Market Maker vs Market Taker: Should Bettors Use Exchanges or Traditional Books?

[SharpEddie47]

Question for the group: what's the optimal platform structure for serious betting?

I've been thinking about market makers (traditional books like DraftKings, FanDuel) versus market takers (exchanges like Betfair) and the fundamental differences in how they operate.

Traditional books set lines and take both sides. Exchanges let you BE the bookmaker by laying bets. Completely different models with different advantages.

What's everyone using and why?

 

[oli_sussex]

Worked at exchange for two years. Can explain structure.

Traditional books: house sets price, takes risk, limits winners.
Exchanges: peer-to-peer market, users set prices, exchange takes commission only.

Exchanges mathematically superior for serious bettors. No winner limiting.

 

[TaffyTipster]

Brighton knows his stuff.

I've been using Betfair for years mate.

Laying bets is a game changer.

Public hammers favourites, you lay them at inflated prices.

Can't do that with traditional bookies.

 

[ParlayPrincess_88]

Wait what does "laying" mean? Like betting against something?

 

[oli_sussex]

Correct. Laying = betting something WON'T happen.

Example: Lay Chiefs at 1.50 odds. If they lose, you win. If they win, you pay.

You become the bookmaker.

 

[ParlayPrincess_88]

Omg that's so cool! Can you do that in America?

 

[SharpEddie47]

No Princess. Betting exchanges aren't legal in most US states.

Americans stuck with traditional books which is a significant disadvantage.

 

[FadeThePublic]

This is why US bettors are at a structural disadvantage compared to Europeans.

You guys can lay bets on exchanges. We're stuck with DraftKings limiting us to $47 after three wins.

 

[Klaus]

European advantage significant.

Betfair commission approximately 5% on net winnings.
Traditional books build 4-5% margin into every line.

But Betfair commission only charged on profit. Traditional book margin charged on every bet.

 

[CoachTony_Bets]

Can someone explain the actual difference in pricing models? I don't fully understand how exchanges work economically.

 

[oli_sussex]

Traditional book: Sets Chiefs -3 at -110. Takes both sides. Profits from juice regardless of outcome.

Exchange: Users offer Chiefs -3 at various odds. You accept someone else's price. Exchange takes 5% of winner's profit only.

Key difference: exchange has no position. Just facilitates transaction.

 

[TaffyTipster]

And because exchange has no position, they don't care if you win.

Traditional bookie wants you to lose.

Exchange wants volume and doesn't give a shit who wins.

That's why they don't limit winners.

 

[SharpEddie47]

Exactly Taffy. The incentive structure is fundamentally different.

Traditional books are your opponent. Exchanges are neutral facilitators.

 

[Klaus]

However exchanges have limitations.

Liquidity issues in smaller markets. Cannot always get desired stake matched.

American sports on Betfair have limited volume. Bundesliga has excellent liquidity.

 

[oli_sussex]

Klaus correct. Liquidity is exchange weakness.

NFL major markets: good liquidity.
College football small games: poor liquidity.

Can't bet $10,000 on obscure market. Money won't get matched.

 

[ParlayPrincess_88]

What's liquidity mean in this context?

 

[SharpEddie47]

Liquidity = available money to bet against.

If you want to bet $1000 but only $200 is available on the other side, you have a liquidity problem.

 

[FadeThePublic]

This is why I use multiple books. Pinnacle for sharp lines, DraftKings for promos, offshore for higher limits.

Can't rely on one platform.

 

[CoachTony_Bets]

What's special about Pinnacle? I see that name mentioned a lot.

 

[SharpEddie47]

Pinnacle is the sharpest book in the world. They welcome winners, have high limits, and their closing lines are the best predictor of actual outcomes.

If you beat Pinnacle's closing line consistently, you genuinely have an edge.