Betfair Exchange Minimum Stake Reduced From £2 To £1
The Betfair Exchange is the biggest and longest running sports betting exchange, established in 2000 with just shy of a trillion bets matched since it started. Exchange betting is known for providing better odds in general compared to fixed odds sports books and more longer term betting value for punters.
Betfair and other exchanges have, however, struggled to get many mainstream bettors engaged in the product and are hoping that dropping the minimum bet on the exchange from £2 to £1 across all products will help. The new lower minimum stake will apply immediately to both back and lay markers.
Exchanges work in the same way as fixed odds sports books when backing a bet. You find the market you want to back, the odds you want to take and then set your stake. Up to now that stake needed to be £2 or more but now customers can stake as little as £1.
The difference between an exchange and a fixed odds sportsbook is you are not betting against the bookmaker. Instead, you are betting against other peers, who offer odds for others to back. This is known as laying. If you lay a bet you are acting as your own micro-bookie, you choose the odds you want to offer and a liability (the amount you are prepared to pay out at those odds if the bet wins). If you lay a bet and the selection you have laid loses then you win, if you back a bet and the selection you back wins you win.
It is the laying part of the process that seems to be the biggest hurdle in persuading people to make the leap over to exchange betting, despite the better odds people can get in general. You do not, however, need to lay bets to use an exchange, you can just back bets as you would with a normal bookie, the only difference being you are betting against another person that laid that bet rather than the bookie itself.
Markets have liquidity, this means you can bet at specific odds up to the maximum liquidity of the market. Biggers sports and events have higher liquidity in general. Bets need to be matched between someone who wants to back a market at certain odds and someone who wants to lay that market at those odds.
The reason exchanges provide better value is there is no set margin built into the odds as is the case with fixed-odds sportsbooks. Instead people lay odds based on their own assessments of probabilities and this largely means markets are priced more fairly and are much closer to the true odds of an outcome.
The exchange itself simply charges a commission on winning bets and so they don’t really care what the odds are for any given market as there is no risk to them, in any matched bet someone has to win and someone has to lose and they are always guaranteed to get their commission. Still, commission rates are a lot lower, on average, than the profit margins built in by conventional bookies and over time you can get much better value betting on exchanges.
Many casual bettors like to place £1 stakes and this is part of the thinking behind Betfair’s decision to lower the minimum stake to £1. It also sets them apart from other exchanges, BETDAQ in particular who have just been sold by Ladbrokes back to their original owner and are looking to ramp up their competition with Betfair. It is possible BETDAQ will follow in due course.
The lower stake level is also more in line with modern responsible gambling expectations. Providing the option to bet £1 instead of a minimum of £2 naturally means low stakes punters that like to bet £1 each time can take advantage without feeling pressured to meet the £2 minimum.
For more about Betfair see our full review or you can visit the Betfair Exchange below:
