Betting
Exchanges
A person to person
gambling website who acts as a broker between parties
for the placement of bets is termed as a betting
exchange. It carries a similar concept like that of a
stock exchange or a futures exchange. But in this case
of betting exchange the commodity being traded is a bet,
rather than a stock or futures contract. Fixed odds
gambling are most prevalent type of betting on a betting
exchange. But these betting exchanges do have their
limitations. They are not suited to unrestrict multiple
parlay betting. Exchanges offer accumulators of their
own content management construction and these are
limited in number.
History of betting exchanges
The UK website Flutter.com
first brought to the public this very new innovative
concept in May 2000 in person-to-person betting form.
This is followed closely by UK-based Betfair in June
2000. A pure exchange model was embraced by Betfair.
This model is one Flutter later adopted and even
improved upon in places. But the first-mover advantage
proved decisive for Betfair. Flutter’s supporters were
content to broker a merger which left Betfair the
dominant partner by a reported ratio of 84:16 despite of
Flutter being managed to climb to a reported 30% market
share. Flutter's customers were transferred to Betfair's
system after the merger. This was later upgraded to
embrace some of Flutter's functionality. Betfair
controls a reported 90% of global exchange activity
today as it went from strength to strength.
Functioning of exchanges
Most of the betting
exchanges thrive on liquidity and customers tend to
focus on the exchange where they are confident their bet
can be paired up with a matching counter bet. Breaking
with British tradition, there is use of decimal odds
instead of fractional i.e, traditional odds because they
are more popular globally. Some of other betting
exchanges allow customers to use fractional odds if they
prefer. Money is charged to a commission by the betting
exchange which is calculated as a percentage of net
winnings for each customer on each event, or market.
Gamblers have found these sites a boon as earlier there
betting activities have traditionally been restricted by
bookmakers. As gamblers are now able to place bets of a
size unrestricted by the exchange. The only exception as
per restriction is that one or more opposing customers
need to be willing match their bets. Also the offers
available on a
betting exchange are usually better than those
offered by bookmakers in spite of the commission
charged.
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