Comparison to other betting models

Sportsbook and exchanges are two different models in the market today. Below you can see a brief outline of both and an overview of how Wagerr compares.

Betting Exchanges

A betting exchange allows gamblers to bet peer-to-peer. In the Exchange model, a user can “lay” a bet, which means that they can bet against an outcome happening. This model effectively removes the sportsbook from the equation and allows users to bet against each other. Usually the exchange charges a small fee to sustain itself, generally smaller than a sportsbook.

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 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. Worse yet, 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 quite common on betting exchanges, users are either forced to accept poor odds or are quite restricted in the amount they can bet without enough users.

Traditional Sportsbooks

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. Sportsbooks who do not manage their risk correctly put players money at risk and there has been plenty of examples of sportsbooks closing, refusing payouts or worse, running off with users funds. Wagerr presents a new model where those risks are mitigated fully.

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. In comparison to a betting exchange the fees are much higher 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 odds.

Wagerr offers a superior model to both. Wagerr allows you to bet in very large amounts with limitless liquidity and no concern of ever being restricted or limited by the sportsbook. Further with Wagerr, the users of the sportsbook benefit from the success of the Wagerr betting platform. You can read more about that in tokenomics of Wagerr.

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