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Back a horse at another punter's price, lay one you think will lose, or take Betfair SP at the off. Here is how the three UK exchanges we review compare on British and Irish racing.
By Horse.bet Team · Updated · Offers checked
Our reviews
The best betting exchange for racing: three UK options
A betting exchange does away with the bookmaker. Punters trade with one another: one backs a horse to win, another lays it to lose, and the exchange matches the two and takes a commission from the winner. Because no bookmaker is building a margin into the price, exchange odds on racing are often bigger than the bookmakers', and you can bet against a horse as easily as on it.
Three UK exchanges matter for racing. Betfair is the largest, with the deepest markets on British racing and its own starting price, Betfair SP. Matchbook and Smarkets charge less commission but have thinner markets, which shows most at smaller meetings and on outsiders. The cards below carry each exchange's score and new-customer offer with full terms.
Britain's largest betting exchange, with the deepest racing liquidity, Betfair SP and lay betting, 5% commission on net winnings and a Sportsbook paying BOG without an opt-in.
Exchange: £20 back in cash if your first bet loses
New Betfair Exchange customers only. Promo Code VAL225. If your first Exchange bet loses, your stake is refunded as cash, up to £20. The qualifying bet must be placed and settled within 7 days. Only debit card deposits qualify; Apple Pay is excluded. T&Cs apply. 18+. GambleAware.org
Low-commission exchange charging 2% on net winnings, with Matchbook Zero commission-free win bets on racing and a 4.7-rated app, though its live streams are reported as patchy.
New customers only. Sign up with Promo Code REBATE20. Qualifying users receive a 20% rebate on overall qualifying losses recorded in the 30 calendar days from registration, paid as free bets: max £200 rebate per event, £1,000 overall. Free bets expire 7 days after crediting; stake not returned. First deposits by Skrill or Neteller do not qualify. Bets on Matchbook Zero do not count. Only losses on Matchbook Exchange markets count; losses on multiples, Bet Builders, casino or other products are excluded. Full T&Cs apply. 18+. GambleAware.org
Independent exchange trading in Britain since 2009, with 2% standard commission falling to 1% for high-volume users, in-play racing trading and a 4.8-rated iPhone app.
Use Smarkets code COMMFREE to trade with 0% commission for 60 days. New UK, IE & Malta users only. Min. £10/€10 first deposit only using Debit Card or Instant Banking. First deposits by Skrill, Neteller, PayPal or a virtual/prepaid card (including virtual Monzo cards) do not qualify. Code must be entered at registration. 0% commission applies to bets that settle within 60 days of the first deposit; standard commission applies afterwards. Existing SBK sportsbook users and API/trading-software users not eligible. One per person and household. Full T&Cs apply. 18+. GambleAware.org
Most regular exchange punters hold accounts at all three and bet wherever the best price is matched. If you are choosing one, the rest of this guide sets out how they differ on cost, depth and the markets racing punters use.
Costs
Betting exchange commission compared
Exchanges make their money from commission, a percentage of your net winnings on each market. Lose and you pay nothing; win and the exchange takes its cut from the profit, not the stake. Net is the operative word: if you back two horses in the same race and one wins, commission is charged on the race as a whole, after the losing stake is deducted.
Pro tier: 1% per settled bet, opt-in after 1,500 bets or £1m staked in a calendar month
Select tier: 3% for net profit over £25,000 in the previous 12 months
None
What commission costs on a race
Take a £100 net win on a race. Betfair charges £5 at its base rate; Matchbook and Smarkets charge £2. Now a more realistic case: you back two horses at £10 each, one at 6.0, which wins, and one that finishes down the field. Your net profit on the race is £40, so commission is £2 at Betfair and 80p at Matchbook or Smarkets.
The better way to compare is effective odds. Strip the commission from the profit part of the price and a 6.0 shot becomes 5.75 at 5% and 5.9 at 2%. If a bookmaker is offering 11/2 (6.5) with Best Odds Guaranteed, the bookmaker wins; if the best it can do is 9/2 (5.5), the exchange does. Our bet calculator handles the conversions.
Two details are easy to miss. Smarkets customers who opt into the Pro tier, or are moved to Select, lose eligibility for its zero-commission promotions for good. And Betfair's Expert Fee, the successor to the old Premium Charge, applies only to a small number of long-term winners; for most racing punters, the base rate is the whole story. Smarkets offers new customers 60 days at 0% commission with Promo Code COMMFREE, while Matchbook returns 20% of net exchange losses over the first 30 days as free bets; both are set out on the cards above.
Depth
Exchange liquidity on UK horse racing
Liquidity is the money waiting to be matched at each price, and on an exchange it decides everything. The odds on screen are only half the story; the figure beside them shows how much you can actually get on. A lay price of 5.0 with a few pounds behind it is not a price at all if you want to lay for £50.
Racing markets follow a familiar pattern. They open thin in the morning, with wide gaps between the back and lay prices, and fill steadily towards the off as money arrives. A televised Saturday handicap, or a feature race at the Cheltenham Festival or Royal Ascot, will absorb sizeable bets on every runner by the time the stalls open; a midweek maiden at a small track may never get there, particularly on the outsiders.
Betfair is the largest exchange in Britain, and at busy times bets on British racing are matched almost immediately. Reviewers of Matchbook and Smarkets agree that their racing markets are thinner, most noticeably away from the main British and Irish meetings, so larger stakes and lays on outsiders may sit unmatched or move the price. Neither publishes matched volumes. In practice the cheaper exchanges suit punters betting near the off in well-traded races; anyone placing bigger bets early, or laying at small meetings, will usually end up on Betfair.
Starting price
Betfair SP explained
Betfair Starting Price is the exchange's answer to the industry SP. Instead of being drawn from the bookmakers' on-course prices, which carry their margin, it is calculated at the off by matching every SP back request against the SP lay liabilities and any unmatched exchange bets in the market. No margin is built in, though commission is charged on winnings in the usual way.
Before the race, Betfair shows projected Near and Far prices, a guide to where BSP is likely to land.
Minimum stakes are £1 to back at BSP and a £10 liability to lay.
Limit on close lets you set a floor on the price you will back at, or a ceiling on the price you will lay at.
Unmatched bets can be set to convert to BSP at the off; for a lay, the liability must be £10 or more.
Not available on ante-post markets, and Betfair's help centre says SP bets can be placed on desktop only.
BSP is useful for anyone who cannot watch the market: you get a fair, margin-free price without having to take an early one. The catch is the same as with industry SP. You do not know the price until the race is off, and there is no Best Odds Guaranteed to fall back on.
Each-way
Place markets and each-way betting on an exchange
Exchanges handle place betting differently from bookmakers. Instead of one each-way bet, each race has a separate place market alongside the win market, and you can back or lay a horse in either. That means you can back a horse to place without backing it to win, or lay a short-priced favourite to finish out of the frame.
The number of places follows the field size. On Smarkets, for example, races of five to seven runners pay two places and handicaps of 16 or more pay four, unless the market name says otherwise. Matchbook, too, runs separate win and place markets rather than each-way bets. When a horse is withdrawn, exchanges apply reduction factors to matched bets, their version of Rule 4.
Check the place terms on the market name before every big-field race, and above all before the Grand National, when bookmakers compete with extra places. On those days a bookmaker paying six or seven places can beat the exchange place price on a fancied outsider. Our each-way calculator will show the bookmaker's side of the comparison.
Step by step
How to lay a horse on a betting exchange
Laying a horse means betting that it will not win. You take the bookmaker's role: if the horse loses, you keep the backer's stake; if it wins, you pay out their winnings. This is how to do it.
Open the win market for the race and find your horse. Lay prices sit beside the back prices; on Betfair they are shaded pink.
Choose your price. Take the best lay price on offer to be matched at once, or request a lower one and wait for a backer to accept it.
Enter your stake. This is the backer's stake you are accepting, and it is what you win if the horse loses.
Check the liability. The exchange shows what you lose if the horse wins: the stake multiplied by the odds minus one. Lay £10 at 5.0 and your liability is £40. That sum is held from your balance until the race is settled.
Place the bet and confirm it is matched. Unmatched bets can be cancelled before the off, or on Betfair converted to BSP.
Collect or pay. If the horse is beaten, you win £10 less commission. If it wins, the £40 liability goes to the backer.
Liability grows quickly with the price. Laying a 20.0 shot to the same £10 stake puts £190 at risk, which is why experienced layers tend to oppose short-priced horses and treat outsiders with caution. Laying also opens the door to trading: back a horse early at 8.0, lay it later at 5.0 once the market has come your way, and you lock in a profit whatever happens in the race.
Laying puts your liability, not your stake, at risk. Set a deposit limit and decide your maximum liability before you start. 18+. For free, confidential support visit GambleAware.org.
Comparison
Exchange vs bookmaker: when Best Odds Guaranteed wins
Best Odds Guaranteed is the bookmakers' strongest argument against the exchanges. Take a price in the morning with a BOG firm and, if the horse drifts, you are paid at the bigger starting price. No exchange offers that: you are matched at the price you took, and that is that. Betfair's Sportsbook BOG, for instance, does not extend to its Exchange.
When a bookmaker is the better bet
You bet in the morning and want protection against a drift.
The race carries extra places, which no exchange matches.
Your stakes are small and you want free streams, racing promotions and a simple bet slip.
You want each-way multiples, Lucky 15s or forecasts at fixed odds.
When an exchange is the better bet
You want to lay a horse, trade a position or back to place only.
You bet close to the off, when exchange markets are deepest and the price is known.
The horse is a bigger price, where bookmakers' margins are widest and the gap after commission is often in the exchange's favour.
You have been restricted by bookmakers. Smarkets says it welcomes winning, matched and arbitrage bettors, though its Select tier charges the most profitable more.
The sensible approach is to use both. Check the best bookmaker price on our today's racing page, convert the exchange price to effective odds after commission, and take whichever is bigger. Our horse racing betting sites guide compares the BOG terms on the bookmaker side.
Hybrids
Exchanges with sportsbooks: one account, both ways to bet
Two of the three exchanges sit alongside a conventional sportsbook, which lets you switch between exchange prices and bookmaker concessions without moving money.
Betfair runs its Exchange and Sportsbook in one account and one app. The Sportsbook pays Best Odds Guaranteed on all UK and Irish racing from 8am with no opt-in, though only on stakes totalling £25 or more and capped at £1,000 a day, and runs Extra Places on selected races. Live racing pictures need a £1 Sportsbook bet or a £2 matched Exchange bet on the race. The Sportsbook shares its licensee with Paddy Power.
Smarkets owns SBK, a fixed-odds sportsbook that shares the same wallet and takes its prices from the exchange. SBK does not offer Best Odds Guaranteed, so it suits punters who want sharp fixed odds rather than concessions.
Matchbook is exchange-first, but it adds multiples and a Bet Builder for those who want more than a single, and Matchbook Zero for commission-free win bets on racing.
Safety
Are betting exchanges legal and safe in the UK?
Yes. All three exchanges we review are licensed by the UK Gambling Commission. The Betfair Exchange is run by TSE Malta LP under account number 39561, part of Flutter Entertainment. Matchbook is operated by Triplebet Limited under account 39504; the Commission part-suspended its licence in February 2020 and Matchbook briefly closed, before returning to full operation. Smarkets is run by Smarkets (Malta) Limited under account 39173 and has taken bets in Britain since 2009.
Your counterparty on each bet is another customer, but the exchange settles every bet, so you are paid by the operator rather than by the punter on the other side. Every licensed exchange must offer deposit limits, time-outs and self-exclusion, and must take part in GAMSTOP. For the bookmaker side of the market, see our UK bookmaker reviews.
Questions
Frequently asked questions
What is the best betting exchange for horse racing?
Betfair, for depth. It has the most liquidity on British racing, plus its own starting price, Betfair SP. Matchbook and Smarkets charge less commission and suit punters betting near the off in well-traded races.
Which betting exchange has the lowest commission?
Matchbook and Smarkets both charge 2% on net winnings as standard, against Betfair's 5% Market Base Rate. Smarkets drops to 1% for high-volume Pro customers, and Matchbook Zero charges nothing on racing win bets.
What percentage does Betfair take?
UK customers pay a 5% Market Base Rate on net winnings in each market, with discounts available through Betfair Points or My Betfair Rewards. A separate Expert Fee applies to a small number of long-term winners.
Is Smarkets better than Betfair?
It is cheaper, at 2% against 5%, and its app is highly rated. Betfair has far deeper racing markets and Betfair SP. Many punters use both and bet wherever the best matched price is.
Does Best Odds Guaranteed apply on a betting exchange?
No. Exchange bets are matched at the price you and another customer agree. Betfair's Sportsbook offers BOG, but it does not apply on the Exchange.
How much can I lose when I lay a horse?
Your liability: the lay stake multiplied by the odds minus one. Laying £10 at 5.0 risks £40; at 20.0 it risks £190. The exchange shows the figure before you confirm.
Are betting exchanges legal in the UK?
Yes. Betfair, Matchbook and Smarkets all hold UK Gambling Commission licences, and each must offer safer gambling tools and take part in GAMSTOP self-exclusion.
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