Sporting Exchange Ltd launched a betting exchange platform called Betfair on Oaks Day (June 200) and this was to change the face of betting on sport forever.

Prior to this innovation punters would have to use traditional bookmakers to place bets on sporting outcomes at the odds that the firms would offer. One of the major problems with the bookies is they don’t like winners as they act quickly to limit or close down successful punters, plus they were able to hide behind all kind of house rules.

A well known and frustrating one is the palpable error, this is where the bookmaker can void your bet because of an error they have made on the odds. In this article it’s not our place to give an opinion on whether such a rule is right or wrong, but it does lead us in nicely to the differences in a betting exchange to traditional bookmakers.

Betfair allows punters bet against each other, punters can set the odds and there are no limits on how much you can wager in any market. The Betfair platform holds the money until the outcome is known, but with many similarities to tradional financial exchanges, a simple bet is just the start of your options.

It’s because of the number of options you have when using the markets, it’s no wonder punters get confused to what Betfair is?

Even Betfair struggle explain the betting exchange concept

In 2011 the advert above was banned by the Advertising Standard Authority because it was misleading.

In this ad Betfair claimed that you could win bigger by cutting out the middleman, but what the failed to mention is that they take a commission (scaling down from 5%) on every winning position. So the reality is that by holding your money to outcome of the event is known, they act as an intermediary (or middleman!) until the bet is settled and they have taken their cut.

So what is Betfair?

It’s quite difficult to sum what a betting exchange (Betfair) is in a few words, but here goes…….

“Betfair offers a free market and act as a no-risk bookmaker in allowing punters to set their own prices and bet against other punters instead of with a bookmaker. They make their money by taking a commission (between 2-5%) on all winning bets rather than building in a profit margin. As a result punters can obtain slightly better prices using Betfair in the same way as they would bet with a traditional bookmaker.”

Having a bet on Betfair is just start of your journey

Over the next few pages of this category we will be explaining all you need to know about getting started using Betfair and we’ll start with how to open an account on Betfair with a promotional code to claim your free bet.