Quick answer
Betting exchange: A betting exchange matches customers who back an outcome with customers who lay it (bet against it), charging commission on net winnings instead of building a margin into the odds.
Also called: peer-to-peer exchange, back and lay
Explained, with an example
On Betfair Exchange, laying means taking the bookmaker's side: you win the backer's stake if the outcome does not happen [1]. The exchange earns a commission on net market winnings [2]. Because commission lowers the price you keep, Odds-API.io reports netOdds for exchange and prediction-market legs in its arbitrage data [3]. Prediction markets with an Order book work in a very similar way.
Formula
net back odds after commission c = 1 + (odds − 1) × (1 − c)Try it: tools and tutorials
Frequently asked questions
What is a betting exchange?
A betting exchange matches customers who back an outcome with customers who lay it (bet against it), charging commission on net winnings instead of building a margin into the odds.
About this guide
Pred-Data publishes independent, source-linked explainers about prediction markets and the AI tools used around them. Every factual claim on this page links to a primary or reputable secondary source, checked on the date shown above. We do not run a trading venue, take bets, or give personal advice.
Author: Ken Lin · Corrections: if you spot an error, we review it and date-stamp the fix.
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Sources
- Exchange: What is a Lay bet? — Betfair Support, accessed 2 Nov 2026
- Exchange: What is Commission and how is it calculated? — Betfair Support, accessed 2 Nov 2026
- Arbitrage Bets guide (formula, response format, limitations) — Odds-API.io docs, accessed 2 Nov 2026