What is "Betfair" 

     In the good old days, whenever you wanted to place a bet on a football match, you had to use a sports bookmaker. A bookmaker, in fact, is a company, which places bets against your bets. If you wanted to place a bet that "Arsenal" would win over "Chelsea", the bookmaker would offer the odds (price), which, in its opinion, is against "Arsenal" win. For example, “Two against One” or “Six against One”. Thus, if the odds (price) were 2/1 (3.0) and you placed 10 £, you would win 20 £ + the returned starting bet (10 £) if "Arsenal" won the match. If the event didn’t happen, you would lose the placed bet (10 £).

    Although bookmakers still own the biggest share of the gambling market, a new market participant – "Betfair" – has come upon the stage.

     In a sense, "Betfair" (betting exchange) has revived the ancient gambling way when two people exchanged bets on some event. For example, Jānis thinks that "Skonto" is going to lose, but Juris thinks it’s going to win. They both decide on the amount of the bet and make a bet between themselves. "Betfair" is, in fact, a mediator between thousands of people such as Jānis and Juris. By betting on "Betfair", you make a bet on some event with another person or a group of people. You will never get to know these people, but then again you don’t need to know who they are. The only thing you should do is to determine the amount and the price you want to bet on.

     There are many companies active in the market today, but "Betfair" is the first and the largest betting exchange with the biggest turnover, liquidity and number of users.

How to place a simple bet on a win (Backing)

This is how the typical "Betfair" window looks like:

     The screen is divided into two parts. On the left side (blue colour), there is all information on “Back” bets. “Back” or “backing” means placing a bet that the team will win. On the right side (red colour) there is summarized information on “Lay” bets. "Lay" or "Laying" means placing a bet that the team will lose in the respective game. The colour square boxes show the odds available (the price) and the amount of money currently available.

     Let’s compare this information to the options offered by a usual bookmaker. If you want to simply bet that "Charlton" wins, you will check the respective teams in the blue square box. It shows that the available odds that "Charlton" wins are 1.5 and the available amount of money is 2201 EUR. If you are satisfied with the offered price (1.5), you can immediately place a bet of up to 2201 EUR. When you click on the blue "Charlton" box, a new window will appear:

     In this example, I have entered a 10 EUR bet and agreed to the offered price of 1.5. If my bet wins, I will gain 5 EUR (Your Profit) + the returned starting bet (10 EUR). Please remember that the first screen will show that the amount of 2201 EUR was available when the available price was 1.5. If I wanted to place 3000 EUR on that game for the available price, 2201 EUR would be accepted immediately and 779 EUR would stay in the system waiting for the moment when some other person would be ready to lay this amount, i.e. to bet against my selection. Such situations, however, are very rare, especially in football. Bets of tens of millions EUR are made on the Premier League, the Champions League and other important games.

How to place a simple bet on a loss (Laying)

     The biggest difference between a traditional bookmaker and "Betfair" is that now there is an opportunity to bet that the team will lose. This is called a “Lay” bet. If I wanted to bet that "Charlton" would lose this match, I would find all information on the available prices and the available amount of money on the right side (red colour) of the window. We can see that the amount of 1439 EUR is available against "Charlton" win and the price is 1.51.

     I could place a “Lay” bet of up to 1439 EUR with the available price of 1.51, and my bet would be accepted immediately. By clicking on the square box, a new window will appear:

     In this example, I have entered a 10 EUR bet that "Charlton" will lose this match. On the right side, we can choose between two options: "Payout" and "Liability". "Payout" stands for the amount of the money I will win if the event happens. "Liability" means the amount I will lose if the event doesn’t happen. In this example, I have chosen "Liability". Although my bet is 10 EUR, my potential loss will only be 5.10 EUR. In fact, the “Lay” bet is reverse to the usual bet. If we bet that "Charlton" will win, the potential amount we’ll gain will be 1.5 x the bet, whereas the person who have placed a “Lay” bet will lose the amount of 1.5 x our bet.

     So, by placing a “Lay” bet, you take over a bookmaker’s function and responsibility to pay a specific amount depending on a specific price. When placing a “Lay” bet, the maximum you can win is the amount of your bet (10 EUR in this example), and the loss will be calculated according to the available price (5.10 EUR in this example).

How to get better odds

     You don’t have to always accept the price specified in the blue or red square box. In most cases, it is possible to get the price, which is better than the offered one.

     The example shows that on both sides to the blue and red square boxes there are also other boxes with prices and available money. On "Charlton Back" row we can also see:

EUR 1878   @   1.48
EUR 2309   @   1.49

And on "Lay" side:

EUR 1379   @   1.52
EUR 82      @    1.53

     These figures show other people’s attempts to gain better odds (prices). People who wish to place a “Back” bet (backers) would like to get the highest price possible. At the same time, those who wish to place a “Lay” bet (layers) would like to get the lowest price possible in order to reduce their “liability” in case of loss.

     The blue and the red square boxes show the midpoint, i.e. the price, which is satisfactory for both parties involved.

    If there are more backers than layers, the price will lower, as there will be struggle for the available amount of money. If more people consider that "Charlton" doesn’t stand a chance of winning this game and wish to place a “Lay” bet, the price will increase, as struggle for the available amount of money will occur again. As in any free market situation, demand and supply determine everything.

     Thus, we can opt not to accept the offered price and request our own price. To do so, we should click on the blue square box and write in, for example, 1.6 and then wait until someone is ready to lay our bet.

"Betfair" commission rate

     As "Betfair" is only a mediator, it doesn’t matter to them if people win or lose. You will never experience a problem such as closing of accounts or setting ridiculous limits, which is very typical of traditional bookmakers. "Betfair" earns money by collecting a small commission for every completed transaction. The commission rate is from 5% to 2% depending on the player’s activity and market specification. Commission is paid only for the amount of money won. If you lose, commission will not be collected.

For more information on the opening of account and a 20 Ls bonus click here.