Similarly to the stock exchange, the contracts are made between
anonymous members and the exchange acts merely as a facilitator for a
commission. Naturally it takes two to make a bet, one party who backs and
another party who lays the bet.
In online betting it is the same, in principle, albeit a stake offered by
one party may be taken by more parties. This is a huge advantage for the
bettors as they can make offers as if they were the bookmakers, yet they
do not need to have a bookmaker's licence and they usually pay commission
only on their net winnings in a market. The bettor can get better odds (see
bbgi and bboi indices) and the freedom and ease to establish a bet
portfolio using bet exchanges as well as bookmakers.
Needless to say that a bettor can only win if another bettor loses. However, bet exchanges in general represent the free market and the odds are better than those offered by bookmakers. It means that if somebody is ready to risk some money by betting, it is in his best interest to do so where he gets the more profit on his bet.
Recently, at one exchange, while the match was being played. you could have laid (I did) Barcelona to win against AC Milan at 2.76 (decimal odds - see the odds conversion table if needed). At another exchange where this was a live betting event, you could have backed (and I did) the same outcome at 5.2. It is almost 100% gross profit less commissions. Depending on the stakes available and your funds held at the relevant service providers, you could have made a net profit of about 44% or so (tax free) irrespective of the final result and without running a real risk.
To make use of the chance, one had to start by laying Barcelona at 2.76, which took about 22 seconds and than going on by backing Barcelona at 5.2 or so.
I have to admit that there was an exposure lasting for half a minute that Barcelona might score a goal and the betting might be suspended but you could watch the match on television and judge the situation as to if it was unlikely for any of the teams to get a chance of scoring.
We recommend the following two betting exchanges for sports:
P.S. former exchange betonbet have gone out of business.