When we talk about having a bet, the majority of people – even those who are regular bettors – would imagine taking some fixed odds at a traditional bookie, whether that be online or at a shop.
There are other ways to bet though, although you wouldn’t think so by looking at the recent figures from the UKGC.
They show how much money is taken at fixed odds bookies compared to the likes of betting exchanges or pool betting like the tote, and the numbers are indisputable.
In Britain we love a bet, but we don’t tend to stray far from the well trodden path in terms of how we bet (or what we bet on for that matter).
Yet both exchange betting and pool betting can offer better payouts than fixed odds bookies, so why are they so neglected by the betting public?
How Many People Use Betting Exchanges?
Not a lot in the grand scheme of things.
In 2022, online betting brought in £2.364 billion in revenue in the UK, yet of that, just £124 million went through a betting exchange – that’s just 5.3%.
The numbers seem to be on the decline too, albeit very slowly.
The covid pandemic corrupts the latest few years of data, but even before that, you can see from the list below how things were moving:
- 2015/16 – £152 million
- 2016/17 – £172 million
- 2017/18 – £169 million
- 2018/19 – £165 million
- 2019/20 – £161 million
- 2020/21 – £136 million
- 2021/22 – £124 million
Yet in spite of this down trend for exchange betting, the overall revenue for online sports betting has been increasing each year for the most part.
There was a peak last year of £2.644 billion, during which just £136 million came from the online exchanges, that’s 5.1%, so it was actually worse in percentage terms.
Considering that the exchanges once had fixed odds bookies quaking in their boots, this is a surprising set of data to see.
There are clearly a core set of bettors who use the exchanges as a first port of call, whenever there is liquidity for what they want to bet on anyway, but for most average punters, perhaps it’s just a bit too scary?
How Many People Use Pool Betting?
The big difference between pool betting (or pari-mutuel betting) and exchange betting, is that you can place pool bets online or in person at a bookies’ shop.
This makes looking at the figures slightly more difficult but let’s dig in nonetheless.
In the financial year 2021/22, the combined revenue of online and in shop sports betting was £4.492 billion.
Of that, £21.09 million was bet on pool betting in store, and £24.79 million online; that’s a total of £45.88 million which is a miniscule 1.02% of all money bet in that time period.
This has also been on a down trend, most significantly in the offline sector, with a huge drop occurring around 2016 when average pool betting revenues in bookies went from around £130 million per year to £50 million, then dropped again to the mid twenty millions.
The total revenue and percentage/spend for pool betting across both online and offline revenues are as follows:
It’s true that overall betting revenues have gone down, but the percentage of those revenues has also gone down, so pool betting is clearly falling out of favour, despite the big draws like the Scoop6 which can sometimes pay out 7 figures.
The huge drop in pool betting in store is largely to blame for this (you can see it from 15/16 to 16/17 in the table above), and this may have something to do with Betfred losing exclusivity to off course tote betting, and the new Tote (which is online only) opening in 2019.
Why do People Prefer Fixed Odds Betting?
The answer to this is probably quite simple.
I would say that fixed odds betting is the most easily accessible; it’s not hard to understand and the learning curve is small.
It’s not actually difficult to make a pool bet or an exchange bet either, but it takes a little effort to understand how they work, and in the modern day when everyone wants instant results and has no patience for learning, perhaps they would rather just stick with what they know?
The bookies themselves also have more incentive to advertise than those running the exchanges/pools, because they have a margin built into every single market they offer that they can tinker with as they please.
Pools and exchanges take a fixed commission, so their income relies on volume and their options for offers and such like are much more limited.
Naturally then, customers are drawn to fixed odds bookies much more effectively, with other ways to bet not able to compete on the marketing side of things.
There is also a degree of certainty with fixed odds betting.
Obviously, you don’t know whether you will win or not, but you know what you stand to win and what you stand to lose; with pool and exchange betting this is not true.
My take is that people prefer the easier option, and the option that makes them feel the most secure.