Exchange and smart – why exchanges are often the best bet

WOULD you head off to the high street travel agent to book your holiday when you can do it yourself online for a much cheaper price? That's the question most punters – including those who bet in small stakes – should be asking themselves if they've never had a bet on the betting exchanges.

The reason is simple and it's why so many of us now use the internet without a second's thought to snap up bargain flights, hotel accommodation, football tickets and all manner of items – value for money.

Betting exchanges – and at the moment there are only two that matter, Betfair, the London-based world market leader, and its Dublin rival Betdaq – offer, on average, 20 per cent better prices than you can get with your high street bookmaker.

That's the equivalent of getting 6-1 about a 5-1 shot. So if you've put a tenner on the nose and your horse wins, that's £10 more in your pocket compared to your mate who's gone to the betting shop – enough to buy yourself a couple of pints to celebrate and him a couple of pints to help drown his sorrows!

You can try it yourself now. For instance, if you fancy Hedgehunter to repeat last year's victory in the Grand National, log on to www.betfair.com and you will see, assuming the prices haven't changed since this article was written, that he's available in the 'back' column at 13.0 – that's 12-1 to you or I (to convert exchange decimal odds into 'normal' odds, you subtract 1 from the figure. So if a horse is priced up at 5.5, that's 4 1/2-1, in other words 9-2).

Yet the best price you can get with any of the major bookmakers about Hedgehunter winning this year's National is 10-1. In fact, with the two biggest firms, he's as low as 8-1 and 9-1.

A word of warning, though. Usual ante-post betting rules apply to the Grand National up to the week of the race, so if you were to back Hedgehunter now – with a bookie or a betting exchange – you would lose your money if he doesn't run.

However, similar price differences – and much more lucrative ones – frequently occur on the day of any given race. And that's when the value really adds up as there is a lot more money – or 'liquidity' – floating around the exchanges, especially on Saturdays and during the big midweek meetings such as the Cheltenham Festival and Royal Ascot.

Here are a couple of examples, from different ends of the price spectrum, based on personal experience:

I backed Mixed Blessing, the Kieren Fallon-ridden winner of last year's Princess Margaret Stakes at Newbury, at just over 43-1 on the exchanges 45 minutes before the start of the race. The best price available with the big bookies at that time was 25-1, the eventual SP. Hurricane Run, another Fallon winner, was backed for the Arc at 3.2-1 when the top bookie odds were 5-2.

The main reason why the odds are invariably better on the exchanges is that they make their money by taking a commission on winning bets – between two and five per cent, depending on how much custom you do with them – and, being internet-based, they don't have the expensive overheads of high street bookies.

The commission is a relatively small price for punters to pay in return for better prices – using the above examples, even after the deductions had been made, the Mixed Blessing winnings worked out at just over 40-1 and the Hurricane Run payout at 3-1.

And unlike bookmakers, whose profits depend on punters as a whole losing, all the exchanges rely on is turnover, so there are no price restrictions.

The minimum stake is £2 and while traditional bookies remain the best option for multiple bets such as doubles, trebles, accumulators and yankees, the exchanges offer a range of markets including laying – where you can act like a bookmaker and lay a horse you don't fancy – and betting-in-running.

To place a bet you have to open an account – this usually takes only a few minutes and can be done online or over the phone – into which you transfer funds, preferably using a bank account debit card. You can only bet with what's in your exchange account and you should never bet more than you can afford.

For some punters of course, nothing quite beats the thrill or satisfaction of being paid out in readies, be it in the betting shop or on the racetrack. And both those venues offer a social buzz that you can't get from sitting in front of a computer.

But there's nothing stopping you combining the two and, if it's pure value you want from your betting, then the exchanges really ought to be part of your punting life.

A version of this article, by Gary Nutting, first appeared in the Sunday Mirror www.sundaymirror.co.uk on February 19 2006.

An enlightened punter’s tale

Fed up with getting the knock-back from the bookmakers? Tired of their lame excuses and unreasonable price restrictions? Here a successful professional gambler explains why he thinks all punters, especially those who take their betting seriously, should have a betting exchange account.

IN the good old days (Extel commentaries, Sundays off...) the punter picked the horse, the bookmaker laid it, and the bookmaker bought a Rolls-Royce. The Millennium, however, brought us a gem in the shape of (no, not the Dome) the betting exchange.

Pioneered by Betfair and Betdaq, the exchanges have revolutionised the bookmaker/punter battle. They offered the punter, for the first time, the opportunity to be the bookmaker too. If you didn't fancy the favourite but were fed up backing the 'wrong' alternative, here was your chance. You too could lay the favourite and have the rest of the field running for you. The bookmaker was no longer a rare fortunate creature – we all could be him. But that wasn't the only plus for the punter.

Exchanges, like all good markets, offer efficiency which in punter-speak translates into better prices for backers. On average, exchange prices are up to 20 per cent better for the punter than those offered by the bookies. In return, the exchange gets a commission (between two and five per cent) based on the punter's winnings – a small price to pay for an all-round better service.

And what is best of all – the exchange doesn't care if you win or lose. So there is no moaning from the bookie if you do happen to hit the jackpot. All the exchange wants is action – winners and losers are greeted alike. Welcome to punting Utopia!

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