Advantages: The prices with a betting exchange are around 17 to 20 per cent better than those offered by bookmakers. This is because bookmakers factor in a profit on every book that they make in order to cover their overheads and to make a profit. Since you are betting against an individual on a betting exchange, this does not apply. The prices will be determined by what other people are prepared to risk. Since they are only backing one horse, they do not have to make profit on all horses running, as a bookmaker has to. You also have the advantage that you can ask for a better price than is currently on offer and wait for someone to match your request.

There is a huge amount of competition for customers, which means tax-free betting, low commission rates, initial free bets and bonuses are all offered.

A betting exchange also offers more betting opportunities like betting on a photo finish.

The bets can be placed in the privacy of your own home.

You are not punished for winning. With a traditional bookmaker, you are likely to get barred or have your bets limited if you consistently win. However, with a betting exchange you are not playing against the exchange but against other individuals so the exchange does not lose out if you win. They make their money from commission on your bets so the more you bet, the better it is for the exchange, inthe same way as a Poker room.

There is no limit to the size of your bets. As long as you can find a match, you can bet to the level of stakes that your capital allows.
As prices change, you also have the opportunity to hedge bets and lock in a profit.

Disadvantages of using a betting exchange
Big bets cannot always be placed. Bets are limited to the stakes of the players betting. A traditional bookmaker is able to take most high-stake bets but with a betting exchange you are limited by what the other players want to bet.

You can’t bet with cash, you need to deposit money with the exchange or use a bank or credit card.

You need to have a computer and internet connection.

Care also needs to be taken to avoid scams, fraud and identity theft.