The Types of Bettors
For any betting exchange to function efficiently it requires multiple groups of bettors, equally important in their own right but very different in terms of their activity. We’ve broken this list down into two categories of bettors, ranging from the average Joe to professional organizations.
Most of us begin our betting lives as a Casual Bettor. It might start with a genuine interest and general knowledge of a particular sport, as well as the competing teams or athletes. With minimal or no research, a Casual Bettor might look at the Moneyline for an event and think, “The Raptors will beat the Lakers,” and place a bet accordingly. Casual Bettors are most comfortable using sportsbooks, so they’re more likely to place a back bet if using a betting exchange.
Betting isn’t necessarily limited to Moneyline; a similar level of comfort exists with Spread/Handicap, Match Odds, and Over/Under markets. Typical bets for this group usually won’t exceed $50–100 USD, which would constitute a fairly large bet.
Betting and sports knowledge for this group is roughly the same between the Casual Bettor and High Roller subsets, generally speaking, but the sheer amount of money wagered per bet is what really separates the two. A High Roller might wager anywhere from a few hundred dollars to tens of thousands on any given bet. As the saying goes, “the greater the risk, the greater the reward.” It doesn’t take a math wizard to see that backing $20,000 on 2.5 Moneyline odds will produce a much higher profit than a $20 back on the same event.
The term “High Roller” has even made its way into common conversation, meant to describe anyone who blows through money quickly and carelessly. This connotation may insult some High Rollers, but others wear the description with pride, letting their positive results speak for themselves.
Exclusive to the betting exchange, Market Makers are the first bettors to put up large amounts of money. One of the benefits of doing this (for the Market Maker, that is) is they decide where the prices (odds) are, at least to start. This allows smaller, Casual Bettors to opportunity to bet on whatever they wish without wondering if their bet will be matched.
This is understandably not an easy role to take on. Market Makers require strong fundamentals analysis, or risk losing money in the long-run.
These bettors (often organizations) crunch sports data to come up with better odds than the rest of the market on what is going to happen in any particular sporting event. As the name suggests, Fundamentals Bettors invest on fundamentals.
Increasingly, it can be hard to tell the difference between Market Makers and Fundamentals Bettors; it is more a matter of when and how they enter the exchange market.
This group can be most easily described as NOT betting on what is going to happen in a particular sporting event, but on how is this particular market going to change? Traders are betting on the market dynamics of a particular market, not the underlying reality that the market reflects. Traders, then, require there to be a fair amount of money already in a market before they want to get involved.
Just like the stock market trader, our Trader relies on the “buy low, sell high” methodology to (hopefully) lock-in a profit, regardless of the actual sporting result. In other words, a Trader will make many small, time-sensitive bets and then “reverse” those bets mere seconds or minutes later. Trading requires very close watching of the markets in real-time and a lot of patience.