Betting exchanges are different from traditional sportsbooks in several ways.
Rather than squaring off against “the house,” exchanges offer peer-to-peer betting, where users have the power to wager on agreed-upon lines/odds.
This gives customers a unique opportunity to play the role of oddsmakers. For instance, you could offer $100 on the New England Patriots at -3.5, and another user that wants to back the New York Jets at +3.5 can agree to those odds.
Betting Exchanges in New Jersey
New Jersey is home to two betting exchanges at the moment, Sporttrade and Prophet Exchange. The latter of which offers an enticing new user sign-up bonus with a risk-free bet of up to $250.
The Garden State has been a leading innovator when it comes to legalized sports betting and online casino gaming in the US, so it's no surprise to find them at the forefront of sports exchanges in the US market.
Betting Exchanges business model – how do they differ from sportsbooks?
When you browse the list of odds inside your sportsbook app, you will often find wagers on points spreads and over/under totals set around -110. This means you need to wager $110 to win $100. It effectively serves as a house tax where bookmakers are raking in 10% by pricing it into the odds. This is most commonly referred to as “the juice” or “the vig.”
From a user standpoint, the most enticing aspect of betting exchanges is that they offer customers a significantly reduced vig when compared with traditional sportsbooks.
For instance, instead of seeing odds at -115 at sports exchanges, you can lock in your bet at +100. Betting exchanges use this model to appeal to new customers looking to find the best available odds on the market.
So how do they make money? Usually, by charging a flat fee on all winning wagers. For example, Prophet Exchange takes a 2% fee (but only if your bet wins). Even so, this fee is significantly lower than your average vig.
What advantages are there to betting on an exchange over a traditional sportsbook?
Bettors who are seeking the most favorable odds out there will be licking their chops. Thanks to the peer-to-peer function, users start out on a level playing field, unlike at traditional sportsbooks where the juice inherently skews the odds towards the house.
What things do I need to keep in mind when betting on an exchange?
While the advantages of an exchange are apparent, there are some things customers should keep in mind.
Betting exchanges don't offer nearly the same array of betting markets and odds that traditional sportsbooks do. You generally will only find odds on major sports, and you don't have the option to make parlays or exotic prop bets.
Another key consideration is liquidity. Because of the peer-to-peer aspect, you need action on both sides of a wager in order for a bet to be valid. This means it can sometimes be difficult to get the exact odds you want or even, in some cases, the betting market you want.
The logistics of exchanges can be a bit overwhelming for new players so it is advisable you familiarize yourself with traditional sportsbook odds/wagering before diving headlong into an exchange.
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