Betting exchanges explained: back, lay, liability and commission

A betting exchange is a marketplace where bettors bet against each other. The exchange does not set prices or take a side. It matches someone who thinks a selection will win (the backer) with someone who thinks it will not (the layer), holds both stakes, settles the bet and charges commission on the winnings. That structure can make prices sharper on busy markets and lets you do something a sportsbook will not: bet that something will lose.

Back and lay

• Back a selection: you win if it wins. This works like a normal bet. Back £10 at 3.0 and you make £20 profit if it wins.
• Lay a selection: you win if it does not win. You are acting as the bookmaker for another bettor.

Exchange screens show the best available back price and lay price side by side. The lay price is slightly higher than the back price; the gap between them is the spread. On liquid markets it can be very narrow.

Prices are shown in decimal odds. Convert other formats here:

Lay liability: the arithmetic

When you lay, the stake you enter is the backer's stake: the amount you win if the selection loses. Your liability is what you pay if it wins:

Liability = backer's stake × (decimal odds - 1)

Laying at long odds puts a large amount at risk to win a small one. A £10 lay at 11.0 risks £100. Check the liability figure on the bet slip every time, not just the stake.

Commission

Exchanges earn by charging commission on winnings. Betfair's published charges say commission is charged on your net winnings in each market, and if you make a net loss in a market you pay none. The rate depends on the exchange; at Betfair it depends on the rewards package you choose, and the worked example on its charges page uses 2%.

Lay betting example with 2% commission (illustrative, our calculation). You lay £10 at 4.2.

• Selection loses: you win the backer's £10. Commission is 2% of £10 = 20p. Net profit £9.80.
• Selection wins: you pay £32. No commission, because your market result is a loss.

Back example with 2% commission. Back £10 at 3.0 and it wins: £20 profit, less 40p commission, £19.60.

Commission works like a margin, but you pay it only when you win. On our calculation, on a true 50/50 bet matched at 2.00, a £1 stake wins 98p after 2% commission half the time and loses £1 half the time: an average cost of 1p per £1. For comparison, a two-way sportsbook market with a 4.5% margin costs about 4.3p per £1 (see betting margins and value). Exchanges can also charge other fees in specific cases; Betfair, for example, publishes an "Expert Fee" that applies only to a small number of highly profitable exchange accounts. Read the charges page of any exchange before you use it.

Markets and rules

An exchange price is only as good as the money behind it. Big events attract the most money and the narrowest spreads; smaller markets can be thin, with wide spreads and little available to match.

Exchange rules differ from bookmaker rules in places:

• Non-runners. On Betfair's horse racing win markets, when a horse is withdrawn before the off, the traded price of matched bets on the remaining horses is reduced by the non-runner's reduction factor, a percentage based on its forecast price and chance of winning, if that factor is 2.5% or more. Bets on the non-runner itself are void. Betfair's example: with a 25% factor, a traded price of 8.0 becomes 6.0. This is the exchange's version of a Rule 4 deduction (see our horse racing guide).
• Dead heats. Betfair reduces the backer's stake in proportion to the number tied and settles the reduced stake at the matched price.
• In-play delays. The UK Gambling Commission notes that exchanges add a delay to in-play bets to protect their users from people with faster information. See our in-play betting guide.
• Unmatched bets. If nobody takes your price, your bet sits unmatched. Check whether unmatched bets are cancelled at the start of play.

Matched betting: what it is and the risks

Matched betting is the practice of using bookmaker promotions together with an exchange. A bettor backs a selection with a bookmaker to qualify for a promotion and lays the same selection on an exchange, so the two bets roughly offset each other. The aim is to capture part of the promotion's value regardless of the result.

The risks are factual and worth stating plainly:

• Account restrictions. Bookmakers can limit stakes or close accounts. The UK Gambling Commission's chief executive wrote in July 2025 that operators are entitled to act in their commercial interests and manage liabilities. In data covering almost 15 million active accounts in 2024, 4.31% had some kind of restriction.
• Promotion terms. Offers can be withdrawn or changed, and their terms decide whether a bet qualifies. In Great Britain, social responsibility code 5.1.1 says licensees must not apply wagering requirements that require a customer to play through bonus funds more than 10 times, or include more than one type of gambling product within an incentive.
• Errors and liability. A lay placed at the wrong odds or stake can leave a large loss. Exchange liabilities can be several times the stake.
• Time and attention. Tracking offers and bets takes time, and repeated betting can become a habit that is hard to step back from.

Matched betting is not a reliable income, and it is still gambling. We do not provide step-by-step instructions for using promotions this way.

Mistakes to avoid

• Entering a lay stake without reading the liability.
• Forgetting commission when comparing exchange and sportsbook prices.
• Laying long-priced selections without the money to cover the loss.
• Leaving bets unmatched when the market goes in-play.

Where to bet

See our UK betting site listings, New Jersey sportsbook listings and the sports betting markets hub. For prices and margins, read how to read betting odds, betting margins and value and odds boosts and betting promotions.