What is Lay Betting?
Wednesday 4th March 2015

Nowadays, as more and more betting activity takes place online, the use of betting exchanges is becoming increasingly popular. Since their emergence, exchanges such as WBX.com have transformed the way punters can bet. In particular, the option to ‘lay’ bets offers punters an exciting new dimension and provides them with more betting freedom than ever before.

‘Backing’ and ‘Laying’ explained -

For even the occasional punter, ‘backing’ is a fairly straightforward concept. To ‘back’ a selection is simply betting on a selection ‘to win’, unsurprisingly the most common type of bet.

To ‘lay’ or ‘laying’ a bet on the other hand, is a process that the masses will be less familiar with. Laying a bet involves the same process as backing a bet but in reverse. Instead of betting on a horse to win, you are betting on a horse to lose. This is why laying a horse is often referred to as “taking on the role of the bookmaker”, and in essence this statement is true. Laying horses is what regular bookmakers do every day. Just like the bookies, if the horse you lay loses, you keep the punters stake; likewise, if the horse wins you are required to pay out. For those unfamiliar with such practices this may sound a little daunting; however, it doesn’t have to be, as laying a horse can often be simpler than backing one.

For those who are beginners at laying on a betting exchange, the idea of betting against another human as opposed to a traditional bookmaking company might seem a slightly difficult one to grasp at first, but it really is very straightforward once you become accustomed to the processes of the exchange. The important thing to remember is that when placing a bet on the exchange - because you are betting against another person – the bet needs to be ‘matched’. To clarify, when two people successfully bet against each other on the exchange (the backer and the layer) the bet is referred to as being ‘matched’, in other words the bet has been successfully placed. So, if laying a horse for a £10 stake, as the layer, you are liable to pay out at the matched odds in the event of the horse winning. For example, laying a horse at odds of 4.50 for a £10 stake would result in a liability, i.e. amount of money you risk, of £35, it’s calculated as:

Layers Liability = (Lay Stake * Lay Odds) - Stake

Example lay bet -

The basic principle of laying a bet is illustrated by the example below.
Let’s say that for a number of logical reasons (the horse looks overpriced and therefore represents poor value) we don’t fancy Silviniaco Conti in the Cheltenham Gold Cup and choose to lay the horse using the exchange. See image below.

Betting Exchange

Figure 1: Laying Silviniaco Conti on the betting exchange

We lay Silviniaco Conti on the exchange for a £10 stake at odds of 4.50.

You would lose £35 ((£10 x 4.50) - £10) if Silviniaco Conti was to go on and win the race, i.e. the layers liability. However, if as predicted another horse wins and Silviniaco Conti is beaten you will have won £10. This is no different from going into the betting shop and placing a £10 bet on a horse at 4.50, the horse loses and the bookmaker keeps your stake. The higher the odds you lay your bets at, the higher your liability is.

It is important to note that, punters will need to be using a betting exchange such as WBX in order to place a lay bet. Lay bets are not something that traditional bookmakers/sportsbooks are able to offer their punters. Subsequently, this is one major reason as to why many punters favour the betting exchange over regular bookmakers.

One particular advantage of lay betting is that it is often far easier to identify a horse which we think will not win, rather than identifying a horse we think will win. The reason behind this is simple; when studying a race, it is sometimes easier to find horses whose chances of losing are much stronger than their chances of winning. This is particularly true on the flat, where the majority of races take place with between 8 and 10 runners. Purely on this basis, putting aside any race-form opinions or statistics for the race, it can simply be put down to probability that the chances of picking a loser are far greater than those of picking the winner. In a 10 runner race, betting on a horse to lose (lay), means that the laying punter has 9 other horse’s running in their favour. Going on the logic that it is - more often than not – easier to identify something that won’t happen as appose something that will happen, then it’s easy to see that lay punters are likely to have a better strike rate. After all, which is easier: picking the one winner in a 10 horse race or picking any one of the 9 losers!

Do not confuse exchange lay betting with the practises of a traditional bookmaker –

One should not simply assume that just laying bets (what bookmakers do on a daily basis) is a shortcut to punting success. Although opting to lay a bet on the exchange allows punters to go through a similar practice to the one bookmakers do, it is still very different. It is important to understand that bookmakers lay all of the runners/entrants in a particular market and are aiming to price up the event in a way which allows them to make a profit regardless of the outcome. For punters to achieve a similar thing on an exchange is simply not plausible. Exchanges run on a person to person operation and therefore the odds (particularly at the outsider end of the market) are a much more accurate representation of the entrant’s realistic chances, thus making it almost impossible to lay each entrant at odds which would guarantee a profit no matter the end result.

Exchanges -

For those punters who are looking to try their hand at laying, there are a number of betting exchanges that can be used. Industry giants: Betfair are the most common of those; however, World Bet Exchange (WBX) compare very well. Although, offering a similar standard rate of 5% commission on winning bets, it is the guarantee of no premium charges which sets them apart from competitors. Going that little bit further for members, WBX also offer the reduction of commission down to 4% and even as low as 3% on 3/4 entrant markets (such as a 3 or 4 runner races).

[part 2]