When you make a bet with a traditional bookmaker like Pinnacle or Bet365, you back the team or event that you think will win.
But what if you think that they won’t win but not sure who else will?
This is where lay betting comes into play and here is everything you need to know about it.
What Is Lay Betting?
Lay betting is available on betting exchanges like Betfair where, as the lay bettor, you act as the bookmaker.
Backers bet on their event and set the odds. As a lay bettor, you provide the action and take their bet at their odds, essentially betting that the backer’s event will not win.
If the backer’s event wins, you must payout like a traditional bookmaker, paying the winnings at the chosen odds when you took the lay bet.
If your lay bet wins, you win the backer’s original stake.
Profit, Liability And Liquidity
To understand lay betting, you must know the difference between profit, liability and liquidity.
Profit works just like any standard bet. If you wagered $100 on a +300 underdog you profit $300.
When it comes to lay betting, the formula is reversed.
To profit $100, as the bettor, you must be willing to risk $300.
This is your liability. If the backer’s bet wins, you are obliged to pay out the $300.
See the difference?
Liquidity is how much money a market has available to bet. The more popular a market, the higher the liquidity.
Compare the outright market between the winner of the MLB World Series and the winner of the Formula 1 Championship.
Here’s the MLB World Series outright market:
And here’s the Formula 1 outright market:
As you can see, there are far more markets for lay betting in the World Series outright compared to the Formula 1 outright, meaning it has a higher liquidity.
You must check that there is enough liquidity in your chosen market. If not, it may be because all the bets have already been taken.
You may have noticed that the above betting exchange uses decimal odds. This is because decimals are very accurate.
With decimal odds, the backer’s stake is always included. For example, odds of -100 are shown as 2.00.
If you aren’t used to using decimal odds, you can use our odds converter to change them to your preferred odds format.
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So, with all this mind, here’s an example of lay betting in practice.
Example Of Lay Betting
A bettor wants to bet on the Red Sox (backing) to win the World Series. However, you don’t think that they will win the World Series, so you bet that anyone other than the Red Sox will win (laying).
Here is what the associated payouts and liabilities look like.
As you can see, as the backer, if someone wagers £20 on the Red Sox to win the World Series, they stand to profit £380 from odds at 20.0 (+1900) if they win.
However, as the lay better, you have a potential liability of £380 if the Red Sox win the World Series and you take the bet. If any other team wins, you win the backer’s stake of £20.
Laying Off A Bet
This sounds similar to lay betting but works a little differently.
When you lay off a bet, you are betting against an event you have already backed.
It works like this.
Let’s say you have backed the Diamondbacks to beat the Dodgers at odds of +152. However, during the game, they take a surprise 3-0 lead after the first innings. The odds for the Diamondbucks to win will shorten.
You can now lay off this bet.
When you bet against your original back bet, you have two bets:
- The Diamondbucks will win; and
- The Diamondbucks will not win.
Laying off a bet will reduce the risk of your bets losing but will also reduce your potentail winnings.
Furthermore, it’s important to understand that laying off a bet does not guarantee you a profit.
The reasons are twofold.
Firstly, there must be someone that is willing to back that event. After all, when the odds on the favorite get so short, they are unappealing and so there becomes a lack of action on that side of the betting line.
Secondly, if you do get someone to back the event, the lay bet odds may not even make you a profit.
Lay Betting Systems
There are tipsters out there that claim to have invented a lay betting system that will guarantee you a profit. When it comes to sports betting, nothing is certain.
Lay betting systems are also used as part of matched betting strategies, which are not all that they are made out to be.
When you lay a bet, you are betting that an event will not happen.
If the event doesn’t win, you win the backer’s stake. If the event does win, you pay out the winnings like a traditional bookmaker.
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