They're so popular these days that I am sure that most people will have heard of a betting exchange.
Betting on horses via betting exchanges has completely changed the way punters place their bets, but why should you consider using one? Betting exchanges burst on to the scene in the late 1990s to much skepticism to begin with, it has to be said.
Punters were wondering what this new breed of bookmaker was all about.
A betting exchange is simply a different type of bookmaker that gives punters the opportunity to bet against other punters who have a different opinion regarding a horse race for example.
Let's Explain The Difference In A Bit More Detail Of course when you're betting on horses with a traditional bookie, you place your bet with the aim of beating the bookie, be it at your local betting shop or an on-course bookmaker.
If your horse is successful then you win money directly form that bookmaker making you happy and the bookmaker not so happy.
Betting exchanges however, are a bit different.
What they do is pit punter against punter so that if you like the look of a horse to win a race, but another punter doesn't like the look of that horse, then you can effectively go head-to-head.
So in fact, you would be betting that horse wins the race whereas the other punter would be betting that the horse does not win, also called 'laying'.
I'll explain the difference between the two later on in this article.
Whether that horse wins or not, someone is going to win some money.
If the horse ends up winning the race then you would take money off the punter would thought that the horse wouldn't win, but if the horse fails to win then you would pay your counterpart.
Why Laying A Horse To Lose Has Become So Popular This is perhaps the one area which most clearly separates betting with a traditional bookmaker from betting on horses through a betting exchange.
Traditionally, all we as punters have been able to do is back a horse to win or to be placed.
Now that's all changed.
Betting on a horse to win or to be placed does basically work in the same way whether you use a conventional bookmaker or a betting exchange.
Simply put, you put your money on your horse and if it wins or is placed then you will receive some money back for your bet.
However, where betting exchanges have changed the playing field is by offering you the punter the opportunity to select a horse that you feel will not win it's given race.
So what this entitles you to do is to look for a horse that you think will not win its race, and place what is known as a 'lay' bet.
Let's use an example.
You're looking through the racing section in your newspaper and you notice that a horse cannot possibly win its race.
You decide that you want to place a lay bet on this horse, and so what you are doing is in a sense offering odds to other punters who think that the horse will in fact win.
Of course, if your horse fails to you will take the backer's stake from him, but if the horse does win the race, then you must pay out.
Why Use Betting Exchanges As Opposed To Conventional Bookmakers? I'll now explain what I believe to be the key benefits of using a betting exchange.
I'll be giving you my 'lucky' seven reasons for betting on horses using betting exchanges over the course of two articles.
The first three reasons are listed below: Betting Exchanges Generally Offer Better Odds To Punters A bit of a no-brainer this I suppose.
As a punter, getting the best possible price is crucial.
Even a minute increase in price can enable you to improve your long term profits significantly.
Traditional bookmakers have upped their game a little by offering slightly better prices than they have previously, but because of the way they operate they will never be able to directly compete with betting exchanges.
This is because at the end of the day they are a bookmaker and they have to make money through a difference in odds - what they're prepared to offer you versus what they think the market value is.
Betting through the exchanges is very different as there is no longer a middle man involved.
Betting exchanges make their money by taking a small commission on each successful bet that is placed.
Basically if you win, so do they and so they perceived as more friendly towards the punter.
Betting exchanges will also enable you to ask for the odds that you want.
Can you imagine the reaction you would get if you strolled up to an on-course bookie and asked for a much more favourable price (for you) on a particular horse? This is the difference, as betting exchanges are all about punter versus punter, so as long as there's someone out there willing to oppose your views, you can get the bet that you want.
Winning And Losing Horses Mean You Win We have of course already touched on the subject of laying a horse to lose but this is just another reason why punters are leaning more and more towards betting on the betting exchanges.
In a sense they allow you to play the role of the bookmaker (as this is what they do - they oppose your bet), therefore giving you the opportunity to bet that a particular horse will not win its race.
Betting Exchanges Won't Close Your Account If You're Too Successful If you've read any of my previous articles or you're familiar with my horse racing tipster service then you'll know that I'm a firm believer in managing your money effectively.
A betting exchange allows you to do this perfectly as they would never dream of closing your account purely because you were pocketing lots of money.
The reason betting exchanges are more than happy for you to continue winning is they of course make a small commission from your winning bets; unlike a conventional bookie where you're eating in their profits.
So these are my first three reasons why betting on horses using betting exchanges is important for a punter to succeed.
I will complete the 'lucky' seven reasons and cover the remaining four reasons in a separate article.