The rise of betting exchanges over the last decade has opened the punting world up to a sea of new systems, new ways to bet, and new profitable opportunities. But which is the best betting exchange?
I’ll guide you through the list and tell you who comes out on top!
I have just read surely the best article ever written about Betting Exchanges. Complete, serious, to the detail… All what you want to know about the different exchanges is here. Congrats @TVBBlog.https://t.co/BeZMd0d7zT
— Nishikori, Tennis PRO bettor (@nishikoripicks) October 19, 2020
First, if you don’t understand what a betting exchange is, read this full explanation by Betfair – What Is A Betting Exchange
Next, here is a little break-down by me, detailing why exchanges are underused and why you should add them to your betting portfolio if you can – Betting Exchanges: Why You Should Use Them (If You Can)
Now, best betting exchanges, here we go!
Best Betting Exchange Candidates
We’ve identified four big players in the betting exchange category. Honestly, it’s a shame that we only have four.
The truth is, it’s really hard to build a successful exchange from the ground up. To be a successful exchange you need LOTS of users, lots of liquidity. But, to get that liquidity you need to have the best exchange, which almost solely comes down to the amount of liquidity you have. People won’t use your exchange because not enough people are using your exchange…
You could easily describe the betting exchange landscape as just ‘Betfair and the stragglers’, but the competition isn’t made up of just Betfair wannabes; there are some legitimate arguments for each of these four exchanges. But first, let’s size them up.
Betfair hardly needs to be introduced, it still dominates the betting exchange market. The most recent data suggests that Betfair controls a whopping 90% of betting exchange activity worldwide.
Boasting 2000+ staff and 4 million+ users, Betfair really does have market control. They’ve been able to maintain comfortable market domination since their inception 20 years ago.
They’ve done this by being the first to do it well, grabbed the market, then held it. But they didn’t just steal an easy market, they’ve been constantly improving.
A much more aggressive marketing campaign has been in place since merging with the always entertaining, Paddy Power. But outside of the superficial, they also have a terrific education hub, statistical sporting predictions and analysis articles, and continue to provide value for both bettors and readers.
Betfair is an easy sell. The biggest and still ahead of the pack (for now).
Smarkets, who launched in 2008, have been making a big push in recent years.
They have done virtually everything right, starting with their interface. Smarkets is a joy to use, it is certainly bookmakeresque – personally, I like that.
When it comes to clarity, social media presence, and engagement with users – they match Betfair. You will find breakdowns of markets, insights into the Smarkets team, ethics statements, and clear betting exchange education.
Smarkets can be described as the ‘modern exchange’ – if they continue to push and maintain their public presence, their ascent to a true Betfair challenger could come quicker than expected.
Betdaq has been Betfairs only real challenger for a long time.
Betdaq reportedly controls 7% of betting exchange activity, which certainly seems small. But in context, knowing Betfair has somewhere in the range of 90% market share, 7% has really dwarfed other competitors. It is hard to track, but I would be surprised if they still had a 7% market share, unfortunately.
While a lack of innovation may hurt Betdaqs customer base, their functionality and value still keep them competitive.
Betdaq is also the most similar to Betfair in look and feel, on betdaq you get a long-term exchange that isn’t overly flashy but does what it does well and has done so for a sustained period.
Often used in conjunction with Betfair, it also has claims for superiority. We’ll get to that later.
You could be forgiven for thinking Matchbook was a normal bookmaker on first look.
Matchbook is building in their efforts to make exchange betting more accessible for your everyday punter. The layout is certainly intuitive and a welcome change from the standard business-like exchange interface.
They launched in 2004, but have really made their mark since being acquired in 2011 by a group of Financial Banking & UK sports investors including Brentford F.C owner Matthew Benham.
Matchbook is another who hopes to steal some of Betfair’s market, they are certainly in the race.
Betting Exchange Commissions
The commission you pay is the defining factor when picking an exchange. A couple of percent can be the difference between a great profitable system and a system that will bankrupt you.
It’s important to note, most of these exchanges really hide the finer details of their commission structure. When dealing with the most profitable bettors, the fine print essentially says ‘we can do what we want’. So I’ve sourced everything available, but there is certainly nuances in terms that we don’t have access to.
Betfair has come to the party! With Betfair’s competitors all offering sub 5% commissions and in most cases 2% as standard, they decided they had to match it, as a sort of insurance on their market domination. Just last year, 5% was the minimum at Betfair with small discounts for active users.
What we can see above is an option to forgo all rewards and promotions, in favour of a 2% commission. It would be my assumption that most bettors would happily take the basic deal.
So, barring a change, we have 2% commission at Betfair. Terrific.
Now for the caveats, Betfair reserve the right to adjust any individuals commission at will – this is generally applied to the top 0.5% of profitable users, there is a lack of clarity as to who qualifies for these commission changes, which is a shame. If forums are to be believed then the commission rate for that top echelon can be quite absurd – I’ll let you decide for yourself what to believe and read into that yourself, as there are no official rules.
The second caveat, there is no clarity about which countries the ‘Betfair Rewards Plan’ has been rolled out in. Some countries are known to be stuck with the old ‘Betfair Discount Points’ system, which calculates a commission discount based on your activity on the exchange – I don’t know anyone who found that rate to be consistent or significant.
Australia is one country that is known to be stuck with the old system, UK and Ireland are known to have moved onto the new system, here are them explaining the differing systems by country/state:
4.10 Customers in different countries/States will receive different discount rates (and, in certain countries, customers will not receive a discount rate). Customers should refer to emails and web messages from Betfair which set out their discount rate.
Intentionally vague, a bit disappointing.
The last known caveat is the differing base commission rates for different countries. We get a bit more clarity on this. Firstly, all Australasian markets (bet from anywhere around the world) use the old rewards system and also have differing commissions between sports and states, pictured below.
All based on the different charges and taxes Australian governments and sports commissions are charging them. Understandable.
Then we have different base commissions for countries, also due to different taxes and fees. The picture below seems incomplete and possibly outdated but it’s all they’ve given us:
Overall, Betfair is hard to define and judge when it comes to commission, simply due to the different rules, rewards systems and terms for different regions. BUT, if you have access to the 2% rate then you should absolutely take it, 2% is in line with other competing exchanges and is the best we have seen from Betfair in quite some time.
Oof, that was confusing, I’m exhausted.
A big thank-you to Smarkets for making it a little easier to find than Betfair.
Here is their breakdown of commissions, easily found on their website:
As the original 2% commission exchange, our Standard Tier of commission is 2% on net profits per market only.
In addition, we have two further tiers for the most active and profitable Smarkets users:
A 1% Pro Tier. Anyone who places more than 1500 bets or stakes more than £1m in a calendar month will have to opt in to the Pro Tier to continue trading on Smarkets.
A 3% Select Tier which is applied to a very small number of the most profitable Smarkets users who exceed £25,000 in net profit over the previous 12 calendar months.
At face value, this seems fair and generous. But, let’s break it down a bit more.
The 3% Select Tier is actually really good. Most exchanges charge higher rates to the most profitable of users, pegging that number at 3% is well below the average.
Now. The Pro Tier, this one is a tease. 1% obviously seems like a reward for using the exchange often, it is most certainly not.
Here is the fine print on the Pro Tier:
It’s important to note that these metrics are based on all bets placed, whether they are unmatched, partially matched or fully matched. The limits are based on the initial bet placement.
On all bets. On the surface, it still seems like it could work, and it can if you are only placing single bets on any one market. But many power users are placing multiple bets on one market and ‘locking in profit’ is their system, strategically trading the odds movements. If you are being charged for every winning, losing, or unmatched bet; rather than just the net profit across all bets in that market – it is virtually unusable for those Smarkets traders. Oh, and Pro Tier takes precedence over the Select Tier.
Overall, Smarkets have a great base commission and are great for some users. Mainly those who either bet under 1500 bets per month or power users who only place single bets on any given market. A good option in the right circumstances.
Betdaq doesn’t have a whole lot of information or explanation around their commission rates, but if they are to be taken at face value, their commission rates are:
21.2 BETDAQ charges a flat 2% commission fee to customers on all Exchange Net Market Winnings on the following sports; Horse Racing; Greyhound Racing; Football; Cricket and on all Exchange Virtuals markets (“Normal Commission Rate”).
21.3 BETDAQ charges a 0% commission rate on all other sports offered on the exchange (“0% Commission rate”)
Considering Betdaq have had quite a significant market share, maintaining commission rates this low (or non-existent) is superb for users.
It should be noted that they include a disclaimer reserving the right to adjust commission rates for heavy or commercial users. You can also see in the fine print of the 0% commission banner above, ‘Not available to API, or commission deal customers. Not applicable to Virtual products’. Which is all to be expected.
I had to dig a little bit, but I managed to find Matchbooks commission terms:
6.4 Matchbook customers located in the United Kingdom, Isle of Man, Channel Isles and Ireland shall be charged a 2% commission rate on net profits, all other customers shall be charged a 4% commission rate on net profits, as explained further in our FAQ at https://www.matchbook.com/page/faqs/netwinexplained/.
6.5 A Member who meets or exceeds the Thresholds (as defined below) may be charged one or a combination of the MB Rates which only apply to the Exchange and they are as follows:
Commission rate up to 3.5% per bet (“Transactional Rate”); or
Commission rate up to 5% of Gross Profit per market (“Market Commission Rate”); and/or
Revenue share commission rate up to 60% of Net Profits per calendar month (“Revenue Share”).
(which shall severally and jointly be referred to as the “MB Rates”).
6.6 The thresholds are as follows:
$1,000,000 (one million US Dollars) of Betting Volume; and/or
$20,000 (twenty thousand US Dollars) of Betting Profits
Personally, I think this takes the cake as the worst commission structure for users.
The base commissions outlaid are fairly standard, 2% or 4% depending on location. Fine, even good.
Now the bad. For power users a 3.5% transactional rate in some circumstances! That means on every bet, that is borderline unusable.
Or, 60% of net profit. Absurd.
These numbers can be applied after $20,000 USD profit, total. Not monthly profit but total net profit.
Quite poor. These terms came about in 2018, I assume it sent many profitable traders running. I’d suggest that Matchbook could work for recreational punters, but professional punters should tread carefully.
Which Betting Exchanges Work In My Country?
This has been equally as difficult as sourcing commission information. We have a combination of countries that outlaw exchanges, countries that only allow localised exchanges, some with betting licenses, some with vague or incomplete laws.
One note that I’ll add now, the US has incredibly confusing laws surrounding betting and exchanges, while Betfair has some kind of license in the state of Nevada, it is heavily hampered and does not allow for inter-state trading. Other exchanges are attempting to get licenses as laws shift, but for now, while it’s inconclusive, I’ll leave them out of this.
Okay, here we go. There are a lot of small details here, I’ll outlay what we have from the given information.
Betfair has been able to spread to regions that no other exchange has come close to.
Let’s start with the basics – Betfair is based in the UK and is available in every country that any of the below are available in.
What Betfair has been able to do is extend to some other countries as well.
Firstly, Australia. After a big battle, Betfair managed to get licensed in Tasmania and are now the only exchange available in Australia.
Then we have Spain, Italy, and Romania. All of these three countries are strictly prohibited from joining a worldwide betting exchange. So… Betfair got licensed individually in these countries and set up localised exchanges. They lack and significant liquidity, but they are there. These exchanges are located at betfair.es, betfair.it, and betfair.ro
They also have a Danish license and a Swedish license, it is unknown whether the other exchanges allow bettors from those countries.
It is again inconclusive, we don’t have exact details. But, what we know without questions is that Betfair caters to more countries than any other exchange.
Smarkets have a prohibited list, these countries may NOT bet with Smarkets:
Australia, France, Hong Kong, Switzerland, China, South Africa, Denmark, Czech Republic, Belgium, Turkey, the United States, Italy, Portugal, Russia, Belarus, Ukraine and Kazakhstan.
This is not to say you can bet with any country not included in this list, these are just the only countries where betting on Smarkets is overtly illegal and they are obliged to act independently in prohibiting users.
Thank-you to Betdaq for simply laying out the countries/jurisdictions where they operate:
Argentina, Curaçao, Ireland, Lichtenstein, New Zealand, Barbados, Ghana, Isle of Man, Luxembourg, Seychelles, Belarus, Gibraltar, Jersey, Malta, Tanzania, Croatia, Guernsey, Lebanon, Mauritius, United Kingdom.
Not a large list, but at least it’s clear.
After events like losing their license to bet in Australia, Spain losing all rights to be on exchanges, and other changes in the exchange landscape, Matchbook decided to hand over responsibility to the users, with this statement:
2.5 You are responsible for determining whether your access and/or use of the Website and/or the MB Services is compliant with applicable laws in your jurisdiction and you warrant, undertake and represent to us that gambling is not illegal in the jurisdiction where you reside.
Completely fair given the mess that is betting legislation on an international scale. Sadly, government websites are often just as unhelpful.
This one couldn’t be clearer. Betfair wins, it’s not even close.
If this were three years ago, I’d be saying Betdaq comes in second. But, no longer.
Smarkets has ascended to the second spot with terrific smarketing(Ha) campaigns and a heavy push in advertising their 2% commission.
Matchbook comes in a close third, and Betdaq has dropped to the last place in the liquidity stakes.
I truly believe Smarkets can continue to bridge the gap, no one will ever overtake Betfair, but the clear second spot is asking to be grabbed and Smarkets are in pole position right now.
I’m going to break this into two battles, one between the similar old school rivals in Betfair and Betdaq. Then one between the more bookmakeresque Smarkets and Matchbook.
In the first battle, Betfair wins. Neither has done much in the way of redesigning or simplifying their interface in many years. But Betfair has tutorials, better information, constant informative articles and advice, and it also operates a lot faster than Betdaq. This one was a no brainer.
Now the second battle, I’m giving this one to Smarkets. Smarkets have the most intuitive and clean interface of any exchange, they have comprehensive hubs for news, CEO updates, tutorials, and a heap more. Navigating is as simple as you could want and it just looks damn nice. Matchbook also has simple navigation and a good interface, but, Smarkets has them beat in each of those areas.
It’s still Betfair, I know – how boring.
Betfair frustrates me with intentional vagueness when it comes to commission, rewards by country, and country availability. But they still have the most liquidity and have just introduced a commission system that matches up with the best.
Smarkets is competitive but they were edged out for two reasons. Firstly, they still have less liquidity, obviously. Second, the Pro Tier. The Pro Tier will be something that many power users are forced into and for a lot of peoples betting systems, it will be an absolute killer. If you are not in the Pro Tier, they certainly have a case.
Betdaq has the best commission structure, but they have lost a lot of liquidity, and they come last when it comes to usability.
Matchbook is a hard one to place. Their commission structure for semi-successful punters can be unusable. The worst I’ve seen. But they have good usability and growing liquidity.
For me, it’s Betfair>Smarets>Betdaq>Matchbook
Best Betting Exchange: Conclusion
The laws surrounding betting exchanges can be frustrating, depending on where you live. And the exchanges themselves have a knack for being hard to extract information from when it comes to commission and country availability, I did my best.
What I do know is that there is a multitude of systems you can use on an exchange to make money. The growth of exchanges is a terrific thing for the whole betting industry and I hope this breakdown has helped you work out which exchange fits you best.
If you have any extra information surrounding your country, specific commissions or just finer details surrounding usability or liquidity, please reach out. We will add anything we can verify and hopefully make this a constantly updated hub for betting exchange information.
Happy (Value) Betting