Betting exchanges, for a variety of reasons, offer much better value than your average bookmaker, and thus they pose a large threat to the bookmaking industry. For practically any market, the sheer value of betting exchanges is normally much better than that offered by bookmakers, and generally the more popular the market, the more value there is to be obtained.

The reason for this increased value is that bets are always matched at the best price, leaving punters in competition with one another to take pole position as the best odds will appear at the forefront of all other available bets. It is vital for these punters to attract money by pricing according to the market – the loss of intermediaries allows them to name their own prices – without being overly generous.

An additional and very important advantage of betting exchanges is the ability to hedge your bets; for example, if you bet on Manchester City at 9.00 to defeat Manchester United and they score the first goal, betting exchanges that are running ‘in play’ will have the odds of Manchester City winning fall dramatically to 3.00, for example. Now, you can either lay against Manchester City, or bet on Manchester United at dramatically improved odds, or explore the options of a draw. There are certain methods of locking in profits, particularly in a two-horse race, but remember that it is essential for the cards to fall your way in the first instance to have any chance of securing a profit.

This, in a sense, is similar to in-running spread betting; betting overs initially, then unders once the spread has moved up. Coupon-based betting, on the other hand, does not allow you this opportunity; the odds are fixed, right up until the final whistle. Many punters are beginning to find that person-to-person betting is a very attractive alternative to fixed odds, pool and spread betting, and hence it poses a threat to bookmakers worldwide.

In-play betting is not available on every event, but if an event is televised to a relatively large audience, some in-play action is almost guaranteed. Spread betting sites can only afford to accept in-running bets for however many bookmakers they have available keeping a close eye on events. In-running spreads need to be completely up to date – for example, if a wicket falls in the cricket, a punter can bet unders and claim a nice packet should the person setting the spread be sleeping on the job.

Because of its threat to bookmakers, some betting exchanges are finding it difficult to obtain licences, and those that do are often clouded in controversy by bookmakers who are worried about their future. Betting exchanges claim that it will force the bookmakers to post more realistic odds, but by that reckoning it is still only the punters who are benefiting.