We think it’s fair to say that betting exchanges have revolutionised how the betting industry works. The ability to both back and lay a bet gives totally flexibility with pretty much all the usual markets that you would see from a traditional bookmaker. This means that you are able to lock in money much more effectively.
What’s also interesting is that a huge number of fixed odds bookmakers use betting exchanges when they need to shed some liability on certain markets. In fact, if you head down to the races, nearly all bookmakers will be logged in to somewhere like Betfair adjusting odds and backing/laying where they need to in order to “green up” their trackside book.
But, one of the most frequently asked questions is: should you be using a betting exchange over a fixed odds bookmaker, and does the exchange offer better odds overall when betting on football?
If you listen to the marketing spiel that most exchanges churn out they will say that they are always better, but in reality this isn’t always the case and there will be times where the fixed odds bookie still reigns supreme.
Throughout this article we are going to put them both through their paces and we will use real-world examples to see which is the better option.
Commission
Before we go too far through this article, we wanted to bring up the subject of commission. For those that don’t know, a betting exchange is where you bet peer-to-peer. This means that you are betting against other punters who are also using the exchange, and not against the brand itself.
The exchange earns money on these bets by taking a commission on all winning bets. The standard rate is around 5%, but you can find lower than that if you dig around. For example, if you won £100 then you would have to pay 5% commission, which is £5, meaning that you would get £95 back.
As you are going to find out, the commission can play a big role here, given that margins can be tight in some cases. We will keep referencing back to this throughout.
Odds Comparison
The best way to check who has the better odds is by simply comparing a bunch and seeing what comes up. We are going to run the odds as the best industry price for a selection of Premier League games at the start of the season.
The best price will be taken from a large number of fixed odds bookies for each match, and then compared with the best odds we can find at a betting exchange. We will also then remove the 5% commission from the bet and show the adjusted odds value. We will run this for home win, draw, and away win markets.
Here are our results:
Home wins
| Match | Exchange price | -5% Commission | Fixed Odds | Best Price |
|---|---|---|---|---|
| Liverpool v Norwich | 1.16 | 1.11 | 1.16 | Fixed Odds |
| West Ham v Man City | 13.3 | 12.63 | 13 | Fixed Odds |
| Bournemouth v Sheff United | 1.96 | 1.86 | 1.96 | Fixed Odds |
| Burnley v Southampton | 2.74 | 2.6 | 2.73 | Fixed Odds |
| Crystal Palace v Everton | 3.2 | 3.03 | 3.1 | Fixed Odds |
| Watford v Brighton | 1.98 | 1.88 | 1.95 | Fixed Odds |
| Tottenham v Aston Villa | 1.32 | 1.25 | 1.31 | Fixed Odds |
| Leicester V Wolves | 2.32 | 2.20 | 2.3 | Fixed Odds |
| Newcastle v Arsenal | 5.0 | 4.75 | 4.85 | Fixed Odds |
| Man United v Chelsea | 2.26 | 2.11 | 2.21 | Fixed Odds |
Away wins
| Match | Exchange price | -5% Commission | Fixed Odds | Best Price |
|---|---|---|---|---|
| Liverpool v Norwich | 25.0 | 23.75 | 23.00 | Exchange |
| West Ham v Man City | 1.27 | 1.21 | 1.27 | Fixed Odds |
| Bournemouth v Sheff United | 4.14 | 3.94 | 4.15 | Fixed Odds |
| Burnley v Southampton | 2.9 | 2.75 | 2.82 | Exchange |
| Crystal Palace v Everton | 2.56 | 2.48 | 2.5 | Fixed Odds |
| Watford v Brighton | 4.7 | 4.46 | 4.6 | Fixed Odds |
| Tottenham v Aston Villa | 11.3 | 10.83 | 12 | Fixed Odds |
| Leicester V Wolves | 3.4 | 3.23 | 3.52 | Fixed Odds |
| Newcastle v Arsenal | 1.83 | 1.74 | 1.8 | Fixed Odds |
| Man United v Chelsea | 3.6 | 3.42 | 3.6 | Fixed Odds |
Draw
| Match | Exchange price | -5% Commission | Fixed Odds | Best Price |
|---|---|---|---|---|
| Liverpool v Norwich | 9.62 | 9.14 | 9.0 | Exchange |
| West Ham v Man City | 6.88 | 6.54 | 6.5 | Exchange |
| Bournemouth v Sheff United | 3.8 | 3.61 | 3.7 | Fixed Odds |
| Burnley v Southampton | 3.35 | 3.18 | 3.32 | Fixed Odds |
| Crystal Palace v Everton | 3.4 | 3.23 | 3.4 | Fixed Odds |
| Watford v Brighton | 3.54 | 3.36 | 3.5 | Fixed Odds |
| Tottenham v Aston Villa | 6 | 5.7 | 5.8 | Fixed Odds |
| Leicester V Wolves | 3.3 | 3.13 | 3.38 | Fixed Odds |
| Newcastle v Arsenal | 3.95 | 3.75 | 3.95 | Fixed Odds |
| Man United v Chelsea | 3.45 | 3.28 | 3.45 | Fixed Odds |
There’s quite a lot of data there, so let’s try and break this down into more manageable chunks so that we can come to a sound conclusion.
- Number of bets = 30
- Number of exchange best prices before commission = 19 (63%)
- Number of exchange best prices after commission = 4 (13%)
- Number of fixed odds best prices before commission = 4 (13%)
- Number of fixed odds best prices after commission = 26 (87%)
Overall you would have to say that if you shop around the for best possible fixed odds price with each of these selections, then you are going to be getting a better price with the fixed odds bookmakers compared to the betting exchange. There were 24 fixed odds bookies that we took prices from compared with just 4 betting exchanges, but this is not really under our control as there aren’t many betting exchanges out there.
We will also add that more often than not there were just 1 or 2 fixed odds bookies that were better priced, even after commission, and if you were to take the best price versus industry average it’s likely the betting exchange would have come out on top.
The commission is what kills the betting exchange. As you can see, before commission they offered the best price in 63% of the matches that we tested. If you were glancing to see the odds of one compared with the other, then you would think that the exchange comes out on top, but the commission brings it back down to earth and effects the odds quite severely.
It’s worth pointing out that you can get lower commission than 5%. There are a number of exchanges that take 2% as standard, and some take less on a promotional basis, but if you are going with the biggest exchange which is Betfair, then you will probably be paying 5% on your winnings in return for using the busiest exchange. You can actually pay less commission at Betfair but that is for another article.
How Does the Exchange Compare with Fixed Odds Offers?
The industry is full of offers designed to plump up your bets and entice bettors to use that specific bookmaker. Some are more lucrative than others, but given that you just don’t get these on the exchange, do these offers make fixed betting even more lucrative?
One of the offers that we are going to look at is Betfred’s Double Delight. This is where you back the first goalscorer in a match and if they go on to score the second goal as well, Betfred will double the odds.
There’s a game in the Championship between Huddersfield and Derby that we are going to look at. Let’s take a look at the odds from both the exchange and Betfred. We’ve already taken into account the 5% commission on the exchange.
| Goalscorer | Betfred Price | Exchange Price | Best Price |
|---|---|---|---|
| Karlan Ahearne-Grant | 4.5 | 5.7 | Exchange |
| Steve Mounie | 5.0 | 6.3 | Exchange |
| Aaron Mooy | 6.5 | 9.4 | Exchange |
| Josh Koroma | 6.5 | 8.0 | Exchange |
As you can see, from this market the exchange absolutely wipes the floor with the prices from Betfred. As an individual bet, it’s a no brainer and you take the exchange price every time.
The question that you need to ask, is what is the likelihood that the player you backed will go on to score 2 or more goals? If you think that they are able to do this, then you have to take the hit in the first place with the lower Betfred price to potentially get double that price should your man score a second, and treble that price if they score a third.
If you were betting on a centre back for example, then it’s unlikely that they are going to score two goals in a match so you would likely be better off taking the larger odds at the betting exchange and bank on the 1 goal. If you have backed the team’s star striker who has been on red hot form, however, it would be tough to back against them getting a 2nd after scoring a 1st. This is where you would have to take the Betfred price over the exchange in the hope they get that second goal and double your odds.
Conclusion
It’s been interesting to work through real-time numbers with both exchanges and fixed odds bets, and this is what we have concluded:
1) For more mainstream markets you are going to be hard pressed to find better odds (after commission) than with the best priced fixed odds bookmakers out there. If you are willing to shop around and manage multiple betting accounts then this is the route to go.
2) For less mainstream markets like first goalscorer, the exchange really starts to come into its own. Markets can be quite random and prices all over the place as liquidity is less, which means it’s erratic. This is good for the punter and it’s here where the bargains and great prices are. If you look at the Aaron Mooy price above you see a huge difference, almost half as much again better odds.
3) Commission is the key factor here. The Exchange holds its own and even beats lots of fixed price bets, but when the commission is applied they start to struggle. If you can find relief on commission or lower rates then you will be able to get some really good deals.
4) Exchanges aren’t always the amazing price beaters that they are marketed to be. They have their place, but like all bookies, some are better priced than others. Are they an exclusive alternative to fixed odds bookmakers? No. Can they be used to good effect, like a lot of bookmakers, to work as part of an arsenal of betting sites that the punter should be using? Absolutely.