Betfair: it’s quite surprising that many punters still don’t know exactly how to use it or even have an account.
For any serious punter, a Betfair account is a no-brainer. It gives you the opportunity to access huge worldwide betting pools on most racing and sports markets.
We’re going to run you through what Betfair is and how it works, starting with the basics.
- What is Betfair?
- How does Betfair work?
- The matching process
- Lay Betting
- Commission
- Betfair Starting Price
- Betfair trading
What is Betfair?
Betfair is the world’s largest betting exchange, and the only exchange that operates in Australia.
A betting exchange is not a traditional bookmaker, which takes bets from punters and pays out to winners. A betting exchange instead merely hosts bets between punters.
How does Betfair work?
When placing a bet on the Betfair Exchange, you have the option to either Back or Lay your selection.
Backing is a bet in the more familiar sense: you’re betting on your selection to win, and you collect your winnings if it does.
Laying is the opposite: you’re betting against the selection winning, and you collect if it doesn’t win. It’s really what a traditional bookmaker does: he wins your stake when your selection fails to salute.
Think of it like any bet you might have placed with a mate about, for example, a game of footy. All Betfair does is host that same thing on a grand scale, connecting punters across the world who are opposing each other on a wager.
Get started with the Betfair Exchange by clicking here. It’s a great tool for making profits.
The matching process
Ffor a bet to take place, there must be two punters on either side of the wager who agree on the odds and the stake. That’s called matching: a bet is locked in when the back and lay side match.
Check out a sample race market:
The cells in blue represent the Back side of the market. Those in pink are the Lay side.
The large numbers in each cell are the available odds for each horse.
For now, we’ll just focus on the Back side of the market: betting on your selection to win. The odds system is straightforward… the displayed odds are the same format as you see with any traditional bookmaker.
The market shows the best prices available to be matched in the blue cells: for example, the current best price for The Exchequer (Horse #3) is $2.72.
Then, working toward the left, it shows the next best available: again for The Exchequer, this is $2.70, then $2.60.
The smaller numbers below each price shows the amount currently available to be matched at that price.
So how does this work?
The queue
Whenever a bet is entered into Betfair, it’s placed into a queue for matching.
Obviously, everybody wants the best price. So the best, unmatched price offered goes to the front of the queue.
As soon as there’s a punter willing to back the selection at that price, the funds are matched and the bet is placed.
Look at The Exchequer again. There’s $39 available to be matched at $2.72. As soon as a backer comes along and places a stake of at least $39 at odds of $2.72 (or less), their bet will be matched with that, and it’ll disappear from the market. The next best available price is $2.70, so that’ll become the best available price until it, in turn, is matched.
Or, if a layer puts up a higher price again (for example, say, $2.80), it will go to the front of the queue as the best price available to backers..
This process continues until all possible matches are made.
Get started with the Betfair Exchange by clicking here. It’s a great tool for making profits.
The lay side is just the opposite side of the bet.. The pink cell is the best (ie, the lowest) available odds to lay that selection, along with the amount available to be matched.
The first punter in a market enters his stake at his desired odds, and the first person to lay those odds on the other side matches the bet, and it’s locked in.
The best odds placed (and the volume) are always the first at the front of queue, and will be the first matched. The market then works it’s way through the unmatched odds, continually matching wherever there’s available funds, at the same odds, on both sides.
Can I choose my own odds?
So you can take the odds that are on offer. But can you choose better odds?
Absolutely.
But unless they get matched, you won’t get on.
For example, though the best available price on The Exchequer is $2.72, I may not want to back it at less than $3.00. I can enter my stake and set the odds to $3.00, and leave it as such. In the above market, it’ll remain unmatched, and be a long way down the queue: all amounts at prices lower than $3.00 would first have to be matched.
What if my bet doesn’t get matched?
You have three options when this happens:
- Leave the bet unmatched, and wait for somebody to come along and match it at your odds. If the bet remains unmatched when the event closes, your bet will be cancelled.
- Change your odds: you can do this on an unmatched bet – adjust it to lower odds that will be matched.
- Take SP (racing bets only): this takes any unmatched amounts and bets them in the Betfair SP (starting price) market. We’ll explore the SP market in greater detail later, but in short: it’s similar (in effect) to taking a tote bet in that weight of money determines the price.
Your bet status
So when you place a bet, your betslip will show one of the following:
Matched Your bet has been matched and finalised – you’re on!
Unmatched Your bet has not been matched at your odds: it’ll sit in the queue until it is. If it isn’t matched when the market closes, the bet is simply void and your funds returned.
Partially Matched This is just a mix of the two above, which occurs when the volume available is such that a portion of your bet is matched, and a portion isn’t.
On any unmatched funds, you can choose to adjust your odds in order to bring them closer to the current best odds and thus make them more likely to be matched.
The volume in any market depends on its popularity and how many people are betting on it. So the volume in high profile events like English Premier League soccer matches, or big races on the national or international stage, is huge. It’s less so for a Tuesday maiden at Swan Hill.
Lay Betting
If there’s one concept that’s foreign to new users of Betfair, it’s lay betting.
As we’ve covered, on Betfair you’re betting against other punters who are taking the opposite side of the wager. All Betfair does is facilitate the transaction.
So when you back a horse to win, there needs to be somebody else backing it to not win. That’s lay betting.
Just remember with lay betting: it’s the opposite of backing, so you need to flip everything on it’s head.
An easy way to think of it is you’re playing the role of traditional bookmaker: you take a stake off the punter backing the horse. If it wins, you pay them out at the agreed odds. If it loses, you keep their stake.
For example, you might lay a $10 stake on a runner, at odds of $5.50.
Your liability is $45; that’s what you owe the backer should the horse salute. At odds of $5.50, they collect $55: your $45 payout, plus the return of their $10 stake. Simple.
If the horse gets beaten, like you thought it would, you collect the $10 stake from the backer.
Let’s look at the same example market we’ve been using…
Looking again at The Exchequer (Horse #3), we see that the best lay price currently available is $3.
Again, with lay betting you flip everything on it’s head. Obviously a lower price is better, because it means your liability is lower in the event that the horse wins and you lose the bet and have to pay out.
The market displays this by ranking the prices in the reverse order to what it does for backing: $3 is the best available, followed by $3.45 and then $4.20.
If you were to lay a $10 stake on The Exchequer at the odds of $3, the bet will cost you $20 (your liability). You’re betting $20 to win $10.
When backing a horse, you want to bet at value: when it’s over the odds. “Value” when lay betting is horses that are under the odds: you can bet at a lower price than the horse’s true chances.
So lay betting may be a foreign concept to what you’re used to, but once you get your head around it it’s really quite simple. Backing a horse “not to win” is certainly a different experience… one that might even give you a little empathy for what it’s like for a bookie to watch to a race!
You can read more information about Lay Betting right here.
Commission
Betfair haven’t actually set up this worldwide market and gone around matching everybody’s bets just because they’re good blokes!
Get started with the Betfair Exchange by clicking here. It’s a great tool for making profits.
Betfair makes money off all bets, but they’re not a traditional bookmaker, so they don’t do it in the same way.
They do this by charging a commission on all profits on a market. Whoever makes a profit – the backer or the layer – pays the commission. Your commission charge is a percentage of any profit you make on a market. On most markets worldwide it’s 5% of your profit, however on others it’s higher due to license fees they have to pay sport or racing bodies.
And yes, you guessed it, that includes Aussie racing! We typically pay higher commission rates than other markets around the world. Particularly on our racing.
You can see the commission rates for each type of Australian racing right here, on the Betfair Hub.
You aren’t charged commission on the total collect, only on the profit. And there’s no commission on losing bets – the winner pays that!
Betfair Starting Price
Punters will be familiar with the two main betting types offered by bookmakers on racing: fixed-odds and tote betting.
As we’ve already explored, the Betfair exchange offers an attractive and dynamic fixed-odds option.
But what of tote betting?
Betfair’s answer to this is the SP (starting price) market.
The BSP (Betfair Starting Price) is a true market price: backers and layers enter their stake for their horse as desired, with the price simply calculated by the weight of money on either side. Of course, this means the price is moving all the way up until the race jumps, as money enters either side of the market for each runner.
Winners are paid out at the final starting price, with Betfair deducting commission from the winnings in the same way as exchange betting.
There’s plenty more information about Betfair SP right here.
Betfair trading
Trading on Betfair is extremely popular across the world, given how easy it is to bet both sides of a result. The aim here is to lock in a profit (no matter what the result) by trading the prices as they move.
Let’s go with a very basic example. An upcoming footy game has one side paying $1.77, and the other $2.05.
Now obviously, you can back both sides as much as you like: you can’t lock in a profit at those prices.
But what about when the money comes and the prices move?
Let’s say, for example, you initially backed the outsider at the $2.05 opening quote.
A mountain of money comes for them over the next few days which almost reverses the prices: your team is now is into $1.80, with the former favourite’s blown out to $2.02.
You’re now free to back the other team, and you’ve got both at above even money: no matter the outcome of the game, you’ve made a profit. Too easy!
Of course, that theoretical example is extremely unlikely to play out, chiefly because bookmakers (most of the time) put a lot of work into their opening markets and don’t get them that far wrong.
In-play trading
Where something like that is much more likely to occur is during a match. In-play markets can fluctuate wildly during a game. A single moment or short run of dominance can vastly impact one team’s chances and see their odds move hugely: think a goal (or even two in quick succession) in soccer, or a batting collapse that sees a cricket team lose a number of wickets in just a couple of overs.
This is where the traders usually operate. Their goal is not so much to predict the ultimate outcome of a match, but to predict which way the market could move. That way they can “lock in” a guaranteed financial outcome no matter what the result.
Traditional bookmakers will obviously despise this behaviour: where a punter locks in a profit, they’ve locked in a loss! So once again, this is where Betfair comes in.
Betfair actively promote a whole host of third-party programs and apps that make quick trading a whole lot simpler than if you’re doing it on the website. You can check them out here.
The problem in Australia? In-play online sports betting is illegal. Which means, unless you’re operating on an overseas computer (via a VPN or similar), you won’t be able to get on.
Trading racing
Turning our attention to racing, there are clear opportunities to effectively trade a market and lock in a profit on Betfair.
Racing odds can fluctuate heavily and quickly, especially during the lead-up to the race as money comes flying in thick and fast. This gives you the opportunity to create a “no-lose” situation.
Where Betfair assists hugely with this is the ability to lay horses – that is, bet on them not winning. If you only had the opportunity to back horses, you’ll be attempting to monitor the prices of every runner as it fluctuates. That’s unrealistic.
But with one back bet (betting to win) and one lay bet (betting to lose) on Betfair, if you’ve read the market accurately, you’ll have created a guaranteed profit for yourself whether the horse wins or loses.
The key is to back at a higher price than you lay.
For example, the runner in question may currently be paying $4.10. Back that with $100, and you’ll have a profit of $310 (collect of $410) should the horse win. Should it not win, you lose your $100.
If you can then lay that horse at a lower price than $4.10 – we’ll say $3.50 for example – you’ll create the “no-lose” situation. Lay $120 on that: if it loses, you’ll collect your $120. If it wins, you pay out $300.
Now add your bets together:
Horse wins: $310 profit (back bet) + $300 loss (lay bet) = $10 profit (less commission)
Horse loses: $100 loss (back bet) + $120 profit (lay bet) = $20 profit (less commission)
That’s a very simple example, but how it works in a basic sense. The bigger the gap between your back and lay prices, the more profit you can lock in.
Hopefully you’ve learnt a bit about what Betfair has to offer, and when you can use it to your advantage… it’s a fantastic platform that all punters can benefit from.
For further information, the Betfair Hub is a great source of help, betting articles and discussion.
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