Customers bet against each other not against Betfair.

There's no bookmaker telling you what odds you have to take. Think of it as like two mates in a pub with opposing views on a game and having a bet.

Betfair works like an impartial barman in the pub who holds the money until he gives it to the winner.

Betfair give you all the guidance you need, and we encourage winners! We don't ban or cut back as is the case with many bookies who limit stakes or close accounts if anyone 'dares' to beat them. It doesn't matter to Betfair, because we take no position in the markets.

People say Betfair gives better odds, why?

Studies over several years have shown that Betfair gives 20% better odds on average due to competition and lower margins.

Competition means a better deal

Competition in any walk of life leads to a better deal, and with over three million registered customers, Betfair is extremely competitive.

At any given moment thousands of people worldwide are competing against each other to offer better odds on their opinion in order to have a bet.

This often means the odds are better than those set by a traditional bookie.

Advertise a poor price on the site and it's unlikely your bet will be matched as somebody will see the value in improving the offer. Just like if you try to sell your car for £10,000 when it's really only worth £5,000.

Lower margins

Another reason for better odds is because the bookmaker is taken out of the equation. This means you're not subject to their five, 10, 20 or even 50% margins.

The value will shine through more on markets with more selections - racing, football premierships, golf tournaments etc, where bookies traditionally make their 'bread and butter'.

Backing and laying

On Betfair you can back and lay.

To 'back' a selection means you think it will happen, like you would do with a traditional bookie.

Or you can take the opposing viewpoint and 'lay' if you think your selection will not happen (i.e. won't win).

Every fixed-odds bet, whether it's with your local high street bookie, a betting exchange or even two mates in a pub, requires a backer and a layer, you've probably just never thought of it that way.

Imagine two guys betting a pint on the Merseyside derby - one cheering Everton, one cheering Liverpool. The Everton supporter is automatically opposing, or laying, Liverpool if he decides to go with his heart. Likewise the Liverpool fan backs his team for a pint, but is laying Everton in the same process.

Lay betting is the other half of the deal from a back bet. Both are bets but opposing views. Without one, you can't have the other - it's like trying to sell your house. Until someone is prepared to buy it, then you don't have a sale.

Find out more about lay betting.

Why are there so many different prices?

If there was only one set of prices available, that'd be rather boring. The excitement of being in the betting ring is trying to capture the best price available, so the more competition you see, the better the deal gets for punters.

The full Betfair screen shows three back prices and three lay prices. If you wish to simplify that to just one set of back and lay odds, untick the Market Depth box above the market.

If you wish to go even further and reduce the market to only back prices, then untick Back & Lay.

It's important to note that every price you see on the Betfair screen is a live offer. There is no history there at all, every offer is in the queue to be taken with the coloured columns highlighting the best odds currently available - the highest of the 'to back' offers and the lowest of the 'to lay' offers.

If you are backing, you want the best price you can get - higher reward for the same risk. When laying, you want the lowest price you can get - lower risk for the same reward.

Why do the prices keep changing?

This is one of the best, but also most confusing, features of a betting exchange.

Since Betfair is a community of punters competing against each other rather than a bookmaker writing the odds in chalk on a board, like in the old days, the markets will keep changing.

The nearer to the beginning of an event it is, the more likely the prices are to be constantly fluctuating. That means more opportunity for you to get better odds, but it also means you can miss out on a bet if the odds go against you.

Horse races in particular are very volatile, but the same can apply to any event which goes in-play.

Betfair is like a stock market

As we've mentioned before, Betfair is like a stock market, and prices can move very quickly.

On the web page, the normal refresh rate when logged in is around 30 seconds, but in reality, the server could be matching hundreds of bets per second, so you don't always see every offer on screen or price move.

They could be snapped up and gone by the time your screen refreshes, even if you are clicking the Refresh button regularly.

To make sure you get matched, you can always ask for a lower price (when backing).

The Betfair system will always match you the highest offer available - so if you ask for 2.6 and at the instant your bet reaches the Betfair server 2.8 is available, you will secure the better price (2.8).

This also works for laying, but the other way around - layers always want the lowest price they can (less risk), so ask for higher and the Betfair server will match you at the best available, in this case the lowest odds.

You can click on all of the boxes across the Betfair screen, you don't have to always click on the coloured column for best price. The Betfair server always uses Best Price execution logic (takes the best price available).

If the odds move against you, you may end up with an unmatched or partially matched bet.

One customer bets on an outcome to happen (backing), another bets on an outcome not to happen (laying).

We all make statements to friends like this every day. What you're actually doing is 'laying a bet': betting something won't happen.