with a sportsbook, the bookie sets the odds and you bet on them.

This type of betting has been the prevailing one for a long time and it is still the most popular way to bet today, regardless of the sports you want to bet on.

How Sportsbooks Work

When you join a regular sports betting website and create a new account, you can place a bet on any sports and markets offered by the bookie.

To place a bet, simply find the game that you want to bet on, select the market that you like, choose the amount you want to wager and confirm the bet.

If you want to make a multiple bet, you can add more games to your betslip and confirm the bet only after you have chosen all the games you want to bet on. This way, the odds for each selection will multiply and you will get the accumulated odds that are used to calculate potential winnings.

What Is a Betting Exchange?

A betting exchange is a relatively new model in the online sports betting industries and it is quite similar to trading on a stock market, which is why bettors on a betting exchange are also called traders. This is a platform for betting in which bettors are actually betting against each other and not against a bookmaker. That means that betting exchanges basically act as mediators between bettors or traders.

When you bet on a betting exchange website you will receive better odds because bookmakers earn their profits when they set the odds, which is called a betting margin. Betting exchange websites don’t set the odds because traders do it themselves. Instead, betting exchanges earn their profits through commissions on each bet. The commissions vary depending on the website but they usually start at 5% and decrease over time after you have placed more bets.

How Betting Exchanges Work

The main thing to know about betting exchanges is the difference between laying and backing a certain selection.

When you back a team or a horse to win, it is pretty similar to placing a bet using the sportsbook. Backing a bet basically means that you are betting on something to happen, while laying a bet means that you are betting that something will not happen.

For example, if you think that the home team will win, you can back the home win. If you don’t, then you can lay the home win.

It is also important to remember that when you place a lay bet, you are basically acting as a bookmaker because it is your job to pay out if you are wrong. You can also set your own odds, which can then be taken by another trader. In order for a bet to be complete, the betting exchange has to find at least two traders who are willing to place bets – one for a lay bet, the other for a back bet.

Betting exchanges give you a chance to place bets on the existing odds but you can also set your own odds and wait for another trader to bet on them. Setting your own odds is certainly better but you may find it hard to find another trader if you are looking to bet on a less popular sport. For example, football and horse racing are the most popular sports on betting exchanges in the UK and you will almost certainly be able to find another trader to bet on your odds.

Trading the Bets

Like a stock market where you can trade your stocks, a betting exchange also allows you to trade your positions, i.e. bets. You can trade your bets during the match, which is parallel to live betting on a sports betting website.

It is also similar to the Cash Out feature that many sportsbooks have because it allows you to get out of your bet completely or even partially, thus reducing your exposure or guaranteeing a certain profit. However, a Cash Out feature may not be available on all bets, while you are allowed to trade any bet that you want, as long as another trader wants to buy it.

Sportsbooks vs. Betting Exchanges – Advantages and Disadvantages

Now that we have explained the basics of both sports betting platforms such as William Hill, let’s take a closer look at their advantages and disadvantages.

Advantages of Sportsbooks

  • Fixed Prices – You get the odds in advance and know what to expect.
  • No Commission – You can calculate your winnings based on odds only, no need to take commission into account.
  • More Sports and Markets – Sportsbooks provide a larger selection of sports and markets you can bet on, including various specials.
  • You Can Bet on Multiples – You are free to add two or more selections to your betslip to increase your odds and potential winnings.
  • Bonuses and Promotions – Sportsbooks often have a rich selection of bonuses, promotions, enhanced prices, boosted returns, etc.
  • Bets Are Placed Immediately – Your bet doesn’t have to be matched by another bettor, so there is no risk of missing out on a winning bet.

Disadvantages of Sportsbooks

  • Odds Rarely Change – While odds may get shortened occasionally, you will hardly find a bigger price on a sportsbook.
  • You Can’t Lay a Selection – Although some sports come with markets that are essentially the same as laying a bet on a betting exchange, like a double chance in football, some sports don’t come with this option.
  • You Can’t Change Your Mind – With the exception of the Cash Out feature that is not always available, you can’t switch between selections in order to make a small profit.

Advantages of Betting Exchanges

  • You Don’t Have to Bet on a Winner – With the ability to lay bets you can simply choose a team that you don’t think will win and you are covered if the game ends up in a draw.
  • Better Odds – While this may not always be the case, you can usually find better odds on betting exchanges. Additionally, the odds may change throughout the day, in many cases in your favour.
  • You Can Set Your Own Odds – Acting as a bookmaker gives you the opportunity to set your own odds and wait for somebody to match them.
  • Some Betting Exchanges Are Rich with Markets – Although betting exchanges are still behind in this area compared to sportsbooks, Betfair and other big names can pretty much offer a similar number of sports and markets as some sportsbooks.
  • Some Betting Exchanges Offer Traditional Sportsbooks – At Betfair and some other betting exchanges you can use the same wallet to bet on the sportsbook or the exchange. This gives you more freedom to place the right bet and take advantage of better odds and other features.

Disadvantages of Betting Exchanges

  • Betting Exchanges Take Commission – You may have to pay commission on your bet up to 5% on some betting exchanges.
  • Some Bets Don’t Get Matched – If you place your selection too close to the start of the event, if you do it in an unpopular market or set your odds too low, your bet may not get matched.
  • Laying Bets Can Be Dangerous – If you are not careful when you lay bets, you can suffer heavy losses. You need to have patients, dedication and skill to profit from laying bets.
  • Betting Exchanges Are Not That Common – Since there is less competition when it comes to these specific platforms, betting exchanges may not feel the need to improve on their products and other features like bonuses and promotions, live streaming service, customer service, etc.
  • Betting Exchanges Can Be Complex – Betting exchanges are a bit more complicated betting platforms than sportsbooks and not the best choice for inexperienced bettors.


The choice between a betting exchange and a sportsbook, in the end, is entirely based on your personal preferences. Both platforms have certain advantages and disadvantages and many bettors choose to use them interchangeably to maximise the benefits and reduce the risks.

Whatever choice you end up making, keep in mind that it is also important to choose the right sportsbook or betting exchange as well, one that will suit your needs.

Learn about potential choices in more detail by finding information about the number of sports and markets offered, available bonuses and promotions, odds, available payment methods, the reputation of the exchange or sportsbook, quality of customer service, etc. All these factors should play a role in your final decision.