Betting maths guide
What Is Exchange Commission?
Exchange commission is the fee a betting exchange charges on winning bets. It affects back bets, lay bets, hedging, free bet conversion and matched betting calculations.
What does exchange commission mean?
A betting exchange lets users back or lay selections against each other. The exchange usually earns money by charging commission on winning positions.
For example, if you win £100 on an exchange and the commission rate is 2%, the commission is £2 and your net win is £98.
| Gross exchange win | Commission rate | Commission | Net win |
|---|---|---|---|
| £100 | 2% | £2 | £98 |
Commission = gross exchange win × commission rate
Net win = gross exchange win − commission
Why commission matters
Commission reduces the amount you keep from a winning exchange bet. That means it affects calculations involving:
- Back bets placed on an exchange
- Lay bets
- Lay liability
- Hedging and greening up
- Free bet conversion
- Matched betting
- Arbitrage-style calculations involving an exchange
Ignoring commission can make a calculation look more profitable than it really is.
Commission on an exchange back bet
If you back a selection on an exchange and it wins, commission is usually charged on the profit.
| Back stake | Exchange odds | Gross profit | Commission | Net profit |
|---|---|---|---|---|
| £50 | 3.00 | £100 | £2 at 2% | £98 |
Gross profit = stake × (odds − 1)
Commission = gross profit × commission rate
Net profit = gross profit − commission
Commission on a lay bet
If you lay a selection and that selection loses, your lay bet wins. The exchange may charge commission on the lay stake you win.
| Lay stake | Lay odds | Commission rate | If selection loses | Net exchange win |
|---|---|---|---|---|
| £100 | 3.00 | 2% | Lay bet wins £100 gross | £98 |
If the selection wins, the lay bet loses and you pay the liability. In that case, commission is usually not charged on the losing lay bet.
Exchange commission and lay liability
Commission does not usually increase lay liability. Liability is based on the lay odds and lay stake.
Lay liability = lay stake × (lay odds − 1)
Commission affects the amount you keep if the lay bet wins. Liability affects the amount you risk if the lay bet loses.
| Concept | What it affects |
|---|---|
| Lay liability | The amount you could lose if the selection wins. |
| Exchange commission | The amount deducted from exchange winnings. |
Commission and hedging
Hedging calculations often use a lay bet to balance outcomes after an earlier back bet, or a back bet to balance outcomes after an earlier lay bet.
Commission matters because the exchange-winning side may be reduced by the commission rate. This changes the stake needed to balance the position.
Commission and free bets
Free bet calculations often involve placing a free bet with a bookmaker and laying the same selection on an exchange.
If the bookmaker free bet loses, the exchange lay bet usually wins. Commission then reduces the exchange winnings. That is why free bet lay stake formulas include commission.
| Free bet result | Exchange lay result | Commission effect |
|---|---|---|
| Free bet wins | Lay bet loses | Liability is paid on the exchange. |
| Free bet loses | Lay bet wins | Commission reduces the lay winnings. |
Commission and matched betting
Matched betting calculations usually include both a qualifying bet and a free bet. Both parts may involve an exchange lay bet.
The commission rate can affect the qualifying loss, free bet conversion value and final estimated result.
Common exchange commission mistakes
Forgetting to include commission
Ignoring commission can make a back/lay, free bet or hedge calculation look better than it really is.
Applying commission to the wrong side
Commission is usually charged on exchange winnings, not on every stake or every liability.
Confusing commission with liability
Liability is the amount at risk on a lay bet. Commission is a fee deducted from winnings.
Assuming every exchange charges the same rate
Commission rates can vary by exchange, account, country, market or promotion. Always check the exact rate being used.
Using rounded figures too early
Rounding intermediate lay stakes or commissions can slightly change the final result.
Exchange commission FAQs
What is exchange commission in simple terms?
Exchange commission is a fee deducted from winning exchange bets.
Is commission charged on losing bets?
Usually no. Commission is generally charged on exchange winnings, not on losing bets.
Does commission increase lay liability?
Usually no. Lay liability is based on lay stake and lay odds. Commission affects the winnings if the lay bet wins.
Why does commission matter for free bets?
Free bet conversion often uses a lay bet. If the lay bet wins, commission reduces the exchange winnings and changes the correct lay stake.
Which calculators include commission?
The Back/Lay Calculator, Hedge Bet Calculator, Free Bet Calculator, Matched Betting Calculator and Lay Liability Calculator all use commission in relevant calculations.