SportsInsights.com Article --
Sports Betting Exchanges Review (March 2007)
Over the years, Sports Insights has given our readers insight and suggestions into the best sportsbooks.
Nowadays, it appears that sports betting exchanges are gaining traction
in the sports betting industry. In this article, we give
an update on sports betting exchanges and have compiled the "inside scoop" on some of the larger sports
betting exchanges. The information on this site is for entertainment and
educational purposes only. Use of this information in violation
of any federal, state, or local laws is prohibited.
Sports Betting Exchanges
Sports betting exchange are gaining in popularity
and "user friendliness." In past years, sports bettors
were worried about liquidity or the fact that some betting exchanges
were "hard to use." Nowadays, most sports
betting exchanges have the "look" of a sportsbook. In addition,
the lines and pricing are great. In many cases, you can
find better odds and lines at the sports betting exchanges than at the low-vig
sportsbooks! Here are some advantages of
the betting exchanges:
- Liquidity has improved greatly at some betting exchanges.
You will normally see relatively large amounts of liquidity
at better prices at the exchanges than at most sportsbooks.
Sometimes, you may find only small "bids" offered on the
betting exchanges -- but at good prices.
- Note that exchange liquidity and pricing often improves
as game time approaches.
- Fees vary widely at the betting exchanges. They may range
from 0% to 5% (and more) on winning bets. These fees
are often separate from the actual transaction (and vig) --
so you need to consider these fees when you enter into any
sports
betting exchange transaction.
- One big plus about sports betting exchanges is that you are
dealing with other sports bettors. As a result, you
won't be banned; you won't be switched to "sharp" or
"square" lines.
And here are some disadvantages:
- Currently, many betting exchanges do not offer "Second Half" lines on many
sports. Offerings on "Totals" in college hoops and
other less-popular markets are also sparse.
- Liquidity for "smaller games" is sometimes limited.
- If the line moves suddenly, the betting exchange may not create
a new market (at the new line) immediately. This means
you will either have to go to a sportsbook or pay the
adjusted vig.
Value and Liquidity
Betting exchanges look like they will be "the wave of the
future." Why pay -110 vig when you can deal with a fellow
sports bettor and get -103, +100, perhaps even +105??!! As
sports bettors become more informed shoppers, an increasing
number of players will migrate to the betting exchanges. This will
lead to increased liquidity, improved pricing for players -- and a
self-fulfilling cycle of increased business for the betting exchanges
(even better pricing for bettors, and so on). We believe
that the movement to sports betting exchanges will snowball.
One important point to note is that you can use sports betting exchanges
in a variety of ways. Some players will shop the
lines offered (called "offers") on the betting exchanges and
then "buy up an offer." If the pricing isn't great, the
player might just use their regular sportsbook. Other players will put out
bids and try to see if other players will accept their offer.
In either case, it's a great way to
shop around for the best
price.
Matchbook
Matchbook is one of the largest and best sports betting exchanges.
Matchbook benefited mightily when Pinnacle Sports and Mansion
retreated from the US market.
Matchbook, which was already one of the largest sports betting exchanges
in the industry, is now positioned to be one of the largest
players in the entire industry. Indeed, it appears that
the bid-ask spreads at Matchbook have tightened tremendously (as
in HUGE value for Matchbook members). Matchbook is
associated with highly-rated book WSEX, so they
appear to be very solid.
- Commissions are 2% on winning plays. Thus, odds of
-103 are roughly equivalent to -105.
- Good liquidity and good lines.
- For an average sports investor, if you price your plays
around, Matchbook will get a large percentage of your plays.
- Does not offer Totals on many College Hoops games.
- Particularly good, tight, spreads for NHL plays.
- When there are many games in a sport, the website layout is not
particularly efficient. There are multiple pages so
that you have to click to the correct page to find your
game.
Mansion
Mansion is another good sports betting exchange, with some of the
lowest fees available. They recently pulled out of
the US market but are still a good operation for non-US players.
- Commissions for SELLERS are 0.5% on winning plays.
Thus, if you take plays that are listed (and are thus, a
BUYER), you would pay NO commissions. Thus, odds of
-105 are really -105.
- Overall pricing, lines, and liquidity are similar to
Matchbook -- after factoring in the lower fee structure at
Mansion.
- Offers Totals on some College Basketball games.
- Nice layout for sports with busy days
(such as Saturday's for College Sports).
Tradesports
Over the years,
Tradesports has made a name for itself by
offering markets on events ranging from Sadam Hussein's capture,
to hurricane predictions, and politics. They offer markets
on almost anything people want -- including the stock market,
commodities, and of course: sports. Their markets continue
trading live during games in progress, but liquidity varies
depending on the popularity of the game and the availability of
Tradesport "market makers."
Note that Tradesports offers two kinds of trading platforms.
Historically, markets were traded at Tradesports in a "binary
fashion." That is, market "contracts" expired at either 0 or 100
(Contracts that expire at 100 are worth $10; 0 is worthless.)
To avoid "pushes," sporting events with point spreads are
normally moved to a half point line. Recently,
Tradesports created "Tradesports Express" (still in beta phase) which gives
players more of a traditional sportsbook feel instead of the
0-100 pricing.
Tradesports has good liquidity in the major
sports -- and good breadth of their offerings.
BetFair
BetFair, licensed and registered in the UK, is very popular
outside of the US (BetFair has never accepted US customers).
Their software is very well thought out and they offer some
interesting features including the "BetFair lab."
Another nice feature is that the software shows you the amount
of money that has been "matched" in any particular market.
BetFair offers a wide variety of markets including financial
markets, American sports (including halves, total), rugby and
soccer.
BetFair charges a commission (BetFair calls this your Market
Base Rate) on your winning bets based on your level of play.
Active members can earn discounts on this commission as high as
60%, with most players able to earn discounts in the 0% to 25%
range.
Old Sports Betting Exchange Article
Disclaimer
We do not guarantee that the trends and biases we’ve found will
continue to exist. It is impossible to predict the future. Any
serious academic research in the field of “market efficiencies”
recognizes that inefficiencies may disappear over time. Once
inefficiencies are discovered, it is only a matter of time
before the market corrects itself. We do not guarantee our data
is error-free. However, we’ve tried our best to make sure every
score and percentage is correct.