Betting Exchanges, Sportsbooks & Wagerr
There are plenty of different options available for you to bet on, but they aren't always equal. They come with trade offs and it's important that you know the difference between them.
There are plenty of different options available for you to bet on, but they aren't always equal. They come with trade offs and it's important that you know the difference between them. In our article Wagerr the Blockchain Bookie we looked at how revolutionary the Wagerr model is. In this article we want to give you more context of the existing models in the market today, namely a betting exchange vs a sportsbook and why Wagerr is superior to them both.
A Quick overview
A betting exchange allows gamblers to bet peer-to-peer whilst betting with a bookmaker pits the punter against the bookie. Wagerr is more akin to a bookmaker but being powered by a blockchain there are some unique differences that we believe makes Wagerr superior to both.
The Exchange Model
In the Exchange model, A user can “lay” a bet, which means that they can bet against an outcome happening. This model removes the sportsbook from the equation and allows users to bet against each other. Usually the platform charges a small fee to sustain itself, much smaller than a sportsbook. There are a few crypto options that do this, Degens.com is an example of this they charge a low fee of 0.5%. Sounds great right?
The exchange model is great (in fact we plan to build something similar), but the exchange model is not without its trade offs. One of the issues betting exchanges face is finding enough users to “lay” & “back” bets across all the sporting events. This is usually a tough challenge without a significant marketing budget. Even with a big marketing budget it can be difficult to attract enough people.
With few users and little liquidity on betting exchanges it forces gamblers to limit their bets to only what other users are willing to accept or if the gambler is really wanting to bet they are forced to accept odds that can be much worse than what they could have got from a traditional sportsbook. This is where the value of Wagerr's no limit betting comes into it's own.
Wagerr actually means no limits
Recently, Augur has launched their version 2 update, this was promoted with the slogan “no limit betting”. What they actually mean though is “you are only limited by the willingness of another user accepting your bet”. Which turns out is pretty important and very different to actual no limit betting. Wagerr is the only bookie in the world that does not limit betting, no matter the size. This is a real innovation.
In the traditional sportsbook model the sportsbook is the counter-party to the bet every time. So the sportsbook will “lay” odds for users to “back”.
Generally, sportsbooks will accept all bets, meaning that users have a fairly good experience by being able to bet reasonable volume into the price they are offered. However, A growing trend is for sportsbooks to limit good players and refuse their bets.
Sportsbooks risk their own capital and therefore will restrict players, limit players bet sizes, or even delay withdrawals in order to protect their capital, otherwise they could go broke. To ensure profitability, all sportsbooks charge a fee for their services. Most sportsbooks are somewhere in the range of 8-12%, some books are even higher.
Seems excessive in comparison to exchanges right? But here’s how it really works.
The fees sportsbooks charge are built into the odds. So the odds that you see are the odds that you get. The example below highlights the issue with low liquidity exchanges. Even with a low fee the after fee odds of Wagerr are more competitive because users on the betting exchange are unwilling to offer better.
The good news for punters is that odds fluctuate so you can scan across both and choose the odds best for you. As a punter you just need to be mindful of the liquidity and the 'slippage' you may experience on the odds.
The Wagerr Magic
Wagerr is a superior model to both. It offers unlimited liquidity & payout guarantees which can only be achieved using blockchain technology. This means that if you want to bet large amounts on Wagerr you can! And you can sleep safe at night knowing that you are betting against a blockchain so your payout is guaranteed!
Blockchain technology also keeps Wagerr secure and transparent. Each bet is verified with cryptographic security and each transaction is recorded on the public ledger. You can see this on here.
And possibly the best part about Wagerr is the fact that you can 'be the house'. Become an Oracle to earn income from the Wagerr betting volume.
In time Wagerr will build out a betting exchange, which will mean that you get low fees as well as unlimited betting liquidity!