The betting exchange Betfair is easily the most popular UK betting site with a reported turnover in excess of fifty milion pounds per week. Although person to person betting isn't popular with every type of punter.
Betfair person to person betting has in a very short time revolutionised the gambling industry in the UK. All Betting with Betfair is placed there by users who either want to have a bet in the normal way (back), or offer odds to other punters (lay). Bets are matched between people with opposing views. The Betting Exchanges like Betfair take a small commission between 2-5% from the winners winnings. The major benefit for the punter is that they can achieve better odds of up to 20%. Betfair offers a market on most of the major events worldwide and its in-running markets are generally very strong.
Betfair is the trading name of The Sporting Exchange Ltd.
The Sporting Exchange Limited was founded in August 1999 by Andrew Black and Edward Wray. The technology used by The Sporting Exchange Limited is proprietary and, as well as being protected by copyright, is the subject of several patent applications that have been filed with various jurisdictions.
The Sporting Exchange Limited is located in the United Kingdom and operates within the confines of the Betting, Gaming and Lotteries Act 1963. It holds a bookmakers permit in England and Wales.
Back or Lay
When you "back" a selection (be it an individual, a team, horse, dog or other), you are betting that it will win. This is just like betting with Online Bookmakers.
When you "lay" it, you are betting against it winning. For example, if you're betting in a market on who is going to win the Cheltenham Gold Cup and you lay Best Mate, you offer odds to other punters who wish to back Best Mate. If Best Mate doesn't win, then you pick up the backer's stake. If Best Mate wins, then you pay out. This is what bookmakers traditionally do. You never know who you are betting against, your privacy and the confidentiality of your bets is maintained by the Betting Exchange.
With Betfair there is always a choice of what odds to accept. If you want better odds than are currently available, you can place an order for a better price, but be realistic because there has to be somebody prepared to lay the bet at those odds, and vice versa. Take a look at the odds before a race and you will see them change as visitors back and lay their bets. The Betting Exchange odds often improve nearer to the off, as there are more people in the market.