Betting intermediary: the exchange licence

17 records, one of the two rarest betting activities on the register — only the no-gaming-machines variant of General Betting Standard, at 10, is scarcer. An intermediary provides a service by which people bet with each other rather than with the operator — a betting exchange. The company takes commission and holds no position in the outcome.

The permission is separate because the business is structurally different. A bookmaker is the counterparty to your bet and profits from its margin; an intermediary is a venue and profits from volume. Those carry different risks to a customer and different obligations, so they carry different licences.

Holding an intermediary licence does not stop a company also holding a bookmaking one, and several do. The two sides of such a business are separately permitted.

What follows from that is less comfortable. 'Exchange' is used loosely in marketing for products that are not exchanges at all. The licence is the test: a genuine exchange needs this activity and a bookmaker with an exchange-shaped interface does not have it.

What to do with it. If a product claims to match you against other customers, check for this activity. Its absence means the company is not permitted to run an exchange — though a hosted arrangement can still put a third party in the middle, so the account holding your funds is the next thing to find.