Betting Exchange® | Sport Trading with Gianluca Landi

The betting exchange is an electronic platform that allows bettors to trade odds with each other. This "betting stock market" works similarly to a financial exchange for stocks, forex, and cryptocurrencies.

In the Betting Exchange, the traditional bookmaker figure does not exist to "lay" the bets for the customer. In back and lay betting, there is an authorized operator who manages the exchange system, ensuring everything works safely and transparently.

This system was invented by Betfair in 2000 and revolutionized the betting world. In Italy, the exchange arrived in April 2014, after a fourteen-year wait, with Betfair and Betflag as the first authorized operators.

The immediate advantage for the user is that odds are, on average, 5-10% higher compared to traditional betting.

The functioning of betting exchange is very similar to a financial stock market: users exchange bets on sporting events. Let me explain the process step by step.

The system automatically matches bets when the odds and the stake coincide. If there isn't enough liquidity at the selected odds, your bet remains unmatched or "waiting." When another user accepts the odds and amount, the match is completed.

Liquidity is the crucial difference from classic betting. With traditional bookmakers, the concept of liquidity doesn't exist; the bookmaker decides whether or not to accept the bet based on their business risk.

The advantages of betting exchange over traditional betting are numerous and significant; once understood, you will likely never want to go back to classic bookmakers.

The second major advantage is that your account will never be closed or limited if you win. This is fundamental: while traditional bookmakers see you as an "enemy" to be fought, in betting exchange you are a "business partner." If you make profits, the operator also earns from the commissions you pay on your winnings.

Live trading is completely free. You can back or lay at any time without the market suspensions that bookmakers apply when they fear an imminent goal.

The tax aspect is simplified: government taxes are already included in the commissions (at 20% of the commission itself). The operator acts as a tax withholding agent, so you do not need to file tax returns for these winnings.

Laying a bet means betting that a specific event will NOT happen. The user effectively becomes the "bookmaker" offering those odds to other bettors.

When you lay a bet, your winnings equal the lay stake, while your loss is the liability.

Liability is calculated using this formula: (Lay Odds - 1) × Lay Stake.

Liquidity is the total sum of all back and lay offers present in each market for every odds level. It is the most important parameter to determine if your bet can be matched in the market.

A common mistake for beginners is thinking that once they back or lay, they are automatically in a loss. This is not true: the potential loss is due to the back-lay spread.

The main limitation in Italy is precisely the reduced liquidity compared to international markets. The real qualitative leap will occur when European or worldwide shared liquidity arrives.

Earnings in betting exchange depend on four fundamental factors that must be understood before starting. There are no magic formulas or guaranteed earnings, but with a correct method, it is possible to build consistent profits over time.

Always beware of those who show you screenshots of winnings or promise easy money. "Winning slips" are a clumsy trick to attract beginners.

The most important advice: study before risking your money. Learn the basic principles, understand serious methodologies, and practice with simulators and paper trading.