We have seen major developments in sports betting over the past 20 years. Having previously bet using land-based establishments, online betting was introduced in 1996 but it was not until a few years later that we saw the introduction of today’s major online sportsbooks.
Live betting is another fantastic sports betting innovation but one development that has caught the eye recently in the United States is peer to peer betting. Many in the US will be new to peer-to-peer betting and you can find out more on this guide where P2P betting is explained.
Peer to Peer Explained
If you have had a wager against a friend, you have already participated in peer-to-peer betting. For example, if you have bet on the outcome of a football game with a friend, with each of you choosing a team and one of you winning money on the outcome, you have made a peer-to-peer bet. In terms of online sports betting, peer to peer betting often takes place at what are known as betting exchanges. When betting at a betting exchange, there is no sportsbook involved. The bet is made between yourself and another person who wants to have a wager on the same event but is choosing a different outcome. Therefore, a sportsbook is not setting the odds. For a more depth guide and better understanding, you can read this article on P2P betting explained.
Prophet Exchange is an example of a peer-to-peer online sports betting company. The website is live in New Jersey, and it is the users who set the prices, with Prophet Exchange taking a commission on each bet. So, whereas traditional sportsbooks make their money by collecting losing bets, betting exchanges make their money from taking a small commission from each bet. It is like a small fee for hosting the bet and making the transaction. Wagr is another example of a peer-to-peer betting website to recently go live in the United States. Wagr charges a 5% transaction fee on each bet and the app is available on the Tennessee market.
How Does Peer to Peer Betting Work?
There are some terms you must know before you begin betting at an exchange. The most common types of bets at peer-to-peer betting websites are back bets and lay bets. A back bet is when you place a wager on a team to win. In other words, you are backing the team to succeed. On the other hand, a lay bet is when you bet against the team that the other peer has backed. So, if one person places a bet on Chicago Bears to win, that is the back bet. If you think the Chicago Bears are going to lose, you can place the lay bet. You cannot place a lay bet at a standard sportsbook. You can back the opposing team to win but you cannot bet on a team to lose, which is something you can do when peer to peer betting.
Liquidity plays a key role in peer-to-peer betting. Liquidity is the total amount of money currently on a specific market and you can never bet more than the liquidity. This is because a bet can only be matched if there is enough money to cover the opposing outcome. The current liquidity of a market is usually shown next to odds, and you can decide if it is enough for you to make the bet worthwhile.
Will Peer to Peer Betting Be Popular in the US?
Peer to peer betting is extremely popular in other countries, with the United Kingdom being a good example. One of the advantages of peer-to-peer betting is the odds are usually more generous than those found at traditional online sportsbooks. That may not always be the case but as the betting exchange is making a commission from each bet, it is not overly concerned about the value of the odds. The house edge is usually 0% when peer to peer betting but can be as much as 10% or more when betting at regular sportsbooks.
It will be extremely interesting to follow the development of peer to peer betting in the US to see if it becomes as popular as it is in other countries.
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