The best exchanges

UPDATE: First off, make sure you have an account with Pinnacle because that is the best bookmaker by far. At most events it beats the odds of any exchange. It also has higher limits and it accepts winners.

UPDATE 2: Smarkets is shit lately.

An exchange is a place where you bet against other people and the house only takes a commission, usually from the winner. That commission is extremely important because it often makes odds that seem good become shit compared to Pinnacle‘s or SBOBET‘s offering. Exchanges usually have a loyalty program where if you bet more, the commission is reduced. When comparing exchanges just ignore it, especially if you’re starting out. Two reasons:
– most of them have similar programs, they kind of cancel out;
– if you’re on a big commission since the beginning, beating the market will be close to impossible; I guarantee you won’t have any more funds when the commission is finally reduced. Of course, they’ll hope that you deposit again and again, but wouldn’t you rather bet on odds that offer value from the start?

There are only a few exchanges worth talking about and I won’t tell you which one to choose. Instead, I will teach you how to choose. There are two important factors: real odds and volume (liquidity). This is a list of all the exchanges with enough liquidity:

– Betfair | 5% commission | doesn’t accept winners (the commission reaches up to 60% for the ones that beat the market badly)
– BETDAQ | 5% commission | 5% is ludicrous. They accept winners but winners don’t accept donating 5% of every win.
Matchbook | they have a very tricky system of calculating the commission in order to create wrong opinions in your brain. Just take it from me and consider it as 1.5% out of every win in the long term. This exchange has good odds at the American sports.
– Smarkets | 2% flat commission from the net winnings on each market, a market being all the type of bets that you can place at an event. Therefore if you’re active with many bets on the same event, this is the lowest commission in the industry. If not, it’s the second best. They are the new cool kid on the block (the company is fairly recent compared to the others).

Follow these links, register immediately afterwards, find an event from the league/sport you usually bet on and let’s compare the odds you would get with the ones at Pinnacle or SBOBET (these being the best bookmakers):
Matchbook: http://affiliate.matchbook.com/processing/clickthrgh.asp?btag=a_1168b_1
Smarkets: https://smarkets.com/?sma=YK4c
If there’s any promotion running at the moment, the links will give you access to it. If not, it doesn’t matter; you should never be impressed by deposit bonuses and other similar trash, for multiple reasons.

Now… Let’s see what are the real odds that you would get. Keep reading from here only if you’ve registered an account with both exchanges mentioned above. First, make a screenshot of all the bet types and odds that you’re interested in from the same event. I chose Aston Villa (AV) – West Brom (WB); the match is played tomorrow (2015.04.25). If you’re usually betting five days before the event, choose a match that’s being played in five days. And so on… basically make sure that the bet which you will investigate will be the kind that you would place. Here are the screenshots that I took (Smarkets lacks the Asian handicap market and Matchbook has bad odds at 1×2 therefore I’ve skipped it):

Let’s start with the 1×2 market. Among the bookmakers, Pinnacle has the best offer with 1.255 for AV, 6.7 for draw and 13.28 for WB. From the exchanges, Smarkets has 1.29, 6.6 and 13. We can skip the draw and the away win at the exchange directly. Even without taking into account the commission, what they have is lower than Pinnacle‘s offering. But do they really beat the odds offered by this amazing bookmaker for the home win? Their commission is 2%. To calculate the real odds you would do this:

real odds = (odds – 1) * percent of the winnings that are kept + 1

Therefore for home win we have:
real odds = (1.29 – 1) * 0.98 + 1
0.98 represents the 98% of the winnings that are kept (because the commission is 2% from the winnings). After calculation, the real odds turn out to be 1.2842, which is a lot higher than Pinnacle‘s 1.255. To put it into perspective, with 1.255 Pinnacle keeps 2.09% of what you bet in the long term. If it were to offer 1.2842, they would only keep 0.32%! If your calculations yield similar results – even for only one event out of a few tested, you should start using Smarkets immediately. This is the kind of differences that a professional punter chases and dreams about. This is what makes or brakes a profit in the long term. Notice that the liquidity is not bad, with 3,629 EUR available at those odds. That can’t stop you to place a 10,000 EUR bet, it just means that only 3,629 EUR of it will be covered instantly. If, for example, you’re sure that in this case the away team will lose and the odds are very low for them at the exchange, you have the option to accept action on them as if you were a bookmaker. This is called “laying” and is the opposite of “backing”. If you lay them for 120,000 EUR at odds 12, it signifies that you act as a bookmaker and accept bets totaling up to 10,000 EUR on the away team, with odds 12. Therefore bad odds at markets where money were traded already doesn’t mean you can’t gamble profitably, it simply means  that this might be the kind of place where it is more profitable to lay than to back.

For the sake of having everything clear in your mind, let’s do the comparison for Asian handicap 1.75 as well. On Matchbook people offer 1.942 and 2.02, with decent liquidity above 3,000 EUR. Pinnacle has it at 1.952 and 1.990 and SBOBET at 1.93 and 2. Matchbook seems to beat them both for the away team, but do they really?

real odds = (odds – 1) * percent of the winnings that are kept + 1

Therefore real odds = (2.02 – 1) * 0.985 + 1 = 2.0047

I’m amazed to find that it does… slightly.

Remember… when comparing bookmakers to exchanges, always check out the liquidity available. Translation: check out how much you can bet at the maximum odds. Depending on your bet size, that might be adequate or not. In this last example at Asian Handicap, if your required bet size was 10,000 EUR, it would have been best to split your bet: 3690 EUR at MatchBook and the rest at SBOBET.

Of course, don’t put too much value on my example and do your own homework because liquidity and odds differ greatly from sport to sport, bet type to bet type. Your intentions might differ as well. Maybe low odds is what you want! If there’s a decent matched volume at crappy odds, just go ahead and start laying.

Successful sports betting is mainly about digging for opportunities instead of predicting outcomes.

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