Arbusers

Selecting the perfect betting exchange can define your success as a smart bettor. In this comprehensive comparison, we explore the most popular betting exhanges, namely Betfair and Smarkets, focusing on key aspects like liquidity, commission rates, platform usability, and innovative features. Whether you prioritise market depth, lower costs, or cutting-edge tools, this head to head comparison is designed to help you make informed choices, maximising your betting potential on a platform that matches your needs.


1. General business model and commission structure.

Betfair: Operates as both a traditional sportsbook and a betting exchange, but here we will talk about the exchange only. On the exchange, Betfair takes a commission on net winnings (usually between 2% and 5%, depending on the bettor’s region and volumes). Players with higher than average volumes and long term winners will be subject to what they call ''Premium Charges'', which can go as high as 60% for the most profitable users. This can substantially reduce profitability for long term winners. In the end, it discourages professional bettors who do not want to share their hard earned profits with others.
Smarkets: Focuses almost exclusively on being a betting exchange with a flat 2% commission on net profits, without additional charges which is often more attractive and cost effective for certain types of bettors.
Conclusion #1: Smarkets model is simpler, more honest, and advantageous for bettors seeking to maximise returns, or minimise fees.


2. Market Coverage

Betfair: Offers unparalleled diversity, including niche sports, politics, and entertainment. The range allows professionals to specialise in less competitive markets, finding edges through experience and detailed analysis.
Smarkets: Focuses on mainstream sports and events but offers limited coverage in less popular markets. Non-sporting markets like politics are available but less diverse. Professionals focusing on niche or international markets might find Smarkets less comprehensive.
Conclusion #2: Betfair caters better to users looking for variety and niche opportunities. Betfair’s diversity enables advanced market selection and portfolio diversification, while Smarkets focuses on simplicity.


3. User Experience and Interface

Betfair: Offers a more feature-rich platform, including live streaming of events, detailed statistics, well displayed graphs, and advanced betting tools such as cash-out options. However, this can make the interface more complex for beginners, but once you get familiarised, it gets increasingly difficult not to have these features.
Smarkets: Known for its minimalistic and intuitive design. It’s user-friendly and streamlined, catering to those who prefer simplicity over additional and fancy features.
Conclusion #3: A casual bettor who is not looking for sophisticated solutions will choose Smarkets, but anyone above average will go for Betfair.


4. Liquidity and Volume

Smarkets is injecting its own liquidity into its exchange while Betfair relies on bettors betting against each other. This has several important implications for the comparison between the two platforms. Here’s a detailed analysis of the potential impacts:
Betfair:
- The king of all exchanges when it comes to liquidity.
- Liquidity on Betfair is organic, driven by real users betting against each other. This dynamic ensures that odds reflect the consensus of bettors’ opinions, making them a reliable indicator of market sentiment.
- The "crowded market" effect benefits professional traders who rely on tight spreads and efficient market theory.
Smarkets:
- Liquidity is slowly growing but remains substantially lower than Betfair’s, particularly in niche markets.
- Injected liquidity can ensure smoother operations and fewer instances where users are unable to match bets, especially in low-traffic markets.
- However, this could lead to artificial odds that don’t accurately reflect true market sentiment, potentially creating inefficiencies or discrepancies compared to other exchanges. This can be exploited by a smart bettor.
- Professional bettors may face challenges with large stake sizes in less popular events, as fewer counter-parties are available to match bets. Simply put, Smarkets can’t offer enough of it.
- The smaller user base contributes to slower market movement and wider spreads in some cases. But…
- We believe that in most markets, Smarkets is automatically following Betfair’s odds movements simultaneously to avoid being exploited by smart bettors.
Conclusion #4: Betfair provides a more authentic market experience, while Smarkets’ artificial liquidity may sometimes benefit value-seeking bettors but might not sustain larger trades if real counter-liquidity is absent. Betfair is ideal for high-volume traders seeking robust liquidity, while Smarkets may appeal to cost-conscious users trading smaller volumes.


5. Trading Tools and Features

Betfair: Provides advanced trading tools, including integrated APIs, cash-out functionality, and live streaming. Third-party softwares like BetAngel and GeeksToy are accepted and further enhance trading efficiency.
Smarkets: Offers a clean API and supports some trading software but lacks some native features. The focus remains on a straightforward user experience rather than advanced tools that will be used by more professional bettors.
Conclusion #5: Betfair is preferred by traders who rely on sophisticated tools and analytics.


6. Pricing and Odds Movement

Betfair:
- Odds tend to stabilise quickly due to high trading activity, making it an excellent platform for scalping and swing trading.
- Price discovery is efficient, as professional traders dominate the market and adjust odds based on real-time information and data.
- Large volumes can lead to sharper odds, making it harder to find inefficiencies.
Smarkets:
- Odds often lag behind Betfair due to lower activity. This can create some opportunities for bettors who act quickly.
- Slower price adjustments may create opportunities for those looking to exploit inefficiencies.
- The market is more susceptible to sharp movements when high-stakes bets are placed, especially in low-liquidity markets.
Conclusion #6: Betfair provides faster and more accurate odds due to higher liquidity, while Smarkets can offer occasional opportunities.


7. Market Depth and Stake Flexibility

Betfair:
- Deep markets allow traders to place large bets without significantly affecting odds.
- Suitable for strategies requiring significant capital, such as matched betting or laying heavy favourites.
- The depth also means professional traders can hedge bets effectively.
Smarkets:
- Lower depth can limit the feasibility of large trades or aggressive trading strategies. A heavier bettor will feel breaking Smarket’s last line of defence several times.
- Stake limits may be more restrictive, particularly in niche sports or events with limited participants.
Conclusion #7: Betfair excels in supporting high-stakes trading and advanced strategies, while Smarkets suits moderate stakes and conservative approaches.


8. Responsiveness and Support

Conclusion #8: For both exchanges support can feel impersonal most of the times. This goes on for years. It is not their strong point and both of them should invest in their relationship with their cliental basis on a more personalised level.


9. Reliability and Reputation

Betfair: As a long-established market leader, Betfair has built a strong world-wide reputation and is often seen as the benchmark for betting exchanges.
Smarkets: Though newer, it has gained trust for its straightforward pricing and reliable platform. It’s reputation is limited within the British isles, and it lucks global recognition.
Conclusion #9: Both exchanges enjoy a good reputation among casual bettors, but when it comes to bigger bettors, they have a bad record of ''managerial decisions''. One should take into account that extremely sharp action might be not be welcomed all of the times. Bettors who are smarter than algorithms, might not feel welcome when certain points are reached.


10. Regulatory and Tax Implications

Betfair: Operates in numerous jurisdictions and complies with stringent regulations. For professionals, understanding tax obligations based on country-specific laws is critical, especially when earning significant profits.
Smarkets: Also regulated in major jurisdictions, offering similar protections but with fewer international market integrations. Smarkets is more UK centric than Betfair.


11. Restrictions

Both exchanges are keeping a hard line and they comply with national regulations. Thus a huge gap is created in many countries where exchanges are not allowed. Nature hates vacuums and agents came to fill the gap by offering Betfair white labels (like
Orbit, the SharpExch and Piwi247), and betting platforms (like Mollybet, and AsianOdds) where clients can use the exchanges pretty much business as usual.


12. Final verdict

It is evident, a smart bettor should use both exchanges at the same time. This is because Betfair will cover the majority of your needs, while Smarkets will offer some additional opportunities and lower fees, that Betfair could not offer. Betfair offers more stable market mechanics for long-term strategies, while Smarkets may provide short-term liquidity advantages. Professionals should monitor Smarkets’ liquidity closely and use it as a complementary platform to Betfair, leveraging its low commission structure while understanding the potential limitations of artificial liquidity. A smart bettor should always think about the possibility of using an agents, if Betfair and Smarkets is not available in his jusdristiction. However, it is not the scope of this review to compare these exchanges with their white labels.

Betfair is the go-to platform for:
- High-volume trading.
- Arbitrage strategies reliant on deep liquidity.
- Scalping in competitive markets.
- Diverse market opportunities.
Smarkets appeals to:
- Value bettors looking to exploit inefficiencies.
- Traders prioritizing low commissions.
- Low to Medium-volume bettors who can navigate occasional liquidity gaps.
Both platforms can complement each other in a professional bettor's toolkit. Leveraging Betfair’s depth and variety with Smarkets’ cost efficiency can optimise profits across different scenarios.

In any case, It might be puzzling to decide which exchange is best for your needs. Our opinion is that a smart bettor like you, should take the best parts offered by each platform. We stay at your disposal and you can contact us via PM, email or Skype, and let's discuss which service is the best for you. You will be surprised with what we deliver.

very comprehensive review which I loved, have you lookd into matchbook by any chance ? I think its a underrated betting exchange good limits on there and Have recently added into my arsenal.

TheChosenOne wrote: ↑

Thu Dec 12, 2024 11:09 pm

very comprehensive review which I loved, have you lookd into matchbook by any chance ? I think its a underrated betting exchange good limits on there and Have recently added into my arsenal.

Thank you. I will think of it.

very interesting, thanks!

i have a question: if it's not Betfair's liquidity, who makes the markets?
I don't think the huge quantity of money we see in the main markets belongs to private users.

Observing the bots' behaviour, since some time i started thinking Betfair trades and scalps its own markets against its own customers

They use bots to copy and trade against pinnacle on a lot of the betting markets. On some of them they add their own margins too.

thanks, so some Betfair markets are just huge arbing bots... but who owns them?
if Betfair claims they don't add their liquidity in the markets, there must be 3rd parties involved... (or Betfair lies)

in some In-Play markets i see all the time the bots taking money placed in convenient odds (convenient for the bots) without the delay that normal users have. so the bots must belong to Betfair itself or to someone who has privileged account without delay

Last I read betfair had deals with some 3rd party swedish company which 'seeds' markets.

Ste wrote: ↑

Fri Dec 13, 2024 9:30 am

...
Observing the bots' behaviour, since some time i started thinking Betfair trades and scalps its own markets against its own customers

Ste wrote: ↑

Fri Dec 13, 2024 9:59 am

...
in some In-Play markets i see all the time the bots taking money placed in convenient odds (convenient for the bots) without the delay that normal users have. so the bots must belong to Betfair itself or to someone who has privileged account without delay

You are absolutely right, Ste.
I'm pretty sure Betfair is pumping its own liquidity, they're running their own privileged bots, accepting/placing all they want for no time, the T&C are allowing that if you're outside the UK etc. If you want, see the old discussion from that opinion onwards:
viewtopic.php?p=95524#p95524

Ste wrote: ↑

Fri Dec 13, 2024 9:30 am

i have a question: if it's not Betfair's liquidity, who makes the markets?
I don't think the huge quantity of money we see in the main markets belongs to private users.

Observing the bots' behaviour, since some time i started thinking Betfair trades and scalps its own markets against its own customers

The liquidity that you see in Betfair these days, is absolutely nothing to the liquidity we have seen some 15-20 years ago. Because of regulation, Betfair lost a vast chunk of liquidity and volumes. Back then it was ''business as usual'' to see volumes of 120mn in a single Champions League game. Now what is the new normal?

For sure there are bots operating in the platform, but the discussion of their ownership is pure speculation. Of course, it is logic to assume these bots are related to Betfair one way or another, but in the end these will stay as assumptions.

In the past, we have seen discussions about Betfair's licensing and what these licenses are about. Betfair holds more than one license and I m sure their army of lawyers knows very well why they need these licenses.

thanks for the replies, it starts getting clearer.

guess what: to see what they would have answered, i wrote to the Betfair customer service and complained that someone found a way to avoid the Inplay delay and is trading with an unfair and illegal advantage over all the other users.
they answered "other traders have faster servers, connection and equipment than you".

i was tempted to answer "to know that a stake will appear in few seconds and place exactly the same amount in the same price to match it immediately without delay you need a fu***** time machine, not faster servers"