Betting exchanges in Australia
On an exchange you bet against other punters instead of a bookmaker, which is why you can lay as well as back, and why the prices sitting on it carry no margin. Back, lay, liability and commission all follow from that, and so does the exchange price's use as the benchmark this site compares racing bookmakers against.
By the B337 team. Last updated .
The short answer
- On a betting exchange you bet against other punters rather than against a bookmaker. The exchange matches the two sides and takes a commission on winnings.
- In Australia, Betfair Pty Ltd runs a betting exchange and is on ACMA's register of interactive wagering providers, with the Northern Territory's wagering regulator as its licensing authority (checked 6 October 2026).
- Because you can take either side, you can lay: accept someone else's bet. Laying $25 at $6.00, for example, means $125 is held as your liability, and you pay it out if the selection wins.
- An exchange has no margin built into its prices, so its back and lay prices bracket what the market thinks a chance is. With illustrative prices, a bookmaker's two prices add to 105.3% while the exchange midpoints add to 100.0%. The 5.3% excess is the bookmaker's overround; a book balanced at those prices keeps 1 - 1 / 1.0534 = about 5.1% of the money staked.
- That is why a bookmaker price above the exchange price is the usual test for value on racing, and the B337 Terminal shows Betfair back and lay beside the bookmaker prices so you can make that comparison.
What is a betting exchange?
A bookmaker sets a price and takes the other side of your bet itself. An exchange does not: it is a marketplace where one punter offers a price and another takes it, and the exchange matches them and charges a commission on winnings. Betfair runs an Australian betting exchange, and its prices are the reference this site uses on racing.
There is no margin in the price, because nobody set it to carry one. You can take either side of a bet, because both sides are just punters. And a price only exists while somebody is actually offering it, which is the exchange's own weakness.
Back and lay, side by side
A market shows two prices for every selection. The best back price is the most anyone will currently pay you if you want it to win. The best lay price is the least anyone will currently accept if you want to bet against it. The back price is always shorter than the lay price, by a tick or two in a busy market and by much more in a thin one, and the gap between them is the back lay spread. The market's own estimate of the chance sits in between.
Laying, and what liability really costs
Laying is the part that trips people up, because the number at risk is not the number you typed.
When you lay, you are the bookmaker for that bet. Someone backs the selection with you at the price; if it loses you keep their stake, and if it wins you pay them out. The amount you can win is the stake, and the amount you can lose is the liability.
Laying $25.00 at $6.00
Example only: hypothetical price with 5% commission. Not a real market.
- You risk
- $125.00
- stake x ($6.00 - 1), held by the exchange
- You win
- $23.75
- $25.00 less 5% commission
- If it loses
- +$23.75
- the backer's stake, after commission
- If it wins
- -$125.00
- you pay out at the odds
A $25.00 lay at $6.00 risks five times the stake, and at $20.00 it would risk 19 times it, which is why long shots are expensive to lay. Above $2.00 a lay ties up more than backing the same stake would, and below it a lay ties up less: $25.00 laid at $1.50 risks $12.50. It is easy to miss if you are used to a bookmaker account, where the stake is the most you can lose.
Laying is what makes hedging possible: back a selection at a bookmaker, lay the same selection on the exchange, and the two positions nearly cancel. Matched betting works through that on an Australian bonus bet, and the bonus bet converter does the lay stake arithmetic.
Betting involves risk. Bookmakers can restrict or close accounts and void bets, automation can fail, prices move, and a positive expected value (+EV) bet can still lose. Promotions carry each bookmaker's own terms. There is no guarantee of profit. A hedge only holds if the lay is matched in full at the price you planned, and the bookmaker and the exchange can settle the same event differently. A bonus bet that loses pays nothing. See responsible gambling for limits and support.
Commission, and why it is not a margin
An exchange charges a percentage of your net winnings in a market. Lose, and it charges nothing. The rate is the exchange's to set and can differ by market and by account, so treat any figure you read, including the 5% used in the examples here, as a number to look up rather than a constant.
A commission and a bookmaker's margin are different costs, and the difference changes any comparison between the two.
| Difference | Bookmaker | Exchange |
|---|---|---|
| Who sets the price | the bookmaker | other punters |
| How it is paid | a margin inside every price, win or lose | a commission on net winnings in a market, nothing on a losing one |
| Can you lay? | no | yes, up to your liability |
| Promotions | bonus bets and money back offers | few |
| When a price goes | when the bookmaker moves it | when the money offering it is taken |
An exchange price is not quite as good as it looks once commission is taken off. Where it is your only bet in a market, a winning back bet really pays 1 + (price - 1) x (1 - commission rate) per $1.00: at the illustrative 5%, a $2.02 back price pays 1 + 1.02 x 0.95 = $1.97, so a bookmaker at $2.00 pays more although it looks shorter. A bookmaker can also pay more in a thin market, where a long shot with little money on it can show a back price shorter than the bookmaker's.
Why the exchange price is a fair benchmark
Hypothetical prices, chosen to show the arithmetic.
Turn a price into an implied chance by dividing 1 by it, and add up every outcome in a market. A fair market adds to 100%. A bookmaker's card adds to more: that is the overround, and it is how the bookmaker is paid.
| Outcome | Bookmaker | Exchange back | Exchange lay | Midpoint |
|---|---|---|---|---|
| Outcome A | $1.85 | $2.02 | $2.04 | $2.03 |
| Outcome B | $1.95 | $1.96 | $1.98 | $1.97 |
| Implied chances added up | 105.3% | 100.5% | 99.5% | 100.0% |
The bookmaker's two prices add to 105.3%, an overround of 5.3%. The exchange's midpoints add to 100.0%, which is as close to fair as a real market gets. The back and lay prices bracket that midpoint: back a touch short, lay a touch long (the back prices add to 100.5%, the lay prices to 99.5%).
Using it as a benchmark
That is why the exchange price works as the reference on racing. One common estimate is the midpoint of the two implied chances: on outcome A it is (1 / 2.02 + 1 / 2.04) / 2 = 49.26%, a fair price of $2.03, which on a spread this tight is also where the simple average of the two prices lands. If a bookmaker is paying $2.10 on it, the bookmaker is offering more than the market thinks the chance is worth: 2.10 / 2.03 - 1 = 0.034, an estimated 3.4% per dollar staked. That figure is the expected value. An EV overlay on the Terminal compares each bookmaker price with an estimated fair price, on racing from Betfair's own market; it is an estimate, not a forecast.
Two cautions. The exchange is a good reference, not an oracle: on a thin market with very little money on either side, the midpoint is two punters' opinion rather than the market's. And an edge measured against the midpoint is before commission on the exchange side, which matters if you intend to hedge rather than simply take the price. +EV betting works through the whole comparison.
Betting involves risk. Bookmakers can restrict or close accounts and void bets, automation can fail, prices move, and a positive expected value (+EV) bet can still lose. Promotions carry each bookmaker's own terms. There is no guarantee of profit. A price that looks out of line can simply be the first price to react to news the rest of the market has not priced yet. See responsible gambling for limits and support.
What an exchange cannot do
An exchange has limits a bookmaker account does not: thin markets, and liability held until the market settles.
Liquidity, or the lack of it
A price is only real if someone is there to take it. Big metropolitan racing and major sport are deep; a midweek provincial market, a long shot or a minor sport can have very little money on the other side, and a bet that is not matched is not a bet.
Liability, not stake, is what you risk
A lay ties up the full liability until the market settles. On a long shot that is many times the stake, which limits how much you can have on at once far more than the stake does.
Few promotions
Exchanges are not built around bonus bets and money back offers the way bookmaker accounts are. The trade is better prices for fewer promotions, which is also why the two are used for different jobs.
Prices move, and you may be last
An exchange price is the best offer currently sitting there. It can be gone before your bet is matched, and part of a bet can be matched at one price and the rest at another or not at all.
Settlement is the exchange's rules
Dead heats, scratchings, abandonments and what counts as a result are the exchange's own rules, and they are not always the same as a bookmaker's on the same event.
Where B337 fits
B337 is neither a bookmaker nor an exchange. It takes no bets, holds no betting funds and leaves your money in your own accounts. On racing, the exchange is where its fair price comes from; on sports, the fair price comes from a global market reference with the bookmaker margin removed.
On the Terminal, Betfair back and lay prices sit beside the bookmaker columns on racing and sports, with price history and closing lines, and on racing an EV overlay turns the comparison with Betfair into one figure per runner. In the racing strategy the same comparison is the core rule: close to each jump it checks each bookmaker's win price against the Betfair price and places a bet only where the edge you set is met. Sessions run on your own computer, which has to be on, awake and online, and many bookmakers restrict automated betting in their terms. See the horse racing betting bot.
What B337 does not do is bet on the exchange. There is no back or lay placement on Betfair in the product, so hedging, trading and laying are yours to place in your own exchange account.
See Betfair beside 40+ bookmakers
A free account opens a limited view of the Terminal with live odds. Betfair back and lay beside the bookmaker columns come with Terminal View and above.
- Betfair back and lay prices next to 40+ bookmakers, racing and sports
- EV overlays measuring each bookmaker price against an estimated fair price
- Price history and closing lines
- Your own de-vig settings for the fair price
- Racing sessions that compare bookmaker win prices with Betfair, on Full Automation
Betting involves risk. Bookmakers can restrict or close accounts and void bets, automation can fail, prices move, and a positive expected value (+EV) bet can still lose. Promotions carry each bookmaker's own terms. There is no guarantee of profit. For free and confidential support call 1800 858 858 or visit gamblinghelponline.org.au. See responsible gambling for limits and support.
Common questions
Is Betfair available in Australia?
Betfair Pty Ltd, trading as Betfair, is on ACMA's register of interactive wagering providers, with the Northern Territory's wagering regulator as its licensing authority (checked 6 October 2026). You can check any provider on ACMA's register. Betfair is a trade mark of its owner. B337 is not affiliated with Betfair, and this page is not advice about opening an account: it explains how exchanges work and why their prices are useful as a reference.
How is commission worked out when I have several bets on one market?
On your net winnings in that market, not bet by bet. Illustrative, at the 5% rate used here: a back bet that wins $40.00 and a lay in the same market that costs $18.00 leave $22.00 net, so commission is $1.10. If a market nets to a loss there is none.
What is Betfair Starting Price?
It is a price the exchange strikes for each runner at the jump, and bets placed at the starting price are settled at it rather than at a price taken earlier. Betfair starting price explained is the page on how BSP is set, and Odds types explained compares it with a bookmaker's starting price.
Keep reading
Start with a free account
A free account opens a limited view of the Terminal with live odds. Paid plans add the full board, with Betfair back and lay prices beside 40+ bookmakers, price history, closing lines and EV overlays. For free and confidential support call 1800 858 858 or visit gamblinghelponline.org.au.