A betting exchange connects backers and layers. On Betfair, you can back a horse at 5.0 (4/1) and another user lays it — betting against it — at the same price. The exchange takes 5% commission from the winning bettor. The price is set by supply and demand between users. No house margin is embedded in the odds. This is genuinely revolutionary compared to traditional bookmaking.
Betfair Exchange: Strengths and Limitations
- →Extremely deep liquidity on UK horse racing, major football, cricket and rugby
- →The lay bet mechanic is unique — you can bet against any outcome
- →Commission structure rewards active traders with loyalty discounts
- →Limited to primarily UK/European sports — global events have thin markets
- →In-play trading requires fast manual action or API access for serious users
Prediction Markets: A Different Architecture
Prediction markets don't use back/lay mechanics. You buy YES or NO shares at market price. The market maker or automated mechanism sets the spread. You can hold shares until resolution (outcome determined, shares pay out at £1 or $0) or sell them at any time at the current market price. There is no counterparty risk in the traditional sense — the market resolves against objective criteria.
The key comparison: Betfair Exchange wins on UK sport liquidity. Boromarket wins on global event coverage, non-sport markets (elections, tech, economics), and simplicity of the YES/NO mechanism for newcomers to sophisticated prediction.
For most serious UK bettors, the optimal approach uses both: Betfair for major UK racing and football where liquidity is deep, and Boromarket for global events, speculative futures, and markets where collective intelligence pricing outperforms exchange thinness.