They're so popular these days that I am sure that most people will have heard of a betting exchange. Betting on horses via betting exchanges has completely changed the way punters place their bets, but why should you consider using one?

Betting exchanges burst on to the scene in the late 1990s to much skepticism to begin with, it has to be said. Punters were wondering what this new breed of bookmaker was all about. A betting exchange is simply a different type of bookmaker that gives punters the opportunity to bet against other punters who have a different opinion regarding a horse race for example.

Let's Explain The Difference In A Bit More Detail

Of course when you're betting on horses with a traditional bookie, you place your bet with the aim of beating the bookie, be it at your local betting shop or an on-course bookmaker. If your horse is successful then you win money directly form that bookmaker making you happy and the bookmaker not so happy.

Betting exchanges however, are a bit different. What they do is pit punter against punter so that if you like the look of a horse to win a race, but another punter doesn't like the look of that horse, then you can effectively go head-to-head. So in fact, you would be betting that horse wins the race whereas the other punter would be betting that the horse does not win, also called 'laying'. I'll explain the difference between the two later on in this article.

Whether that horse wins or not, someone is going to win some money. If the horse ends up winning the race then you would take money off the punter would thought sports betting the horse wouldn't win, but if the horse fails to win then you would pay your counterpart.

Why Laying A Horse To Lose Has Become So Popular

This is perhaps the one area which most clearly separates betting with a traditional bookmaker from betting on horses through a betting exchange.

Traditionally, all we as punters have been able to do is back a horse to win or to be placed. Now that's all changed. Betting on a horse to win or to be placed does basically work in the same way whether you use a conventional bookmaker or a betting exchange. Simply put, you put your money on your horse and if it wins or is placed then you will receive some money back for your bet.

However, where betting exchanges have changed the playing field is by offering you the punter the opportunity to select a horse that you feel will not win it's given race.

So what this entitles you to do is to look for a horse that you think will not win its race, and place what is known as a ‘lay’ bet. Let's use an example. You're looking through the racing section in your newspaper and you notice that a horse cannot possibly win its race. You decide that you want to place a lay bet on this horse, and so what you are doing is in a sense offering odds to other punters who think that the horse will in fact win.

Of course, if your horse fails to you will take the backer's stake from him, but if the horse does win the race, then you must pay out.