Betting Exchange vs Bookmaker

Smarkets Review

The great thing about this debate is that you don’t have to choose one over the other. It’s perfectly reasonable, sensible even, to pick a different option depending on your bet. All you really need to know is where a bookie is generally better than a betting exchange and vice versa.

betting exchange bookmakers

There are many options to consider when comparing bookies vs exchanges. Below we list all the things you should be thinking about before choosing where to place your money.

  • Who has the best odds?
  • Lay Betting
  • Matched and Unmatched bets
  • Having your account closed
  • Multiple bets
  • Trading
  • Promotions
  • Courtsiders
  • Best in-play offer
  • Cash out

Best odds

It’s amazing how little emphasis most punter put on this point when choosing where to have a bet. Instead of looking for who offers the best odds, gimmicks such as a funny twitter feed or relevant half-time TV adverts dictate where they place a bet.

So, in order to eradicate all confusion, and although this article also has a long list of other factors for comparing bookies vs betting exchanges, we’ll state here first, the one overriding factor that should be considered head and shoulders above the rest. And that is, who has the best odds.

This should be a simple question to answer. But if I want to be fair, and give as helpfully an answer as possible, it’s a little trickier than just saying bookie or betting exchange. Why? Because both have areas where they perform better. So let’s break it down into subsections, and say who is best in each.

Match result market in top flight football.

For bookmakers, betvictor is renowned for having great match result odds, so what better company to use as our benchmark. Taking the odds from every match in the Premier League (2015/2016 season), just before kick-off, you get an average book percent of 104%. Obviously, for any Premier League football match, betfair is a tad over 100%. But this doesn’t take into account the commission charged, which is 5% for the average punter.

We understand betfair isn’t the only betting exchange – in fact, you can see our article with a list of betting exchanges here – but they are the biggest and most popular. So we have used them as a comparison. Some of the new kids on the block, entering the world of betting exchanges, may charge less than this. But this is generally seen as just a promotion to attract current betfair punters to their site and will likely not last very long.

This approximately 1% isn’t much, you may be thinking. But these are the type of margins that can turn losing systems/days into winning ones. And it gets better, cos betvictor isn’t always top price. If you look at the average book margins across several bookies you’ll find this margin closer to 101%, and this defiantly starts to make a difference.

In fact, looking at any betting market where there are only 2 or 3 possible outcomes, bookmakers will generally be your better option.

Betting markets with many options

The greater the number of outcomes, the higher the bookies inbuilt margins will be. For example, if you were to look at correct score odds or half-time/full-time markets, you’ll notice betting exchanges start to open a sizable gap in odds.

Liquidity on small events and early odds

If you’re looking to get your bet on early, your best bet is with a bookmaker. As betting exchanges are peer-to-peer betting, most punters don’t want their money sitting around doing nothing. Also to just leave your money up waiting to be matched you’ll likely find yourself on the wrong end of big moves due to team injury news.

If it’s not a mainstream sporting event, it’s probably best to head over to a bookie. Events with little interest can have terrible odds on exchanges, whereas bookies will normally offer up odds with their normal margin templates.

Outright markets

For outright markets, it’s normally better to bet with a betting exchanges, but only if the event is very close to starting. I say ‘normally’, because it isn’t a clear cut win for exchanges. If the selection you wish to bet has relatively short odds, let’s say the first few contestants in the betting market. Then the bookies are more likely to be a better option, as they like to be competitive on favourites.

If on the other hand, you are going for the bigger prices in the field, betfair ordinarily offers more favourable odds. Now, if I was writing this article any other time than the end of the 2015/16 football season, this probably wouldn’t get a mention. But it’s worth noting, betfair also caps their available odds at 1000. If you were a Leicester punter at the start of the season, you’d be pretty mad at yourself for only backing the 1000 offered on betfair and not the 5000 bookmakers had on offer.

Horse Racing

Horse racing is a tricky one; it’s basically an outright market, so the points mentioned above stand. But on top of that, most bookies price up horse racing knowing they’ll have to offer an each-way option. For some races, this doesn’t matter, but for others this creates great value – see our each-way betting tips. Also, as you’ll read later on, bookies offer lots of promotions and bonuses around horse racing, which has to be taken into account. My advice, if you don’t take the promotions into account, would be the same as for outright. Look at bookies for the short priced horses, and exchanges for the big stuff.

Lay betting

Betting exchanges are the clear winner here, the main selling point for betting exchanges is your ability to act as a bookie, and lay bets. This is all displayed in a nice matrix, letting you see both the back odds and lay odds together.

Now, although exchanges are the clear winner, it doesn’t mean bookies get zero points for lay betting. In fact, for me, they score higher on the football markets I’d normally punt on. But you have to use your brain a little, and fortunately for bookies, the majority of punters are lacking in this department.

All bookie two-way betting markets should be looked upon as markets offering an easy lay option. Fair enough, it’s not labelled nicely like on betting exchanges with a blue ‘back’ section and a ‘pink’ lay section. But every bet on one side of the two-way is effectively a ‘lay’ bet against the other side. For example, in a tennis match involving Murray and Djokovic, ‘backing’ Murray has the same effect as ‘laying’ Djokovic. It’s just a little confusing to calculate the odds at first.

‘Double Chance’ betting is also a ‘layers’ bet-type, without the name. Here you are essentially backing two possible outcomes, and therefore laying the third option.

And it doesn’t end there for the bookies. Anyone familiar with a method called ‘dutching’ will know that you can lay any selection, in any betting market, by backing all other possible options. This is time-consuming and requires way too much maths for the average punter, but it can be done. This is why I say bookmakers don’t score zero points for offering lay betting, but clearly betting exchanges have the upper hand here.

Matched and Unmatched bets

Unmatched bets are more commonly associated with betting exchanges. When you’ve placed some money a few ticks away from the currently offered odds, or you are betting on a market with very little liquidity. It’s one of the reasons some punters sign up with a bookmaker instead of an exchange – you know a bookie will take a bet at the odds they are offering.

This perception is flawed. Ok, you can’t always get a bet on the exchanges due to liquidity, and defiantly not if you’re asking for odds that are straying from the general consensus. But are bookies any better? Not always, that’s for sure.

If you are a casual punter, doing accumulators and £10 singles here and there, you’ll probably never notice any restrictions. But these restrictions are in place, and there even stricter if you’re a winning punter.

Bookies don’t like punter having a better skill set than their odds compilers. They are always on the lookout for such bettors, and once found, they will heavily restrict the amount that customer can bet. Generally you’re not informed of this decision, but you will notice it the next time you try to have a decent sized bet.

Also, liquidity isn’t a bottomless pit with the bookies either. And although you can get a fair whack of money on the main betting markets, just like with betting exchanges, you’ll find some market will be limited to very low amounts – again, similar to betting exchanges.

Specials and Novelty bets are where these limits are most prevalent, as bookmakers often don’t know what the true odds should be. But you’ll also see this in sports the bookie doesn’t deem to be overly relevant to their core customer base. More is better, is the mantra of a modern online bookmaker, quality comes second. And it’s this mindset that forces trading rooms to try and regain some control of their liabilities. They do this by offering very low limits on singles and rarely punted bets.

Having your account closed

An extension on a points made in the section above. Not only do bookmakers restrict winning customers, some also close accounts of winning customers. We have a whole article on the tactics you can use to try and avoid having your account closed, but if you’re a winning punter you’re generally fighting a losing battle.

I could be wrong, but I haven’t read anything on people saying their betting exchange account has been closed or even restricted (except for those that are being stung with betfair premium charge). So bookies are a clear loser in this category and without some sort of government action, bookmakers’ will always take liberties with winning customers. Punter power will never be enough, because the ratio of winning punter that could make some noise, will be drowned out by the chatter of losing punters who just don’t care.

Multiple bets

This isn’t even a competition; bookmakers offer a far greater selection of multiple bets than ‘exchanges’ do. You get all the classics like Lucky 15, Yankee, Heinz bets and many more.

With betting exchanges you just get single bets. Although if all your bets start at different times you can treat each ‘single’ as part of an accumulator and simply put all the winnings from the previous bet onto the next event. But in all fairness, that’s just crazy talk.


Back high, Lay low is the chant of the professional trader. Exchanges were made for this type of betting, and brought a whole new type of punter to the game. Most of them are shrewd, and probably didn’t consider sports betting as a viable means of making money until betting exchanges came along.

But trading can, and always has been, a betting strategy used with bookmakers’. It isn’t advised to do two of more portions of a trade with the same bookie, but trading across several is definitely an option. The type of trading done with bookies goes by the name of arbitrage betting and is as old as bookmaking itself. You do this by backing every selection, at top price, when the book percentage is in your favour.


Betting exchanges can’t compete with bookies when it comes to promotions. They make a small percentage of each bet – their commission, which is normally between 2% and 5%. So if they were to offer a decent sized sign-up bonus, they would need a large amount of turnover before they begin to make a profit from the customer. Which is too high a risk to take.

Bookmakers, on the other hand, don’t have this worry. If they offer you a fifty quid sign-up bonus, and you go on to lose that fifty, the bookie is all square. And are now looking to make a profit off you.

But sign-up bonuses aren’t the only place where bookies excel in comparison to betting exchanges. If you are a horse racing punter, then their best odds guaranteed promotion would be of great interest to you. The knowledge that you’ll get SP if it’s greater than the odds you originally staked is too good not to consider. And this type of promotion is fast becoming standard.

A couple of bookies, bet365 being one of them, also offer a free bet on the next televised race if you pick a winner. Which can be looked at as having a whole point of extra value to your original bet.

These are just some of the great promotions bookies can offer over betting exchanges. You also have a whole host of free bets, price boosts and extra ‘place’ positions, to name a few. And bookmakers are always trying out new promotions in an attempt to attract your custom.


This is only an issue with betting exchanges, and I say issue only because it’s not something the vast majority of bettors will be getting involved in. Of course, if you are a courtsider, then you love the fact this practice isn’t discouraged on betting exchanges.

For those of you that don’t know what courtsiding is, it’s when a punter is in attendance of the sport he’s betting on. Being at the venue gives a shrewd punter a decent advantage, because the few seconds time delay in televised pictures is plenty of time for him to mop up what are now erroneous odds. Good for him, but if like myself, you are only going to be on the wrong end of this exchange, it’s a hazard to punting on live events with betting exchanges.

You could argue that bookies also have the ability to take advantage of the fact they have scouts at games, stadium TV feeds that are slightly faster than commercial TV, and data feeds provided by event organizers. And maybe they would if they could use the several seconds’ advantage to just offer odds on the now erroneous side of the bet – like the courtsiders. But they can’t; they will have to offer odds on all possible selections the bet type normally offers. And in doing this they are just as likely to take bad money instead of good.

If you want to learn more on courtsiding, here is a very entertain and amusing book on the subject. Although it is a bit light on technical details. Game, Set, Cash!: Inside the Secret World of International Tennis Trading


Deciding if in-play betting is better with bookies or betting exchanges is another tricky one. With in-play betting, or live betting as it’s often called, you have to take into account many of the points discussed already – but with the addition of a few extra points discussed below. With pre-event, all the top end bookies provide roughly the same service. Odds differ only slightly, and bar a few obscure sporting leagues they all have the same sporting events. In-play is different, there is a considerable difference between bookies, which in turn makes it hard to compare to betting exchanges.

Firstly, make sure you read the section on courtsiding. This is a massive disadvantage when in-play punting on the exchanges, and has to be a big factor in your decision making.

Looking past the potential of being ripped off via courtsiding, the next biggest factor is who offers the best odds. And here’s where things differ from pre-event. Bookies know the spread of single bets vs multiple bets is much higher in-play. And this results in a smaller theoretical margin of profit for them. So in order to offset this, bookies use less competitive odds in-play.

Another problem for bookies, which is becoming less so due to all the automation and feed driven events, is the high likelihood of trader error. For manually traded sporting events, bookmakers need to rely on traders having 100% concentration, throughout the whole event. Odds can change quickly and any lapse in attention can cost a good amount of money. So another reason for in-play odds not to be as competitive, giving the trader a little more leeway for error.

The standout bookie when it comes to the number of events offered in-play is bet365, and it’s not just the main sports such as football and horseracing, they also offer the likes of water polo and table tennis. Due to liquidity issues, betting exchanges can’t compete with this, as it would be a waste of time. But when it comes to the big sports they more than hold their own.

Cash out

Every bookie worth his salt now has a ‘cash out’ option. But it wasn’t the traditional bookies that first offered this feature; it was the king of the exchanges, betfair. Of course, you could always cash-out on betfair exchange, just by backing’ then ‘laying. This though, was clearly too much for the limited brain power of many punters. So a one-click button, that did the hard work for you, was introduced.

There wasn’t a lot of noise made about cash-out when it first launched, but it once again showed betfair’s ability to innovate and be a market leader. Now I’m sure you are all well aware, cash-out didn’t stay in the domain of the exchanges for very long. And it was betfair, who wanted to differentiate their newly release sportsbook from the crowd, that first launched cash-out for traditional bookies.

Was this good or bad for them? It’s hard to say, cash-out defiantly helped in the early day of their sportsbook. But now everyone has copied, and some even doing it better than them, the end result is a feature that competes and takes money away from their betting exchange.

Cross over, bookies having exchanges and vice versa

The grass is always greener on the other side, is the expression. And that’s how it feels if you are a bookie or running an exchange. So in order to get a piece of the action that your competitors are getting it makes perfect sense to combine the two.

To test the theory behind this assumption, a couple of firms have tested the water by doing exactly that. Betfair has opened a traditional sportsbook, and Ladbrokes acquired betdaq to add to its site. Both seemed like great moves on the face of it. But as a punter, and someone that works in the industry, it appears to me neither firm has merged the different betting methods together very well.

It’s simply just a case of both companies offering two standalone products. Yes, you can now use either method via one wallet. But has this hybrid company added anything that would make you say they are better than just a bookmaker or just an exchange? I think not. And in the case of betfair, I’d say it has resulted in them taking their eye off the ball on what’s their core product, the betting exchange. Meaning it’s stagnated for the last few years, giving an advantage to the tradition bookie, who have been making giant leaps in how they do business.

I’d even say that now, because of this crossover, that the biggest betting exchange is probably more of a bookmaker than they are a betting exchange. Which doesn’t bode well for the future of betting exchanges.


If you have read your way through this whole article, then it’s not going to come as a great surprise that I’m going to say that in my view, bookies win the fight of bookmaker vs betting exchange.

But this would be a point’s decision victory and not a knockout. Yes, bookies came out on top for many of the points discussed in this article. But I did say in the very first topic discussed that having the best odds is considerably more important than all the other points mentioned. And on this point, betting exchanges hold their corner pretty well.

Please now have your say in the comments section, becasue being someone working in the industry I might no longer see things the same as the average punter.

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