Simplified example for exchange betting
Let’s immerse in a London pub during the weekend. Men are sitting around the tables, drinking beer, watching a round of the Premiership on the TV screens on the walls. Actually we could see that anywhere around the world, the men drinking anything and watching any kind of sport. A couple of friends, for instance John and Greg, are sitting in the pub awaiting the beginning of the match between Arsenal and Aston villa. These two friends could have different names and could be waiting some other sport event.
John is an Arsenal's fan, he’s convinced in their victory and offers to Greg to bet on the final result of the match. He is ready to bet on Arsenal’s victory and asks whether Greg would accept his bet. Greg is not an Arsenal’s fan but since he has a knowledge of football he realizes that Arsenal is a favorite in this game. However, driven by his interest in sports, he decides to bet a small sum against Arsenal’s victory. In order for the bet to be fair the two friends agree on John betting £30 FOR Arsenal, and Greg- £10 AGAINST Arsenal.
There, they bet each other now! They also defined the amount of the bets and formed the odds. The ratio of the sum they both bet is 1:3 (1/3) which is also the odds in UK Format.
John bet £30 at odds of 1/3 on Arsenal’s victory;
Greg bet £10 at odds of 3/1 against Arsenal, or presented otherwise, he placed a bet on double chance (draw or Aston Villa’s victory).
After the match is over, the one who guessed the final result gets the overall sum of £40.
However, let’s not go out of this pub yet and try to make the distribution of the bets between the sport fans more complicated.
A match between Fulham and Stoke City is forthcoming. A Fulham’s fan, let’s assume that his name is Hank, calls out from the nearest table. So, Hank says that he is ready to bet £100 on Fulham’s victory and is looking for an opponent who will also bet £100. He is practically looking for even odds 1/1. John and Greg decide to take this bet together and each of them gives £50. Here, we have a deal again! Hank bets £100 on Fulham’s victory, John and Greg bet £100 against Fulham. However, there is a specification arousing from this situation… Despite the fact that all participants in this deal seem respectable, Hank hasn’t met John and Greg before. In order for them to be certain in the proper settlement of the winnings, they decide to leave the sum of £200 with the bartender who will give it to the winning party after the end of the game. There, now we have a referee of the deal!
Now, let’s introduce another important element in the relations. When the winning party takes the £200 from the bartender, it is only natural to leave him some money, for instance £5, as a treat. If such kind of bets occur on a regular basis, then this could become another job to the bartender. In order to perform the duties of a referee of the bets it is normal for him to get some part of the winnings not simply “as a treat” but as a payment for his service. So, we get to the concept of “a commission”. This is a specific amount of the winnings the referee gets from the winning party.
Let’s go on modifying our example. We already saw that Hank offered £100 which were matched by John and Greg, each of them offering £50. However, if Hank offers a larger sum, for instance £1,000, then the opportunity for other clients of the pub to join the bet with various sums arises. It is possible that there is no opponent for some of these £1,000 until the start of the game. Then, how would Hank’s opponents organize the collection of the bets? It seems only logical for Hank to leave the money with the bartender, as we already mentioned, he would be a referee of the bets. The bartender would inform the clients that there is an open bet of £1,000 on Fulham at odds of 1/1. Then, he would collect the money from the people who wish to take part in this bet, while keeping a list of them in order to avoid any misunderstandings. If there is a part of Hank’s money which has not be matched by his opponents, then it would be returned to him. After the end of the game, the bartender would pay out the winnings, while keeping his commission.
However, let’s keep on broadening the unusual activity of the bartender. It is possible that there aren’t enough bets matching Hank’s £1,000. It is also possible that he even wants to bet a larger sum or he chooses different betting options for his bet with the other clients of the pub. It is only practical then that, few days before the game, Hank goes to the pub to leave the bartender money and a list with the bets he wishes to place, as well as the odds for the different options. The bartender would have to give publicity to Hank’s offers, writing them down, let’s say, on a black board displaying it prominently. He will also have to write out orders to the other clients who place bets in order to match Hank’s offers. It is inevitable for the other clients to wish to make their own offers which will be written down on the board. And then… the board would be insufficient for all offers. In order to continue his activity, the bartender would have to get a computer and specific software. And then… the pub would become a betting exchange company!
This scenario sounds interesting and plausible, but why hasn’t it occurred in your pub yet? You are lucky! All things mentioned above do exist in an even more thorough and fascinating way! What is more, you can even do it in your favorite pub, but not with the bartender, but via your cell phone. It is necessary to choose your betting exchange company and open an account according to the specified order.
You will find there an abundance of betting options for all types of sports. Your bets will be matched by other players while you have the opportunity to choose the odds. The firm which maintains the exchange platform and organizes the activity will collect a small commission on your winnings.