WHAT IS A BETTING EXCHANGE?: A betting exchange acts as an agent to allow individuals to place bets with one another, charging a commission for its services. Suppose you wanted to have a bit of a bet with your friend on the performance of the favourite in the first race at Ascot. You think the horse will win, your friend thinks it will lose. You each stake £50. The horse wins and you collect £100. The Horse loses and your friend collects £100. The bet is made at evens. A betting exchange allows you to do this except with strangers.

DIFFERENT ODDS: Unlike a traditional bookmaker, the betting exchange does not decide the prices of the horses in a race. Instead, the individuals who are betting do. If you only want to bet £25 and your friend or opponent wants to bet £50, then you are betting at 2/1. If you were placing the bet with a betting exchange you would basically indicate that you wanted to make a 2/1 bet on a particular horse and therefore need someone to make an opposite bet of 1/2. As soon as someone agrees to match your bet, it is made.

ADVANTAGES: The odds availaible with a betting exchange are around 17 to 20 per cent better than those offered by bookmakers. This is because bookies factor in a profit on every book that they make in order to cover their overheads and to make a profit. Since you are betting against an individual on a betting exchange, this does not apply. The odds are decided by what other people are prepared to risk. Since they are only betting on one horse, they do not need to make a profit on all horses running, as a bookie has to.

DISADVANTAGES: Big Bets cannot always be placed. Bets are limited to the stakes of the players betting. A traditional bookmaker is able to take most high stake bets but with a betting exchange you limited by what the other players want to bet.