Welcome back to the Betting Fundamentals series. In Part 01 and Part 02, we learned about bankroll management and staking plans. Today, we're going to take a look at the place that you will implement these fundamentals, the betting exchange.
What Is a Betting Exchange?
When most people think about gambling, they picture a traditional bookmaker within which a customer will place a bet against the house. If the customer wins, the bookmaker pays out. If the customer loses, the bookmaker keeps the customer's stake. Simple.
A betting exchange works slightly differently. Rather than placing bets against a bookmaker, an exchange allows its members to place bets against each other. In the case of the Scorum Betting platform, you will be betting against your fellow Scorum Bet users.
How Does a Betting Exchange Make Money?
It's very easy to understand how a traditional bookmaker makes money. If you place a bet with them and the bet loses, the bookmaker keeps your stake. A betting exchange operates differently, however, and simply provides users with a place to bet against each other.
Most betting exchanges, therefore, will make money by charging their users a commission fee on winnings. For example, if you won $10, you could automatically pay 5% ($0.50) of those winnings to the exchange as a commission charge. As there is always one winner in any given bet, the exchange earns a constant source of commission income from its userbase.
How Does the Scorum Betting Exchange Differ?
Unlike most betting exchanges, the Scorum Betting Exchange doesn't charge its userbase any commission. It is simply an extension of the Scorum platform so users can keep all of their winnings. As someone who has worked within the gambling sector for many years, I can't begin to explain how much of a big deal this is. I expect this aspect alone to drive a lot of bettors to the Scorum Betting Exchange over the years.
How Does a Betting Exchange Work?
When you make use of a traditional bookmaker, the only kind of bet you can make is known as a back bet.
When you place a back bet, you are betting on a certain outcome to win. For example, if I go to a bookmaker and believe Liverpool will win their next game, I could place a back bet of $10 on Liverpool to win. If Liverpool win the game, my bet also wins. If Liverpool don't win the game, my bet loses.
A betting exchange is different because you are able to place a lay bet, and this is something that you cannot do with a traditional bookmaker. When you place a lay bet, you are gambling on a selection to NOT WIN. If we don't think Liverpool will win their next game, we could place a lay bet on them. Therefore, we would win our lay bet if Liverpool did not win, and that includes both a loss or a draw.
When you use a traditional bookmaker to place a back bet on a selection to win, the bookmaker is actually placing a lay bet against you that the section will not win. As there is no bookmaker on a betting exchange, you will need to find another user to bet against.
For example, if you place a back bet of $10 on West Ham to win at odds of 10/1 with a potential profit of $100, you would need another user of the exchange to place a $100 lay bet on West Ham to not win at odds of 1/10 with a potential profit of $10.
What Are the Benefits of a Betting Exchange
When you place a bet with a bookmaker, the bookmaker is in charge throughout the whole process. They choose the available markets, the odds, the max amount you're allowed to bet on a certain outcome and control the payout.
A betting exchange allows users to bet on lots of different markets as long as there is another user willing to match your bet. The odds are generally more favourable on an exchange too because bookmakers do not offer what is known as the true odds of a selection. This is all part of the bookmaker profit process that an exchange doesn't need to concern itself with. With an exchange, as long as there is someone willing to match your bet, you can make use of odds that the bookmaker simply wouldn't offer you.
As mentioned above, the Scorum Bet Exchange has the major benefit of 0% commission for its user base, so you get to keep all of your winnings. You'll also benefit from rapid transaction speed and clarity throughout the process.