No book on punting these days can exclude reference to betting exchanges with Betfair being the most well known. The idea of betting exchanges is that you are wagering your opinion against someone else’s opinion. You can, in the one race, bet several horses to win and some other horses to lose. In other words you are able to play both punter and bookmaker at the same time if you wish.

At present no additional betting exchanges are operating in Australia but it will come. Australians can legally use Betfair for everything except betting in the run via the internet.

Australia has passed a law that it is illegal to bet on Australian events while they are being run except for phone betting. These laws will be superseded, hopefully sooner rather than later.

You can see in the print screen below left, that if you want to back Advent Heir you can have $21 at $15.50, $10 at $15 and $150 at $14. On the other side, the lay side, someone wants to back Advent Heir at $100 for a $7 bet and at $200 for a $20 bet. If you were to back the $21 at $15.5 then the next person would only be able to get $15 unless another person wishing to lay (risk) this horse offers more.

If you want to take a risk at 100 and thought the horse was no chance unless all the other horses fell over you could make $7 by accepting the challenge. You can see at the top of the Lay side a percentage of 91.6%. This means that if all these prices were accepted, you could not fail to make money. Then again, looking at the back side the market is showing 123.7% which is a dead set loss. Closer to the event you will find that it all settles down and the market will sit as low as 102%.

To open an account with Betfair they require you to provide a full 100 point identification, the same as for Bank accounts.

So what does the betting exchange do?

Principally, the betting exchange merely holds each persons money until the event has been run. At this time, the exchange pays the winner less a fee of 5% for holding the bet. The loser simply loses their bet and there is no fee. It is important to take the winning fee into account when deciding whether the price on offer is good value. One of the other risks with Betting exchange betting is that you do not always know if your bet is going to be taken up, especially if you are betting late. One of our regulars is the type who would ask for 100/1 just in case. He has sometimes ended up having to take a price elsewhere and then found that someone had taken him up at the last moment. Then he had ended up with twice the amount he intended to bet on that horse. At times though the horse has won and he is miles in front.

Another of our clients has been watching for when the favourite is one of our bottom rated horses. On one day, he successfully risked 14 favourites on Betfair and only three won.
 
A very profitable day resulted.

Austote is not a betting exchange but you used to be able to bet against a favourite on this TAB. With Austote one horse in each race was selected and you could bet a price which was not set as it would depend on how many people took the bet.

In essence you are betting this horse to lose. As an example, Aussie Humour at Bendigo paid $1.85 for the win.

Had the horse lost the losing dividend was $2.10. In the next race the favourite was $2.55 to win but only $1.65 to lose. The horse lost.

In the GTX print screen below, you can see that our second rated horse Prima Primum won and paid between $72 and $64 on the three mainland TABs. The on course price was at 25/1 making it $26.

*Please Note: AUSTOTE is no longer in operation