Exchange Betting

Exchange betting is a very recent concept in the UK, commencing in May 2000 with Flutter.com. Flutter were soon superseded by Betfair, who commenced trading in June 2000. The idea of exchange betting is a novel one, where gamblers don’t bet with bookmakers, but with each other.

There are two terms associated with exchange betting. These are ‘backing’ and ‘laying’. Backing means that the gambler expects the outcome to happen, whilst laying means that the gambler expects the outcome not to happen. An example of a lay bet might involve a horse race. If gambler A backs the favourite, gambler B might lay that bet, thus declaring that he/she expects any horse other than the favourite to win.

Traditionally a bookmaker would take the lay bet; however, with exchange betting it is now possible for a discerning gambler to take that bet. This has led to a small bit of controversy between traditional bookmakers and organisations such as Betfair and Betdaq. Bookmakers would argue that it is easier to fix the outcome of an event not happening than it is to fix the outcome of an event happening.