Betting exchanges cut out the bookmaker entirely and hand the entire process over to their customers. Customers can set their own odds and you will normally find the best odds for events on an exchange due to the openness of the markets. Out of the betting exchanges available the Betfair Exchange is the oldest and largest betting exchange in the world. It has a simple and easy to use interface and a huge range of markets which makes it the ideal exchange to begin using for new and inexperienced matched bettors. As well as having to understand the concept of lay bets, new matched bettors also need to get to grips with the concept of commission charges on bets when they use an exchange. Exchanges, generally speaking, will make their money from charging a commission rate on their customers' net winnings on an event, although different exchanges will have different commission rules and rates. The default commission rate for Betfair is 5%, read on further to find out more about commission.
Betfair Exchange Commission Structure & How It Works
As mentioned previously, exchanges charge a small commission percentage, with Betfair this commission percentage is 5%. This 5% commission is charged on net winnings on bets placed. Betfair do not charge commission on losing bets.
If you have £50 net winnings on an event the commission charged will be :
£50 x 5% = £2.50 commission charged
This commission rate is factored in when calculating your bets using the Profit Accumulator calculator, just ensure that you have the correct percentage entered for the exchange that you are using.
Betfair Commission Discount
Betfair reward your loyalty in using them by awarding Betfair Points. These points accumulate and, if you earn enough, will result in a discount being applied to the base 5% commision rate. You can earn points every time you use the exchange, win or lose. You will earn 1 point for every 10p of commission that you have paid on net winnings and you even get them if your bets lose. The nice folk at Betfair will give you implied points on losses, meaning that they will give you points for what you would have earned if your bet had won not lost. The points are only awarded for activity on the exchange and if you do not use the exchange regularly there is a weekly 15% reduction. You can freeze your points for a week, but if you do freeze them then you cannot earn any more points for bets settled in that period.
What does this mean on commission? Take a look at the images below for an example:
To view your points and discount go to the exchange section of Betfair > My Betfair Account and your points will be displayed for you. Please note that if you have opted into a rewards programme with Betfair you will not be eligible for the discounted commission rate.
0% Commission Offers
Betfair is not the only betting exchange available for matched betting. There are three more exchanges that we recommend our members to sign up to, with the added bonus of exclusive 0% commission offers through Profit Accumulator’s partnership deals. Long term savings through the use of 0% commission can run into hundreds, if not thousands of pounds so they are definitely worth taking advantage of.
Profit Accumulator members can gain access to the 0% deals through the links below:
Working out your discount rate
As your discount rate reduces your commission it is handy to know what your current discount is, or indeed if you have one. That way you can calculate your bets accordingly and eke out every last penny of profit! Please note that your discount is capped at 20% unless you complete Betfair's identity and verification requirements.
The discount rates available are displayed in this graphic, along with how many points you will need to get there:
Already A Member?
If you’re a Platinum member and you know someone who would like to earn a bit of extra money, you can grab your referral code here and pass it on - and we’ll give you £10.
Keen to Get Involved?
The great news is you don’t need to be a sports fan or betting fanatic to sign up and use Profit Accumulator. Many of our members are not sports fans and had never placed a bet in their lives but that doesn’t stop them from making some tax-free cash.
For more info on what matched betting is, check out these articles: