A beginner’s guide to lay betting
A ‘lay bet’ is the opposite to a ‘back bet’. When you back something, you think it will win but a lay bet is where you’re betting on something not to win. Back bets are placed at the bookmakers and lay bets are placed at the betting exchange.
Lay betting allows you to take on the role of a bookmaker in that you’re taking the bet that someone else is making. But you don’t actually need to become a bookmaker…
At a betting exchange, such as Betfair or Smarkets, you can find lots of available odds on all sorts of things not to win. In football, a ‘no win’ covers both a loss and a draw.
Another difference between back and lay betting is ‘liability’. Liability is the amount of money you could lose when placing a lay bet. When you back something to win, the most you could lose is your initial stake. However, with a lay bet, you could actually lose more than you stake. (This isn’t the case with matched betting).
For example, if you placed to lay bet 2/1 shot for £20, if it loses then you win £20. But if it wins, then you lose £40 (2 x £20).
How to place a lay bet
Now you know what a lay bet is, it’s time to learn how to place one. Here’s a quick step-by-step guide to lay betting:
1. Go to an online betting exchange and find your chosen market
Your market is the thing you’re betting on, such as ‘final score’ or a particular horse in a race. Whichever betting exchange you use, the onscreen layout will be pretty uniform. You’ll see two different coloured boxes sitting side-by-side. The blue boxes show the back odds so you can ignore those ones. It’s the pink ones we’re interested in.
2 Click on the lay box for your chosen selection
In this example, we’re going to show you how to place a lay bet on Liverpool. Remember: this means that we’re betting on Liverpool not to win.
Once you’ve clicked the pink box, your selection will show on your bet slip which is on the right hand side of the screen.
3 Enter your stake
Once you’ve added the selection to your bet slip, you can add the stake. This differs from a back bet, because you’re inputting an amount you want to make available for other punters to bet on. For example, if you imagine you’re the bookmaker, your stake is the amount that the customer is going to hand you to place the bet.
The number circled below is your liability and the potential payout if the person taking your bet wins.
The formula to calculate this liability yourself is:
Stake x (Lay odds – 1) = Liability
So for the below example, that is:
1.44 – 1 = 0.44
£100 (stake) x 0.44 = £44
4 Place your bet
So when you place a lay bet, instead of the money going to the bookmaker, it goes into the market. That way, it’s available for someone else’s bet to match. If someone already has cash in the system and at the same price, the exchange will match your bets immediately. But if they don’t, you’ll just need to wait for someone to take the price you’ve offered.
If your lay bet wins, you’ll receive the £100, minus a commission of 5%. This is how betting exchange’s make their money.
However, if your lay bet loses, you’ll be down your £44 liability.