It is commonly believed that many of the smaller betting exchanges supply the liquidity on their markets through participating in them. Major exchange operators are not immune to this practice as well.
“We have an agreement with certain key customers that they will put funds into markets at certain times to ensure competitiveness and provide liquidity” Betdaq told to the Racing Post.
“We do not, and have never participated in any of the markets on mainstream UK sport, such as horseracing, football, cricket, etc. Occasionally we do stand as counterparty to bets in more obscure foreign markets to kick-start them by adding some liquidity. In that instance, the cost is part of our marketing spend and it therefore has no bearing at all on our impartiality in the market or our willingness to give up information to relevant sporting bodies. It is also declared to Customs and Excise in the event that it shows a profit.” Betfair reported to the Joint Committee on the Draft Gambling Bill.