Smarkets might not be the world’s most popular betting exchange, but this company has big hopes. The exchange is planning to take over the market by charging a low commission fee. We’re now going to discuss everything about Smarkets commission. Keep on reading to find out how high it is and how you can reduce it.
Top 3 Key Takeaways:
To properly understand Smarkets commission, you need to know how the platform works. Smarkets is a betting exchange, which means that it’s different from traditional sportsbooks. Instead of betting against a bookmaker, players get to bet against each other.
When using a betting exchange such as Smarkets, a player has the luxury to choose whether to back an outcome, or to lay it. Backing something practically, means betting that it’s going to happen. Laying a bet means taking the role of the bookmaker – you’re going to win money only if the outcome doesn’t happen.
This makes Smarkets an intermediary between bettors. The betting exchange has no interest in which player is going to win as it’s not involved in the wager directly. Instead, it earns its money by charging a commission. No matter what happens with the bet, Smarkets is going to get its share.
Smarkets is still a relatively new betting exchange, especially when compared with the leading exchanges such as Betfair and Matchbook. But, its popularity is growing rapidly. The main reason for that is that Smarkets charges a very low commission.
At the moment, Smarkets charges only 2% on net winnings. This means that you’re going to be charged a fee only if your bet is a winning one. If it’s not, you’re not going to be charged anything. This makes Smarkets a very attractive choice for the players doing matched betting.
If your focus in matched betting is to clear the bonuses at bookmakers, it means your laid bets at betting exchanges are not going to win too often. So, not being forced to pay a commission fee on losing bets is definitely a major plus for Smarkets.
At the same time, being charged only 2% on your winning bets is not going to take a big toll on your overall profits. And the best thing is that you can reduce the commission even more.
There is a possibility to reduce the commission fee to 1%, but only if you’re a high-roller or a very active bettor.
In order to get the commission reduction, you need to qualify for Pro Tier. To do that, you need to either create a betting volume of over a million or make more than 1500 in one calendar month.
If you’re a player who is doing matched betting, making over 1500 might not be that hard to achieve. There are dozens of bookmakers that are giving away welcome bonuses to new players. Plus, many of them are offering additional bonus deals, such as the deposit-reload bonus. And many of those bonus deals come with certain wagering requirements.
What this means is that a serious player can easily make a few hundred bets per month just to clear the bonuses. Plus, they might need to do some “Dutching” in order to make sure their accounts won’t get gubbed by bookmakers.
If you’re not familiar with Dutching, it’s a method that ensures you’re going to look like a regular player in bookies’ eyes. But, in fact, you’re going to be doing matched betting to take advantage of their bonuses.
How it works is that you make each-way bets in a way that you will probably lose at the bookmaker, while winning at the betting exchange. Basically, what you have to do is bet on a huge underdog at the bookmaker, while laying the same bet at an exchange.
This way, you will probably lose your bet at the bookmaker, thus making yourself appear just like any other bettor. But, that laid bet will prevent your overall profits from suffering.
If you do Dutching as a part of your matched betting strategy, the number of bets you make on a monthly basis can go up drastically. It wouldn’t be surprising if you managed to get to the 1500-bet landmark.
If you manage to qualify for Pro Tier, you will get a commission of 1%, which will be charged on all of your bets. This includes not only your winning bets, but losing ones as well.
The Smarkets commission structure is pretty straightforward when it comes to winning bets, but how is it done on losing ones?
It’s based on the amount of money you lost. If you’re backing a bet and it loses, you will be charged the 1% commission on your stake.
When it comes to lay bets, if you lose, you will be charged a fee of your liability, that is, on the amount you need to pay out to the winning players. Your total loss in that case would be a liability of + 1% commission on liability.
For example, if your liability was €100, your commission would be €1. In total, your profit loss would be €101.
When deciding on which betting exchange to use for your matched betting adventure, there are several criteria you need to take into account. A high number of bettors is arguably the most important factor because it increases the chance that your bets will be matched.
Betting exchanges with a lot of players also have high liquidity, that is, the amount of money you can back/lay on a certain event.
Last but not least, is the commission fee of the betting exchange. Actually, for many players, the commission fee is a deal-breaker. If it’s too high, the players might decide to look elsewhere.
Likewise, the commission is also the factor that attracts the players at a betting exchange, especially those who are doing matched betting. If you belong to this category of bettors, your overall profits are your main concern. A high commission fee could significantly reduce them.
This is why Smarkets Exchange looks very attractive to matched bettors. Whether it’s the standard 2% commission or the 1% Pro Tier commission, it’s among the lowest you can find.
Betfair, for example, charges a commission of as high as 7%, depending on the location of the player. Still, with Betfair, players have a chance to reduce their commission significantly over time. The Betfair commission drops as the players reach a certain milestone.
But, in the beginning, you’re bound to pay a much higher commission if you go with Betfair. That might make you wonder why anyone would pick Betfair over Smarkets, an exchange that’s charging only 2% by default.
It’s because Betfair is the world’s most popular betting exchange, with the highest number of players and the highest betting volume. Your bets are much more likely to get matched at Betfair than at Smarkets.
But, that might change sooner than expected. The popularity of the Smarkets betting exchange is growing rapidly, especially among the players doing matched betting. Who knows, in a few years (or even months!), this betting exchange could catch up with Betfair and other major exchanges.
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