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The Betfair Exchange allows customers to bet against each other rather than betting against a traditional bookmaker. By matching customers, rather than taking the risk itself, the Exchange gives bettors the option to 'lay' (betting on something not to happen).
The Betfair Exchange connects you with a community of punters, allowing you to set your own odds and place bets directly. Without bookmaker intervention, Betfair fosters a real community that interacts directly with odds, offering you better value and improved odds.