@tyKiwanuka
thank you very much for the detailed answer. We don't find very often people like you to give such good insights of exchanges and why and how to use it. Great attitude!
Just for info I am a risk averse bettor and I prefer pre match trading and I am still in learning phase. To be frank I have problems to find value bets so I am concentrating on pre match trades
IMHO this thread has no feedback or questions as most of the members here prefer the regular bookie and not exchanges.
I would be interested to understand the reasons as I prefer exchanges and sadly exchanges are not available for every country
I googled Exbet and I saw they are not yet open. I found Brokerstorms which is offering exchanges powered by Betfair with BTC deposits and withdrawals. Though not sure if they can be trusted. Are you familiar with Brokerstorm and their exchanges?
cheers
Topic: [EDUCATIONAL] The Business Model of White Label Betfair Exchanges & More - page 2. (Read 435 times)
June 23, 2020, 04:44:10 AM
June 22, 2020, 09:31:25 AM
@tyKiwanuka
why did you stop? I just found your thread and I find it very interesting
why did you stop? I just found your thread and I find it very interesting
Hey, thanks for dropping by and the compliment, appreciated
I didn't stop, this thread is more on hold, until there is some engagement, feedback, questions, discussions or new developments in this space (like Exbet for example). I think for now I have explained the basics of using a betting exchange and the business model of WLE's. So I was waiting for more interest or me getting more creative again 
There is a lot of funny stuff you can do at these exchanges, but it's a bit difficult to understand, when you never used an exchange and also difficult to explain in just written words or with screenshots to a newbie. People are using all sorts of different (trading) strategies to extract some bucks from the markets - with bots, trading software or manually. Trading on an exchange is 100x more fun than just betting with a traditional bookmaker, but I also understand, that a lot of people that just want to place their multi for the weekends football games, so this would always be some kind of a niche/nerdy thread.
are there many WLE s and which are best or at least serious enough that you get you withdrawals?
I only ever used Orbit and Fair999 as WLE's. Fair999 had ultra-risky business model and had to shut down, because people exploited them heavily. The site was still up for some time, but you couldn't get an account there anymore afaik. I never had any problem with Orbit and stayed there until now and didn't look for other possibilities. These exchanges will normally always pay you, because they take no risk themselves. You can compare it with a crypto currency exchange like Binance for example, who just provide a platform for traders to meet and take some fee for it from the trades.
The WLE's - as explained - take some risk of course, but these 20% are still ok from a risk perspective I think and if they see you constantly taking advantage of it, they will surely not pay you. As long as you don't try to cheat them, you should be fine and with them banning bad actors, they should also stay solvent.
But as I said in first post, just regularly withdraw the money you don't need on a daily basis, you never know in this space and better be safe than sorry
June 22, 2020, 06:52:17 AM
@tyKiwanuka
why did you stop? I just found your thread and I find it very interesting
are there many WLE s and which are best or at least serious enough that you get you withdrawals?
why did you stop? I just found your thread and I find it very interesting
are there many WLE s and which are best or at least serious enough that you get you withdrawals?
February 18, 2020, 10:15:07 AM
Another great advantage of playing at exchanges is, that you can sort of plan your bets. Similar to crypto exchanges, you can put orders into the market and wait for them to get matched. This is mostly for inplay/live markets, since the odds normally don’t move that much prematch (you can make some bucks with prematch-trading to though).
Lets assume I have some insight during the first half in todays CL match between Dortmund and Paris. The game started slow and both teams were cautious, but after some time both teams found their rhythm and were able to create lots opportunities to score a goal. The odds for over 0.5 in first half are still not what I want to have, maybe around 1.7. What I can do now, is to put my orders in the market at higher odds and wait for them to get matched. I can put multiple orders into the market and as time goes by and we are nearing halftime, the odds will go up and my orders will get matched subsequently.
These are my orders:
They are hidden somewhere back there, between a lot of other order from different users:
Now all I have to do is wait and hope for a goal after my bet(s) were matched. If a goal is scored before my orders get matched, I will get my stakes back.
There are lots of strategies how to use this feature. What people often like to do, is putting orders in for both players in a tennis match, where the players are pretty evenly matched and some drama is to be expected. The match between and Mayer and Sonego this evening in Rio de Janeiro looks to fit this criteria. I could just place back bets for both players @3,00 for the same stake. If both get matched, I will make a profit, no matter the outcome.
Lets assume I have some insight during the first half in todays CL match between Dortmund and Paris. The game started slow and both teams were cautious, but after some time both teams found their rhythm and were able to create lots opportunities to score a goal. The odds for over 0.5 in first half are still not what I want to have, maybe around 1.7. What I can do now, is to put my orders in the market at higher odds and wait for them to get matched. I can put multiple orders into the market and as time goes by and we are nearing halftime, the odds will go up and my orders will get matched subsequently.
These are my orders:
They are hidden somewhere back there, between a lot of other order from different users:
Now all I have to do is wait and hope for a goal after my bet(s) were matched. If a goal is scored before my orders get matched, I will get my stakes back.
There are lots of strategies how to use this feature. What people often like to do, is putting orders in for both players in a tennis match, where the players are pretty evenly matched and some drama is to be expected. The match between and Mayer and Sonego this evening in Rio de Janeiro looks to fit this criteria. I could just place back bets for both players @3,00 for the same stake. If both get matched, I will make a profit, no matter the outcome.
February 13, 2020, 08:24:32 AM
As mentioned in the last post, you pay commission on your net win in a market. When placing multiple bets in a market, i.e. doing some trading, there lies the big advantage over playing in a traditional bookmaker. In a traditional bookmaker you would “pay” the house edge with every single bet you place, which means that you have lower odds on average.
The Wolves vs Leicester market for tomorrows match for example. Lets say I want to place a bet on the under pre-match, since I am expecting a slow start and cautious approach by both teams. I am still thinking the game will go over, since after maybe 15 minutes, I expect both teams to open up and get more aggressive, looking to score goals.
On an exchange this is maybe how it would look like, if I decide to jump on the over at minute 15:
5% commission on that, would leave me with around 8.50 net win.
Now with bookmakers I get worse odds for the pre-match under and also for the inplay over at minute 15, maybe 1.83 for the under and 2.35 for the over, if I play at a bookmaker with low house edge.
1.83 on the under for 100,-.
2.35 on the over for 78,-.
This would leave me with a net win of 5.13 net win.
8.50 vs 5.13 looks small, but a) longterm it makes a huge difference and b) if you do 10, 20 or 50 bets/trades in a market the difference will be a lot bigger.
Playing with no house edge and only paying commission on your net winnings is the huge advantage of playing at exchanges.
The Wolves vs Leicester market for tomorrows match for example. Lets say I want to place a bet on the under pre-match, since I am expecting a slow start and cautious approach by both teams. I am still thinking the game will go over, since after maybe 15 minutes, I expect both teams to open up and get more aggressive, looking to score goals.
On an exchange this is maybe how it would look like, if I decide to jump on the over at minute 15:
5% commission on that, would leave me with around 8.50 net win.
Now with bookmakers I get worse odds for the pre-match under and also for the inplay over at minute 15, maybe 1.83 for the under and 2.35 for the over, if I play at a bookmaker with low house edge.
1.83 on the under for 100,-.
2.35 on the over for 78,-.
This would leave me with a net win of 5.13 net win.
8.50 vs 5.13 looks small, but a) longterm it makes a huge difference and b) if you do 10, 20 or 50 bets/trades in a market the difference will be a lot bigger.
Playing with no house edge and only paying commission on your net winnings is the huge advantage of playing at exchanges.
February 11, 2020, 07:24:38 AM
The business model of betting exchanges is commission. They are providing a platform, where people can bet against each other with no house edge. After a market is settled, the exchange takes commission on net winnings – you don’t have to pay commission on losing bets/markets.
At Betfair the base commission is 5%. So, if you win 100,- in a market, Betfair will take 5,- of that and you will get 95,- net win in your account.
The good thing is, you can lower your commission by gaining Betfair points. You will get Betfair points for every bet you place, no matter if it wins or loses, it just has to be matched. The points you gain will determine your discount rate. Your discount rate can go from 2% up to 60%. Lets say we have a 60% discount rate with the above mentioned 100,- net win in a market. Our commission would then be:
100,- x 5% x (1-60%) = 2,-
So from previously 5% we managed to get our commission all the way down to 2%, which is the lowest it can get with Betfair to my knowledge.
The commission model gives the exchanges a safe way to earn lots of money, they just need volume/turnover (and that is what all other exchanges than Betfair are struggling with). On a Champions League match day, people will have millions of winnings and you can calculate for yourself what 2%-5% of commission means for Betfair then. And you have tennis, cricket, horse racing etc. running all day, where there is good daily turnover always.
The commission aspect with no house edge is very attractive when doing multiple bets (trading) in a market, this will be discussed in another post.
At Betfair the base commission is 5%. So, if you win 100,- in a market, Betfair will take 5,- of that and you will get 95,- net win in your account.
The good thing is, you can lower your commission by gaining Betfair points. You will get Betfair points for every bet you place, no matter if it wins or loses, it just has to be matched. The points you gain will determine your discount rate. Your discount rate can go from 2% up to 60%. Lets say we have a 60% discount rate with the above mentioned 100,- net win in a market. Our commission would then be:
100,- x 5% x (1-60%) = 2,-
So from previously 5% we managed to get our commission all the way down to 2%, which is the lowest it can get with Betfair to my knowledge.
The commission model gives the exchanges a safe way to earn lots of money, they just need volume/turnover (and that is what all other exchanges than Betfair are struggling with). On a Champions League match day, people will have millions of winnings and you can calculate for yourself what 2%-5% of commission means for Betfair then. And you have tennis, cricket, horse racing etc. running all day, where there is good daily turnover always.
The commission aspect with no house edge is very attractive when doing multiple bets (trading) in a market, this will be discussed in another post.
February 09, 2020, 12:27:36 PM
The opposite of back bets is lay bets, which means you bet against a particular outcome. Laying an outcome requires a little bit of math to calculate the odds and your stakes.
The pink fields and everything right hand from them are orders waiting to get matched from people who want to play back bets. So there are people that want to play PSG @1.40 for a cumulated amount of 3,420 Euro, for @1.41 for 3,728 Euro etc. Then there is people that want to bet on Lyon for odds of 9.00 for 48,- Euro total and people are waiting to get matched for the draw at 6.00 for 566,- Euro. There are more orders to the right, but they are not visible.
Betting against something requires you to calculate the odds - you are playing bookmaker now. The formula is: 1 + (1/(back odds - 1).
Lets say, we want to bet against PSG win, our odds for that would then be 1 + (1/(1.40-1) = 3.50 accordingly.
For your staking, you would now have to think like a bookmaker again. The amount you let your "opponent" stake, will be what you get from him, if he loses his bet. The amount you would have to pay him, if he wins, is his stake multiplied by (odds-1). Lets assume we want to bet against PSG and risk 40,- Euro on that bet. Our lay bet would then be: Lay PSG @1,40 for a stake of 100,- Euro. If PSG wins, we would have to pay 100*(1.40-1) = 40 Euro. If PSG fails to win, we will get the stake of 100,- Euro.
Laying 1.40 for a stake for 100,- is nothing different than playing double chance X2 on Lyon with a bookmaker for @3.50 for 40,- in the end. But you also have the possiblity of laying a correct score, for example the 0-1, and backing and laying on exchanges has other advantages, which I will discuss in some upcoming post.
The pink fields and everything right hand from them are orders waiting to get matched from people who want to play back bets. So there are people that want to play PSG @1.40 for a cumulated amount of 3,420 Euro, for @1.41 for 3,728 Euro etc. Then there is people that want to bet on Lyon for odds of 9.00 for 48,- Euro total and people are waiting to get matched for the draw at 6.00 for 566,- Euro. There are more orders to the right, but they are not visible.
Betting against something requires you to calculate the odds - you are playing bookmaker now. The formula is: 1 + (1/(back odds - 1).
Lets say, we want to bet against PSG win, our odds for that would then be 1 + (1/(1.40-1) = 3.50 accordingly.
For your staking, you would now have to think like a bookmaker again. The amount you let your "opponent" stake, will be what you get from him, if he loses his bet. The amount you would have to pay him, if he wins, is his stake multiplied by (odds-1). Lets assume we want to bet against PSG and risk 40,- Euro on that bet. Our lay bet would then be: Lay PSG @1,40 for a stake of 100,- Euro. If PSG wins, we would have to pay 100*(1.40-1) = 40 Euro. If PSG fails to win, we will get the stake of 100,- Euro.
Laying 1.40 for a stake for 100,- is nothing different than playing double chance X2 on Lyon with a bookmaker for @3.50 for 40,- in the end. But you also have the possiblity of laying a correct score, for example the 0-1, and backing and laying on exchanges has other advantages, which I will discuss in some upcoming post.
February 08, 2020, 12:25:23 PM
Most of the people are probably not familiar with betting/trading on betting exchanges, so I will post some explanatory things, to maybe change that, since exchanges offer great possibilities. If Betfair is not available in your country, you can play at white label exchanges via an agent and with most agents, you can deposit crypto too. You will always play in Euro/USD at the exchanges though.
The big advantage with exchanges is, that you are not only able to place back bets (this is the same as with traditional bookmakers), but you can also place lay bets, which is then betting AGAINST an outcome.
But lets look at back bets first. We have the ManCity – West Ham market for tomorrows game.
The blue fields, and everything that is left hand from them, are odds that are offered for City/West Ham/Draw to win, just like at a normal bookmaker. Lets say I want to bet on City to win:
I am clicking on the blue field for City win. Top right you can enter your stake for that bet and then check on the very left, what would happen for each outcome. After all looks good, I just click on “Place bets” and my order is submitted.
Once the game is finished, the market gets suspended and settled afterwards and you will get your winnings, if you won your bet of course. You will have to pay some commission on your net winnings in a market, but we will talk about that in another post.
I will post some more stuff here in the future. I will try to keep it simple for the start, but if you have any questions or remarks, just ask/post.
The big advantage with exchanges is, that you are not only able to place back bets (this is the same as with traditional bookmakers), but you can also place lay bets, which is then betting AGAINST an outcome.
But lets look at back bets first. We have the ManCity – West Ham market for tomorrows game.
The blue fields, and everything that is left hand from them, are odds that are offered for City/West Ham/Draw to win, just like at a normal bookmaker. Lets say I want to bet on City to win:
I am clicking on the blue field for City win. Top right you can enter your stake for that bet and then check on the very left, what would happen for each outcome. After all looks good, I just click on “Place bets” and my order is submitted.
Once the game is finished, the market gets suspended and settled afterwards and you will get your winnings, if you won your bet of course. You will have to pay some commission on your net winnings in a market, but we will talk about that in another post.
I will post some more stuff here in the future. I will try to keep it simple for the start, but if you have any questions or remarks, just ask/post.
February 05, 2020, 04:15:56 PM
A lot of white label Betfair exchanges have popped up in recent years. This is due to the fact, that Betfair has to strictly follow laws and regulation, while the mirroring exchanges do not (or don't care). I don't know the conditions to be allowed to wear a "powered by Betfair" label, but Betfair itself will happily allow these exchanges to exist, because it brings some volume/liquidity to their markets and thus money in the end.
Betfair had to put a lot of geo-restrictions in place in the last years and as a consequence lost a lot of customers. All these customers - or those that are desperate enough - will have to go via these white label exchanges (WLE) now, in order to participate in trading on the biggest betting exchange in the world.
While the WLE make some money with commission and probably get a few bucks from Betfair, they have their very own and maybe risky business model. Betfair itself has no risk at all, since they just provide a platform, where interested people can bet against each other. But these WLE actually take some risk (20%) on their customer bets and trades.
Lets have a look and visualize. I placed a back for Bundesliga match Frankfurt - Augsburg on Friday in the HT/FT market at Orbit Exchange.
Back HT1/FT2 at odds of 1000 with a stake of 100,- Euro. Now what Orbit does, is, that they only send 80% of that bet to the Betfair market and take 20% of that bet for themselves.
Lets see how it looks at the Betfair market:
You can see my order for odds of 1000, but the stake is only 80,- Euro (some rounding differences I guess, thus it's actually 81,- Euro).
Lets assume that order gets matched and that game will indeed end HT1/FT2. Orbit will then credit 100,000,- Euro to my account and they would have to pay 20,000,- Euro of that from their money (since they took 20% risk on my bet themselves). If I lose the bet, 80,- Euro go to whoever actually matched my order and 20,- Euro will go into the pocket of Orbit Exchange.
Since most people lose with betting, this is a rather safe (additional) business model, but it can be exploited and you as a WLE operator better monitor closely what your customers do.
What does this mean for you as a punter on these exchanges ? Nothing.
What does this mean for your funds on these exchanges ? Be careful and make regular withdrawals.
How to use betting exchanges:
Placing a back bet
Placing a lay bet
The commission
Why you should bet/trade at exchanges
Betfair had to put a lot of geo-restrictions in place in the last years and as a consequence lost a lot of customers. All these customers - or those that are desperate enough - will have to go via these white label exchanges (WLE) now, in order to participate in trading on the biggest betting exchange in the world.
While the WLE make some money with commission and probably get a few bucks from Betfair, they have their very own and maybe risky business model. Betfair itself has no risk at all, since they just provide a platform, where interested people can bet against each other. But these WLE actually take some risk (20%) on their customer bets and trades.
Lets have a look and visualize. I placed a back for Bundesliga match Frankfurt - Augsburg on Friday in the HT/FT market at Orbit Exchange.
Back HT1/FT2 at odds of 1000 with a stake of 100,- Euro. Now what Orbit does, is, that they only send 80% of that bet to the Betfair market and take 20% of that bet for themselves.
Lets see how it looks at the Betfair market:
You can see my order for odds of 1000, but the stake is only 80,- Euro (some rounding differences I guess, thus it's actually 81,- Euro).
Lets assume that order gets matched and that game will indeed end HT1/FT2. Orbit will then credit 100,000,- Euro to my account and they would have to pay 20,000,- Euro of that from their money (since they took 20% risk on my bet themselves). If I lose the bet, 80,- Euro go to whoever actually matched my order and 20,- Euro will go into the pocket of Orbit Exchange.
Since most people lose with betting, this is a rather safe (additional) business model, but it can be exploited and you as a WLE operator better monitor closely what your customers do.
What does this mean for you as a punter on these exchanges ? Nothing.
What does this mean for your funds on these exchanges ? Be careful and make regular withdrawals.
How to use betting exchanges:
Placing a back bet
Placing a lay bet
The commission
Why you should bet/trade at exchanges
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