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In our matched betting explained guide we walk through placing a bet using a bookie and laying it off using a betting exchange. This guide will explain in a little more depth what betting exchanges are and how we can utilise them whilst matched betting.

The main betting exchanges available in the UK today are Betfair, Smarkets, Betdaq and Matchbook. Betfair is the market leader and most established exchange so we will focus on Betfair in this guide.

How Bets Are Matched

When we bet on a horse to win with a traditional bookie they are “laying” our bet, this means if the bet wins they pay us out as a winner and if it loses they get to keep our money. When we place a bet for a horse to win on a betting exchange instead of a bookie laying our bet it is in fact another individual taking the risk (and of course taking our money if we lose!).

So, in our what is matched betting guide when we lay the horse at the betting exchange we are in essence playing the role of a bookmaker – if the horse wins the race we have to pay the backer and if it doesn’t win we get to keep their stake!

An Example of a Back Bet on an Exchange

When we place a back bet on the Betfair Exchange we must click on the blue button to add the selection to our betting slip:

Once the bet is in the bet slip we can then enter our stake and place our bet. Back bets on an exchange work in much the same way as they do with a bookie and usually offer better odds (although we must pay a small commission on any winnings).

An Example of a Lay Bet on an Exchange

When we place a lay bet on the Betfair exchange we must click the pink button to add the selection to the bet slip, the bet slip will turn pink to remind us we are laying the selection (again – saying it wont win).

In the above image we have placed a lay bet of £10 on Liverpool, this means if they do not win the match we simply keep the £10 stake (£9.50 after paying the 5% commission on winnings).

If Liverpool do go on to win then must pay the liability for the bet (NB – this could be much higher than our initial stake!). So in the above example we would pay out £6.90 on Liverpool winning.

The formula for working out the liability you might have to pay on a lay bet is: (odds – 1) * steak, it is also shown on the bottom of the bet slip when we place our bet:


Remember whenever we win at a betting exchange we must pay a small commission on our winnings and this should be factored into any calculations. If you make use of professional matched betting tools (such as those found at OddsMonkey) then this commission will be factored in automatically for you.

NB – With the exception of Matchbook we only ever pay commission on winnings at betting exchanges, never on losses!


Another important point to know about betting exchanges is the liquidity of the market, in other words how much money is available to back or lay at a certain price (remember it is other individuals we are backing and laying with on an exchange not a bookie). Some events such as a big football match will attract lots of people to bet and so there will be lots of money available on the exchange.

Other, less popular events sometimes have a lot less money available. In these cases we need to be careful to ensure enough money is available for our bet to be matched:

So, in the low liquidity market shown above if we wanted to lay Girona at a price of 2.4 we could only use a maximum stake of £3. We could put more money on but after the first £3 we would have to start taking money at the next, less favorable price (2.42 in this case, of which there is £254 available for us to lay).

Other Notes on Betting Exchanges

  • Different exchanges charge different commissions, for example Betfair charge 5% yet Smarkets charge only 2% (Although they usually have less liquidity and a lower range of markets to bet on!)
  • When close to the start time of an event prices can change very quickly, if you are new to using exchanges try to avoid the last few minutes before an event starts as price movements can get a little crazy at times (especially on Horses!).
  • Exchanges offer the ability to “cash out” your bets whenever you like, potentially locking in a profit regardless of the result. Increasingly bookies are also starting to offer this facility but usually on much less favorable terms when compared to an exchange!
  • Bookies will eventually restrict (gub) your account if you win too much or take too much value from their offerings (price boosts / special offers etc.) – Exchanges will never do this!
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