What Is a Sports Betting Exchange?

Have you ever wondered if there’s more to betting than just picking a winning team at a sportsbook?

This article’s going to explore, what is a sports betting exchange? And, it’s simpler than it sounds.

Think of it like stepping into a place where you can set your own wagering odds and get the most value from your bets. It’s not just about placing a stake, but being part of a community where everyone is making the rules.

So, get ready to learn how to up your game, as we explain how to start using gambling exchanges to enhance your overall chances of successful wagers.

🔑 Key Takeaways

  • You’ll know all the reliable sports betting exchanges with the best opportunities.
  • Learn what all our selection elements are to make sure you spot the best betting exchanges.

The Fundamentals of Sports Betting Exchanges

A betting exchange is different from your usual sportsbook because you’re not placing wagers against the house but against other people like you. In an exchange, there are two types of bettors.

  1. One is the person who makes a ‘back’ bet. This is just like regular wagering — pick who you think will win and decide how much you want to bet. The other type is what makes exchanges special.
  2. The other person makes a ‘lay’ bet. This is like saying, “I’m betting that this team won’t win.”

Additionally, in keeping up with the times, many exchanges are making cryptocurrency payments available to their users because of its low fees, private transactions and security.

How Betting Exchanges Work?

These wagering marketplaces might seem a bit confusing if you’re used to regular sportsbooks, but they really open up new ways to win.

A sports betting exchange is where you bet against other bettors, not against a sportsbook. The exchange sets up the wagers and takes a little fee for it.

Unlike sportsbooks that can take anywhere between 5 -10% of your winnings, betting exchanges fees take much lower percentages.   

Another difference, between traditional sportsbooks and exchanges, you’re stuck with the odds they give and can only bet on who will win. On an exchange, you get to call the shots. Meaning, you can bet on something happening or against it.


For example: Let’s take a popular marketplace, this is one of the biggest betting exchanges.

In a football match between Team A and Team B, you might find the odds for Team A to win at 2.5 (or 3/2).

  1. If you ‘back’ Team A with $10, you could win $25 if they win. 
  2. Alternatively, you could ‘lay’ Team A, wagering $10 against them.

→ If Team A loses or draws, you win, but if they win, you pay out.

That’s how an exchange works. It pairs up folks who have different opinions and lets them bet against each other.

Advantages of Using a Betting Exchange 

There are pros and cons to sportsbooks and exchanges. Here, we’ll focus on the advantages of using the best sports betting exchange:

  • Bet Both Ways: You can wager on something happening (back) and against something happening (lay). It’s like buying and selling. At a regular sportsbook, you can only bet on things to happen.
  • Better Odds: Odds are often better than regular sportsbooks because there are no extra charges. 
  • Guarantee a Profit: You can place wagers on both outcomes of an event. This means you can bet in a way that guarantees you to make some money, reduce your risk, or cancel a wager you already made.
  • No Account Limits: Regular sportsbooks often limit how much you can bet based on your betting history or the market. In an exchange, there are no set limits. How much you can wager depends on how much money is in the market (liquidity).
  • Winners Welcome: These marketplaces are different because they don’t mind if you win a lot. Unlike sportsbooks, they won’t ban you for winning too much.
  • Commission: Wagering marketplaces charge a small fee for using their platform. They don’t add extra charges to the odds, so even with the commission, their odds can be really good.

As Rotorwire affirms, these exchanges are easy to use, especially for beginners. They make things simpler by showing the odds as percentages.

For example:

  • Odds of 52% mean that if you stake $52, you could win $100.
  • Odds of 10% mean betting $10 could win you $100.

This way of showing odds as percentages is really helpful for new bettors who might find regular odds confusing.

Key Features of Sports Betting Exchanges

Two important aspects of sports betting exchanges are liquidity and commission rates. In this section, we’ll explain what these are and why they matter for your overall experience.

Understanding Market Liquidity 

In these marketplaces, understanding liquidity is key. High liquidity means quick wagering and better odds. Low liquidity leads to fewer opponents and poorer odds.

The following table breaks down liquidity at betting marketplaces:

LiquidityExplanation
DefinitionLiquidity is about how easy it is to make bets and find someone to wager against on an exchange. When there’s lots of liquidity, there are many betting options available.
But if the liquidity is low, you might have fewer choices and not-so-good odds.
ImportanceHigh liquidity makes the exchange more competitive, leading to better and more accurate odds. It ensures a smoother experience with more choices for users.
Strategies to ImproveOffering rewards to frequent bettors.  Providing services to ensure consistent betting activity. Using auto-matching to facilitate bets even in less active markets.
Analyst InsightsMarket analysts emphasize the significance of liquidity for an exchange to function effectively. It enhances competitiveness and improves the quality of odds.

Here are some insights from market analysts regarding the importance of liquidity in these exchanges:

Having lots of liquidity is key for a betting exchange to work well. When there’s a lot of liquidity, the marketplace is more competitive. This means the odds of bets are better and more accurate because lots of people are wagering different amounts.

Commission Rates Explained 

Bookmakers set their own odds and include a profit margin, so they make money no matter what. But exchanges let users bet against each other and only charge a fee for winning bets.

The following table breaks down commission rates at betting exchanges:

Commission RatesExplanation
DefinitionCommission rates refer to the fees charged by betting exchanges on winning bets. Unlike traditional bookmakers, exchanges do not set odds but charge a percentage of winnings as their revenue.
CalculationCommission rate is typically between 1% and 5% of net winnings.  It is deducted from the amount won by the bettor.
Discounts and OffersSome exchanges may offer discounts or lower rates for frequent bettors.
ExamplesProphet Exchange charges a 2% fee on winnings.

For instance:
If a bettor wins $100, they will be charged $2, resulting in a net win of $98. Sporttrade applies a 2% fee on winnings, meaning a $200 win would incur a $4 fee, leaving the bettor with $196.

Commission rates might change based on the type of bet. Always check the commission rate before betting to know how much you could win after the fee.

Top Betting Exchange Platforms in The USA

Let’s look at two popular sports exchanges for US players, in terms of platform security, and market reputation.

Prophet 

Prophet Exchange is a sports exchange betting site where you bet against other people, not a sportsbook. They began in New Jersey in 2021 after joining Caesars Entertainment and are licensed by the New Jersey Division of Gaming Enforcement.

You can place live bets on Prophet Exchange, but not prop bets, teasers, or parlays for now. Presently, it’s only for bettors in New Jersey and Ohio.

My experience with the sport betting exchange:

I recently tried this platform’s app on my phone, and I have to say, it’s quite impressive. The app works well on both iOS and Android, so I had no trouble finding and downloading it from the app store.

The interface is user-friendly, and the overall experience of using the platform was smooth and enjoyable. It felt like a fresh take on sports betting.

→ Prophet Exchange is worth a try because it has smaller fees, no betting limits, and you can see both sides of a bet. Everything there is a two-way market, making it a good choice for betting. 

Sporttrade 

Sporttrade, started by Alex Kane in 2016, is a unique betting exchange in the US where you can trade sports bets like stocks, a concept already popular in Europe. It allows wagers based on the likelihood of a team or player’s win rather than traditional odds.

The platform, legal and operating with Bally in New Jersey and Colorado, is set to expand to other states in 2024. Additionally, Sporttrade received $36 million from investors, including Tom Wittman, a former Nasdaq Stock Exchange President.

My experience with the sport betting exchange:

I tried the app, and it’s great for a few reasons. You can trade bets at any time, not just at fixed cash-out times like other sportsbooks. You get a ‘gambling portfolio’ to watch your wagers’ value change in real-time, so you can sell when you want.

Furthermore, you can set your prices for bets. Plus, there’s no house edge since Sporttrade is an exchange, not a regular sportsbook, matching buyers and sellers at fair market prices.

Sporttrader Exchange has a lot to offer, and I’m really eager to see how Sporttrade does as it grows.

Crypto Sports Betting Exchanges

A crypto sports exchange can be interesting for a few reasons:

  • Quick and Safe: Crypto transactions are usually fast and safe. They don’t have the delays or checks that normal payments do.
  • Less Costly: Using crypto money often means lower fees than using credit cards or other payment ways. This saves money for both the betting exchange and the users.
  • More Private: Cryptocurrency can be more private than usual methods where you have to share your bank details.
  • Anyone Can Use It: Crypto isn’t concerned about country borders, so people from all over can use it at exchanges.
  • Somewhat Anonymous: Some cryptos let you stay more anonymous than usual methods, but it’s hard to be completely anonymous when gambling online.

Here’s what one expert had to say, Jason Shapiro, CEO of Sporttrade:

Blockchain technology allows for near-instantaneous settlement of bets, eliminating the waiting times associated with traditional banking systems.

Additionally, the decentralized nature of cryptocurrencies cuts out intermediaries, leading to lower transaction fees potentially for both users and the platform.

Betting Exchange’s Legalities and Regulations

The legal landscape of sports betting exchange sites in the USA is complex and constantly evolving. 

Sports Betting Exchange in the USA 

Learn about the rules for sports betting exchange USA sites. We’ll look at federal and state laws, challenges for exchanges, possible solutions, and things you need to know below:

  • PASPA, a law from 1992, banned most sports wagering but was overturned by the US Supreme Court in 2018.
  • States now deciding if they want to legalize sports bets and how to regulate it.
  • Over 30 states and Washington D.C. have legalized sports betting, and more are considering it.
  • There are many states that allow sports wagering through traditional sportsbooks but haven’t addressed marketplaces or exchanges.
  • Exchanges face uncertainty as existing regulations may not cover their unique model.
  • These platforms may need approval in each state where they operate.
  • Exchanges can emphasize features that meet existing regulations, like responsible gambling tools.
  • Industry stakeholders may advocate for regulations that address an exchanges’ specific model.
  • The legal situation may change, so always check official sources before using a betting exchange.

Most states that legalized sports betting have prioritized the model of licensed operators setting odds and taking bets directly from customers. 

Wagering exchanges, with their peer-to-peer structure, fall into a bit of a regulatory gray area in some jurisdictions.

Jessica Welton, Sports Betting Attorney

How to Choose a Reliable Sports Betting Exchange Software Provider 

Here’s a breakdown of key factors to consider when choosing a reliable sports betting exchange software provider:

  • Choose a provider with many sports and different types of bets.
  • Make sure the website or app is easy to use on computers and phones.
  • Look for features that help you make sure your bets are fair and easy to place.
  • Check for a platform that keeps your information safe and has ways to help you gamble responsibly.
  • Make sure the provider respects the rules, and is well-known.
  • Compare prices and how you can pay for bets.
  • Make sure the provider has great customer support with people who can help you if you have questions or problems.
  • Try out free versions to see if you like how they work.
  • Keep up with what’s new in the gambling world and pick what works best for you.

So, Are You Going to Visit a Betting Exchange Tonight? 

Discovering how to choose a reliable sports betting exchange ensures safety and usability, crucial for a smooth experience.

Use these tips to start playing at exchanges with diverse markets, user-friendly interfaces, and robust security for a better wagering experience.

Wondering how to enhance your overall gambling strategy even further? Check out our sports betting 101 guide.