Racing: How a punter can become a bookmaker

Betting on exchanges is completely different from any other medium of betting and is the latest tool for punters. Since starting in June 2000, Betfair, the biggest exchange firm with 90 per cent of the market, has taken on over 100,000 clients worldwide and now carries in excess of £50m in bets a week.

Betting on exchanges is completely different from any other medium of betting and is the latest tool for punters. Since starting in June 2000, Betfair, the biggest exchange firm with 90 per cent of the market, has taken on over 100,000 clients worldwide and now carries in excess of £50m in bets a week.

A betting exchange is an on-line betting medium where punters bet against each other, and have the option of backing (to win) or laying (to lose) a horse. The exchange acts as a broker and takes out a commission for providing the service.

Each client must have an account and money deposited with the exchange firm - there is no betting on credit at all. Most punters bet via a computer and internet connection, although telephone betting is available and each client has their own specific username and password. The important, almost revolutionary, aspect of exchanges is that a punter can choose whether to back a horse or to lay it and the odds are shown in decimal form. For example 2-1 is shown as 3 because the stake level of 1 is included and 6-4 is shown as 2.5. To reach that figure divide 6 by 4 and add the stake unit of 1.

To back is the traditional role of the punter in that they are betting on a horse to win, and laying a horse is the traditional role of the bookmaker, in that they want it to lose. Exchanges allow all users to be punter or bookie depending on their opinion.

It works in a similar fashion to the stock exchange where traders buy or sell a company's stock, and the price moves according to supply and demand. With the stock exchange, if there are more buyers prices increase; more sellers, it drops. With horses if there are more buyers odds shorten; with more sellers, prices lengthen. If a horse is described as having "drifted on the exchanges" it means its odds have lengthened as it is unfancied and is being laid.

A race screen will show all runners and both back and lay columns. The best prices and sums of money available are highlighted and alongside are the next best prices offered.

If you wish to back a horse, then you click on the "back" box and an insert screen - "deal ticket" - appears for the details.

In the appropriate box you insert the sum of money you wish to bet. Similarly if you lay a horse you click the "lay" box and insert how much you wish to lay, while remembering that your liability may be more. Laying a horse at 2-1 for £50 has a liability of £100 if it wins (2x50).

Any price can be offered and cancelled at the press of a button, unless it has already been matched.

All the betting is anonymous and the money at each price is pooled on a first-come-first-served basis.

MARKET MOVEMENTS: TRACKING BALLINGER RIDGE

How the prices fluctuated on Ballinger Ridge in the 15:20 at Lingfield yesterday:

In the table below the figure in the first column (BACK) is the price available for punters wishing to back Ballinger Ridge to win (at 3pm, for example, the price available was 1.72, i.e. a £10 stake would earn a profit of £7.20). The second column (LAY) is the price offered by those Betfair account-holders willing to accept bets on Ballinger Ridge (at 3pm, for example, the price offered was 1.73, i.e. the account-holder would lose £7.30 on a £10 bet if Ballinger Ridge won, or would win £10 if Ballinger Ridge lost).

BACK LAY

3pm	1.72	1.73
3.10pm	1.78	1.79
3.20pm	1.82	1.84

Money staked on race: £795,596

Money staked on Ballinger Ridge: £666,823

Ballinger Ridge last Tuesday went from 6-4 (2.5) to 3-1 (4.0)