Exchange commission is the fee a betting exchange charges on your winnings. Instead of building a margin into the odds like a bookmaker, an exchange such as Betfair, Smarkets or Matchbook takes a percentage of your net profit on each market. This guide explains how exchange commission is worked out, how it changes the sums on a back bet, a lay bet and a trade, and how to compare exchanges fairly.
If you’re new to laying, read our guide to greening up a trade first.
Read the transcript
Exchange commission is the fee a betting exchange charges on your winnings. Here’s how it’s worked out on a back bet, a lay bet and a trade, and how to compare rates. Instead of building a margin into the odds, an exchange takes a percentage of your net profit in each market. It doesn’t charge on your stake, and if you lose overall in a market, you pay nothing. One major exchange charges up to 5% as standard in the UK, and several others advertise 2%. Rates change, so read your exchange’s current terms. For example, you back a team for £20 at 3.0, and it wins. That’s £40 profit. 5% commission takes £2, so you keep £38. So 3.0 at 5% pays the same as 2.90 at a bookmaker. At 2%, it’s worth 2.96. The gap grows with the odds, so commission matters more on longer prices. When you lay, you’re the bookmaker. Lay a £20 stake at 3.0, and your liability is £40. If the team loses, you win £20, minus 5%, so £19. Then on a trade, back £20 at 3.0, and lay £24 at 2.5. That locks in £4 either way. You pay 5% just once, 20p, and keep £3.80. That looks small, but scalpers make hundreds of trades, so commission adds up. Always record your profit after commission, because a method that wins before it can lose after it.
The short version
- Exchanges charge commission on your net winnings in a market, not on your stake.
- If you lose overall in a market, you pay no commission on it.
- Betfair’s standard UK rate is up to 5%. Several other exchanges advertise 2%.
- Commission matters most on small, frequent profits such as scalping.
How exchange commission works
On an exchange, you bet against other customers. The exchange doesn’t take a side, so it earns money by charging commission on winning positions. It works out your profit or loss across all your bets in one market, such as the match odds for one game, and charges its rate only if that figure is positive.
That has a useful consequence for traders. If you back and lay the same team in one market, the exchange nets the bets off first. You pay commission once, on the overall profit, rather than on each bet.
Exchange commission on a back bet
Worked example
You back a team for £20 at 3.0 on an exchange charging 5% commission, and it wins.
- Gross profit: £20 × (3.0 − 1) = £40.
- Commission: 5% × £40 = £2.
- Net profit: £38.
If the team loses, you lose your £20 and pay no commission.
A quick way to compare this with a bookmaker is the effective price: 1 + (3.0 − 1) × 0.95 = 2.90. So exchange odds of 3.0 at 5% commission pay the same as 2.90 at a bookmaker. At 2% commission, the same bet is worth 2.96.
Exchange commission on a lay bet
When you lay, you’re acting as the bookmaker. If the selection loses, you win the backer’s stake, and commission comes off that.
Worked example
You lay a team for a £20 backer’s stake at 3.0, at 5% commission.
- Your liability: £20 × (3.0 − 1) = £40.
- If the team loses, you win £20, minus 5% = £19 net.
- If the team wins, you lose your £40 liability, with no commission.
Exchange commission on a trade
Suppose you back at 3.0 for £20 and later lay at 2.5 to green up. The green-up lay stake is £20 × 3.0 ÷ 2.5 = £24, which locks in about £4 whichever team wins. Because the back and the lay are in the same market, they’re settled together. You pay 5% of the £4 market profit, so 20p, and keep £3.80.
That 20p looks small, but scalpers and in-play traders make many small trades. Over hundreds of trades, commission can take a big share of total profit, which is why many traders look for lower rates or loyalty discounts.
Comparing exchange commission rates
| Back at | Effective odds at 5% | Effective odds at 2% |
|---|---|---|
| 1.50 | 1.475 | 1.49 |
| 2.00 | 1.95 | 1.98 |
| 3.00 | 2.90 | 2.96 |
| 5.00 | 4.80 | 4.92 |
| 10.00 | 9.55 | 9.82 |
The gap grows with the odds, so commission matters more on longer prices. When you compare an exchange price with a bookmaker’s, always use the effective odds after commission. Our fair odds calculator and guide to odds shopping show how small price differences add up.
Rates also change. Betfair, for example, sets UK commission through its rewards packages, and some exchanges charge extra fees to their most profitable customers. Read your exchange’s current commission terms before you trade often.
Exchange commission and your records
Always record profit after commission. A trading method that looks profitable before commission can lose money after it. Our guide to keeping betting records shows a simple layout, and our football trading hub links to every trade guide.
Before you open an account, check the exchange is licensed by the Gambling Commission.
Related guides
18+ only. Betting should be fun, and every bet can lose. Set a budget you can afford to lose and stick to it. For free, confidential support, visit BeGambleAware.org or call the National Gambling Helpline on 0808 8020 133.