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Exchange Wagering 101
HRN Original Blog:
Exchange Wagering 101

What Is So Great About Exchange Wagering?

So, what is so great about exchange wagering ?  Well, let me tell you a few things in this brief introduction to exchange wagering.
 
First of all, whenever a 'trade' on a betting exchange is made, just like in the stock market, there is a buyer and a seller which will be referred to here as a backer and a layer.  The backer is betting on a horse to win and the layer is betting on a horse to lose.  A trade is made when a backer and layer 'match' prices on the exchange and the price agreed upon at the time of the trade is then locked in.
 
What this does is give players so many more options getting involved in a race.  One can back and lay the same horse while perhaps locking up a profit if backing the horse at a higher price than laying the horse.  Sometimes, you can lay a horse on the exchange at a lower price than a horse will go off in the pari-mutuel market and one can use that as a hedge as well.
 
For many years, I have often heard at the track or at an OTB regarding a short-priced favorite or horses people just have a negative view on that they wish they could just bet against horses instead of figuring out who was going to win.  Exchange wagering finally gives players an opportunity to take advantage of negative views on individual horses.
 
While surely the takeout will be higher in the USA than 2%-5% which is taken out of winning wagers in the UK, with lower takeout, fluctuating odds, and occasional inefficient markets...backers can often times find much greater value (bigger odds) through exchange betting than they can find elsewhere.
 
Over the past few years, I have spent some time over in the UK and I greatly enjoyed playing the races via exchange wagering.  I look forward to it coming soon to our country and talking about it much more in this space in the weeks and months ahead.

 

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Older Comments about What Is So Great About Exchange Wagering?...

as a bettor what you want to see is a significant proportion of the win pool invested in OTHER horses than your own. With small fields that is impossible.
I agree, they should get more entries, especially for stakes races.
and then there are those who I saw get rolled in the parking lot........And it has gotten worse than all those years ago.....Why would ANYONE want to watch and wager on cards with HUGE fields of 5 or 6 horses. Woodbine still has fields of 14 here.
I could have a different level of acceptance, tv, since I live in a city, but that part of LA is certainly not anything nearly as horrible as the post- apocalyptic downtown LA.
If you want more crowds at the races at Hollywood Park, don't scare them off. Come visit Hollywood Park. It is very lovely. Bayakoa and Starlet this Saturday, Cash Call Futurity next weekend. Top dog Nonios' stablemates are in those races.
prarie is not the bad part of town. Well then all my relatives and friends, TO A MAN, have lied to me
The location of Hollywood Park is not in what I would call a scary neighborhood or a ghost town. I would recommend visiting that track to anyone.
Mary not having any substantial crowd to compare it to, you might get a skewed idea
It didn't look like a ghost town to me when I went there in November, or in November of 2010. Just one opinion.
Holly is a ghost towm in a pitiful part of town: Laker's left, most others left an area directly under the glide path to LAX.......Ghost town
Betfair pays a percentage of its profits to the racing industry. You will also find that Betfair, once it is operating, will be a prolific source of sponsorship for racing clubs. They already have the naming rights to Hollywood Park, and I would imagine that would have cost them a lot of money, which the horsemen (and women) would already be benefitting from. Exchange betting will significantly increase interest in racetrack betting, so I would argue that a smaller percentage of a much bigger pie will be a lot better for the industry than a large percentage of a diminishing pie, which is the current situation.
Of course the price will be better with a 5% takeout which would siphon $ from the parimutuel pools. So where's that leave the horsemen?
Exchange wagering is an infinite improvement on pari-mutuel. Tote betting is so frustrating, especially when the pool is small. You take what you think is a good value bet only to see the price smashed in the last few minutes to the jump. Exchange betting gives you a fixed price, and the odds are generally a lot fairer than you would get from a bookmaker. The market gravitates toward 100% as the cash flow builds up on a race and the odds constantly fluctuate, providing great opportunities for punters who have done their homework to lock in a value price on their selection. Those who choose to "lay" horses are actually playing a dangerous game because the mathematics of the market force them to give the "backers"a better price than they would get on the pari-mutuel. And as for jockeys choosing to run dead because they can bet against their own mount, that is really no different to how things have been anyway. If you're riding the favourite under the present system, there is nothing to stop you from dutching the next 2 or 3 horses in the market to bring off a heist. Crooks will always find a way to fleece the public no matter what system is in play. And there is no reason why the exchange operator would have any incentive to indulge in shady dealings because they make their money by charging a commission on winning bets. Betfair, the world's best known exchange normally charges about 5%, which is heck of a lot less than the pari-mutuel takeouts. There is another betting option that the exchange provides, and that is the opportunity to "trade". If you lay a horse when the odds are short and then wait for the odds to lengthen you can (if you stake appropriately) lock in a situation where you literally cannot lose on the race. In effect, you are betting on the likely change in the market rather than the outcome of the race. There are quite a lot of people on Betfair who make their living doing this. So, please America, hurry up and get on board the Exchange Betting revolution. The more money floating around the system, the better the exchange model works, and the U.S.A. is such an enormous market. Much too big to have it wasted on a pari-mutuel system where your chances of making a long-term profit are miniscule.
A HUGE advantage. Think of all the times you've heard, usually post race, that such and such a favorite was prepping for a future race or "a few works short". With exchange betting, someone equipped with this knowledge won't just be able to use it in handicapping the rest of the field but can lay against said horse with the uninformed.
and that advice comes from a successful bookie in England.
when selectively used, it gives a local, informed person, a HUGE andvantage/
Great read..what horsracing needs is simple,easy for the newcomer's were not getting the intersted like on -line poker.
It just might be the shot in the arm that horse racing needs. And as far as jockeys riding the favorite. Is there any reason to believe that the jocks in Great Britain are riding worse due to exchange wagering?
if this happens, it will be the end of horse racing, jockeys will rather ride the favorite than ride the winner people....
Are they going to allow in-race wagering as well? Also, is exchange wagering going to be available via other ADWs (twinspires, drfbets, etc.)?

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Exchange Wagering 101

Yes, I want exclusive tips to get ready for the exchange!
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Exchange Wagering was passed by the state of California in 2010 and could be implemented there as soon as May 2012.  

The advent of exchange wagering opens a whole new world of opportunities to US horseplayers and market traders. HorseRacingNation's Dave Gutfreund, who successfully played on Betfair's exchange for over 2 years while covering the races at Racing World TV in London, will blog each week to help prepare US players on what to expect as the exchange comes to town.  

Betfair is the world's leading exchange wagering provider, handling more than 7 million transactions per day.  Betfair is also the parent company of TVG.