Instead of using a bookmaker, sports betting exchange users can compete against one another.
Sportsbooks typically take a small commission on winnings from customers, so if they permit a betting exchange, they need not worry about certain sides.
A sports betting exchange is essentially a wager placed by two individuals. It is similar to placing a wager with a friend on which team will win. The other person is on the opposing side, and one person takes one side.
The fact that you can play the role of a bookmaker by laying a selection is the primary distinction between an exchange and a bookmaker. In the traditional sense, backing a selection is still possible because it guarantees the outcome of the bet. For instance, you are betting that the Dallas Cowboys will win as a -7 point underdog.
Laying a selection is saying that the bet will not occur, which is the opposite of what you mean. As is typically the case with sportsbooks, you would wager on the Cowboys not to cover as -7 point favorites in the preceding example. You also need someone to take the opposite bet that the Cowboys will cover for this to work.
Similarities exist between a sports betting exchange and a stock exchange. You can buy stocks and short them on the stock market. You buy or short a team in sports betting.
If a sportsbook doesn’t offer the bet you want because it thinks there’s too much risk, that’s the main reason to use an exchange. You should be able to bet on anything in an exchange as long as someone else is willing to bet on the other side.
Better odds and better value are typically available in addition to a wider selection of wagers. The odds in an exchange are determined by a multitude of bets placed by other individuals, in contrast to sportsbooks, which must take a cut off the top to make a profit. Because they match what bettors think, these odds could be better than those at a sportsbook. No one will take the other side of a bet if they aren’t trustworthy and someone posts it at ridiculous odds.
Sportsbooks continue to dominate betting exchanges, but as sports betting expands across the United States, this may change in the future. Beginning in the early 2010s, new businesses began testing the effectiveness of exchanges in the United Kingdom. Since then, they have gradually gained momentum. The options available to participate in betting exchanges are limited, but they may expand over time.