If you haven’t heard of betting exchanges by now you must have been living on another planet for the last seven years - and the chances are it’s cost you an arm and a leg!
Betting exchanges are quite a recent phenomenon, but in a short space of time they have revolutionized the way we bet and no golf punter who is serious about making money should be betting without them. At the time of writing, there are three exchanges operating in the UK - Betfair, Betdaq and WBX. Of these, Betfair were the pioneers and they are by far the largest (with the greatest liquidity) so I shall refer to them in the below article. However, as with all forms of betting, it pays to shop around for value, so don't restrict yourself to one exchange - open accounts with them all.
What is it then?
Quite simply, Betfair is the world’s largest betting exchange, enabling punters to choose their own odds and bet against each other, even after an event has started. This has big implications for golf bettors - but more of that later. Because of the absence of traditional bookmakers margins, prices are often much better compared to the rest of the marketplace (around 20% better), and winners at odds of 1000 are possible.
This comes at a cost in the form of commission, which is set at 5% of the net winnings (although it is possible to get this down to as low as 2%, depending on how much you bet), but this is a small price to pay in return for bigger odds.
It’s not rocket science
The first thing you notice when you start to bet on Betfair are the decimal odds, as opposed to the more traditional fractional odds offered by bookmakers.
These can take some getting used to but they are often easier to calculate. For example, if you have £100 on a 8/11 chance with William Hill, many people would struggle to work it out. But the same bet with Betfair would be £100 at 1.27, and you don’t have to be a genius to work out that the returns would be £127. If you see something trading at 5 in the ‘back’ column at Betfair, it is a 4/1 chance (to convert exchange decimal odds into 'normal' odds, you subtract 1 from the figure), similarly 6 is 5/1, and so on.
You call the shots
In the old days before exchanges, golf punters would have taken what was being offered by the high street bookmakers and hoped for the best, but those days are well and truly over. Through the use of sophisticated technology, Betfair allows punters to bet at odds set and requested by other punters rather than by a bookmaker. Punters can both 'Back' (bet on a selection to win) and 'Lay' (bet on a selection to lose, i.e., back an outcome not happening) their selections. But you don’t have to accept the odds on offer, you can set your own odds.
For example, you fancy Tiger to win the Masters. He’s a 5/2 shot with the likes of Ladbrokes and William Hill, but is available at 4.00 (3/1) on Betfair. It’s blindingly obvious where you’re going to place your bet, but why not ask for slightly bigger odds, say 4.25 (9/4)? Providing that there is someone out with an opposing view who is prepared to lay you at that price, your bet will be ‘matched’. It works the other way too. You think Tiger will have one of his rare losing weeks so you go to lay him on Betfair, but you consider his ‘lay’ price, say 2.00 (Evens), to be too big. Rather than lay him at that price, you ask for smaller odds, say 1.91 (10/11). There are no hard and fast rules here, but in my experience and providing you’re not greedy, your bet will be matched.
Lock in a profit, sit back, enjoy
For golf bettors, one of the main selling points of betting exchanges is the ability to take a profit (or minimize a loss) at any stage of the tournament from the first tee-off to the final putt. We have all sat and suffered while a golfer we have backed pre-tournament at 50/1 has blown a winning chance with a barrage of bogeys down the final stretch of holes.
With Betfair, there is no excuse for not guaranteeing a profit. For example, that golfer you have had a tenner on at 50/1 might be an even money chance (2.00) on Betfair with a few holes to play. As all golf punters know, anything can happen in golf (and it usually does!), so why not hedge your bet and lay £250 at that price. That way, you can sit back and relax safe in the knowledge that you’re ensured a tidy profit of £250 whatever happens. The very least you should do is ensure a no-lose position, i.e., lay your tenner off at even money.
It can’t get any worse, can it?
If you need any more convincing why you should always hedge out and lay seemingly guaranteed winners, take poor Robert Karlsson for example. The 2007 UBS Hong Kong Open was his for the taking after playing 71 holes of almost flawless golf (hit 1.1 on Betfair) but he blew it with a double-bogey at the last. And you don’t have to search too hard for similar stories.
Phil Mickelson was trading at 1.06 before hitting the roof of the hospitality tent with his tee-shot on the 18th in the 2006 US Open. Retief Goosen was backed at a low of 1.6 to win the Wachovia Championship in the same year when tied for the lead with seven holes to play, but spare a thought for those who backed him at 1.01 to finish in the top-five. The ‘Goose’ was in third place, two shots clear of the golfer in 4th, only to take a quintuple-bogey nine which dropped him form third to tied-10th. It pays to expect the unexpected in golf!
It’s all about common sense really
Of course, you are not going to turn into a successful punter overnight by abandoning traditional bookmakers and setting yourself up on the exchanges. However, because of the better odds and trading opportunities on offer, the likelihood is that you will give yourself a far better chance of winning than ever before. I’ll wager good money that those who use the exchanges as part of their betting armoury tend to win more than those who don’t, providing you take a common sense approach - don’t over-react, be selective, only bet with what you can afford to lose and, most important of all, do your homework.
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