Your Guide to Sports Betting Exchanges
Sports betting exchanges offer a fresh approach, allowing you to set your own odds and bet against others. Intriguing? Wait until you read more in our guide!
🔑 Key Takeaways
- Explore the concept of peer-to-peer betting and understand how sports betting exchanges function
- Find the best sports betting exchange sites in the US
- Understand the legality of sports betting exchange platforms in the US
- Discover the pros and cons of betting exchanges and if they are right for you
What Is a Sports Betting Exchange?
A sports betting exchange, or a peer-to-peer betting site, allows you to place wagers not against a bookmaker, but against other bettors, making it different from your usual sportsbooks. This innovative approach to betting introduces two types of bettors: those who place ‘back’ bets and those who place ‘lay’ bets.
In a ‘back’ bet, you pick who you think will win, similar to traditional wagering.
Conversely, a ‘lay’ bet involves betting against a team or player winning, essentially taking the bookmaker’s role.
How Sports Betting Exchanges Work
Betting exchanges function as online marketplaces where bettors compete against each other.
The exchange facilitates bets and charges a small fee, typically much lower than the 5-10% commission taken by traditional sportsbooks. Unlike sportsbooks, which set fixed betting odds and only allow bets on outcomes, exchanges offer bettors the flexibility to propose and accept odds.
Example: In a match between Team A and Team B, if you ‘back’ Team A at odds of 2.5 with a $10 wager, you stand to win $25 if they prevail. Alternatively, a ‘lay’ bet against Team A for $10 means you win if they lose or draw, but pay out if they win.
These exchanges are particularly user-friendly, even for beginners. They simplify the betting process by displaying odds as percentages, which can demystify complex odds formats. For example:
- Odds of 52% mean that if you stake $52, you could win $100.
- Odds of 10% mean betting $10 could win you $100.
This percentage-based odds presentation helps new bettors understand potential returns easily and encourages varied betting strategies.
Pros and Cons of Using a Sports Betting Exchange
| Pros | Cons |
|---|---|
| Flexibility to bet both ways with ‘back’ and ‘lay’ bets | Challenges in finding matches in niche markets |
| Often better odds with lower fees | Can be confusing for newcomers |
| No imposed account limits | Fewer options for parlays and bonuses |
| No penalties for frequent wins | Commissions may reach up to 5% on winnings |
| Cost-effective with lower commissions | |
| Flexibility to set your own odds and stakes |
Key Features of Sports Betting Exchanges
Two important aspects of online sports betting exchanges are liquidity and commission rates. Let’s take a deeper look into each of them:
Market Liquidity
Market liquidity refers to how easily you can place bets and find opponents on an exchange. High liquidity means plenty of betting options and better odds, leading to a more competitive and enjoyable betting experience. It ensures users have smooth and varied wagering opportunities.
To improve liquidity, exchanges often reward frequent bettors, maintain consistent betting activity, and use auto-matching in less active markets.
Commission Rates
Commission rates are the fees betting exchanges charge on winning bets, usually between 1% and 5% of net winnings.
For example, a bettor winning $100 with a 2% commission pays a $2 fee, netting $98. Some exchanges may offer discounts or lower rates for frequent bettors, so it’s always wise to check the commission rate to understand your potential net winnings.
Top Betting Exchange Platforms in the USA
Let’s look at two popular sports exchanges for US players, in terms of platform security, and market reputation.
Prophet
Prophet Exchange is a sports exchange betting site where you bet against other people, not a sportsbook. They began in New Jersey in 2021 after joining Caesars Entertainment and are licensed by the New Jersey Division of Gaming Enforcement.
You can place live bets on Prophet Exchange, but not prop bets, teasers, or parlays for now. Presently, it’s only for bettors in New Jersey and Ohio.
My experience with the sports betting exchange:
I recently tried this platform’s app on my phone, and I have to say, it’s quite impressive. The app works well on both iOS and Android, so I had no trouble finding and downloading it from the app store.
The interface is user-friendly, and the overall experience of using the platform was smooth and enjoyable. It felt like a fresh take on sports betting.
→ Prophet Exchange is worth a try because it has smaller fees, no betting limits, and you can see both sides of a bet. Everything there is a two-way market, making it a good choice for betting.
Sporttrade
Sporttrade, started by Alex Kane in 2016, is a unique betting exchange in the US where you can trade sports bets like stocks, a concept already popular in Europe. It allows wagers based on the likelihood of a team or player’s win rather than traditional odds.
The platform, legal and operating with Bally in New Jersey and Colorado, is set to expand to other states in 2024. Additionally, Sporttrade received $36 million from investors, including Tom Wittman, a former Nasdaq Stock Exchange President.
My experience with the sports betting exchange:
I tried the app, and it’s great for a few reasons. You can trade bets at any time, not just at fixed cash-out times like other sportsbooks. You get a ‘gambling portfolio’ to watch your wagers’ value change in real-time, so you can sell when you want.
Furthermore, you can set your prices for bets. Plus, there’s no house edge since Sporttrade is an exchange, not a regular sportsbook, matching buyers and sellers at fair market prices.
→ Sporttrader Exchange has a lot to offer, and I’m really eager to see how Sporttrade does as it grows.
Crypto Sports Betting Exchanges
A crypto sports exchange can be interesting for a few reasons:
- Quick and Safe: Crypto transactions are usually fast and safe. They don’t have the delays or checks that normal payments do.
- Less Costly: Using crypto money often means lower fees than using credit cards or other payment ways. This saves money for both the betting exchange and the users.
- More Private: Cryptocurrency can be more private than usual methods where you have to share your bank details.
- Anyone Can Use It: Crypto isn’t concerned about country borders, so people from all over can use it at exchanges.
- Somewhat Anonymous: Some cryptos let you stay more anonymous than usual methods, but it’s hard to be completely anonymous when gambling online.
Exploring the Legality of Sports Betting Exchanges in the US
Betting exchanges are gradually emerging in the United States, with initial launches like Prophet and Sporttrade in New Jersey. Despite their promise, these exchanges face significant challenges due to the Federal Wire Act of 1961. This Act restricts the transmission of gambling information across state lines, meaning exchange operators must run separate exchanges in each state. Consequently, users in New Jersey can only bet against other New Jersey residents, limiting liquidity and market growth.
While P2P betting platforms like Prophet and Sporttrade have yet to capture significant market share, alternative peer-to-peer betting sites like Bro Throw, Bet Openly, and Bettor Edge are operating in a legal gray area, allowing users to connect across various states.
The potential growth of exchanges remains optimistic among price-sensitive bettors for markets like NFL point spreads. However, traditional sportsbooks continue to dominate in less liquid markets such as props and futures.
Overcoming hurdles from the Wire Act and existing lobbies will be key to future expansion and success of betting exchanges in the US.
So, Are You Going to Visit a Betting Exchange Tonight?
Understanding sports betting exchanges can open up new possibilities for your wagering strategy. If you feel confident and think they’re a good fit for your betting style, exploring a trusted exchange might be an exciting next step. Alternatively, the best online sports betting sites in the US offer a more traditional experience to place real money bets on your favorite teams and sports.