A betting exchange is basically just another form of bookmaking where the individual behind the system offsets any risks through the use of technology. The overall effect is to make it appear as though the customers are betting between themselves, and in many ways it is similar to the stock exchange, which is also where it gets its name. Many individuals see these as nothing more than elaborate bidding sites where peer-to-peer gambling takes place, although it should more appropriately be termed many-to-many gambling, as the bets are never related specifically to one person or another, but instead are many bets being placed at the same time. It is most commonly believed that the individuals operating these betting sites are simply acting as a broker between the various parties placing bets, rather than acting like a traditional bookie, but the reality of the situation is that the bets are being accepted and offered simultaneously through the use of software. At the end of the day, the exchange operator is simply a person holding a bookmaker’s license, and there is no law against using software to handle the bets.

Sports betting with a betting exchange is generally related to fixed-odds gambling, although recently it has begun to expand into spread betting as well. While not traditionally considered betting sites, this understanding is changing over the years. It has caused some controversy because gamblers can now lay outcomes on the exchanges themselves, with companies like Ladbrokes and William Hill criticizing exchange systems, claiming that the ability to remain anonymous will eventually lead to corruption in traditional sports betting.

Apr 26 2010