What is Lay Betting?
"I bet you won't get a bullseye", "I bet you won't finish all that", "They'll never win if he plays." We all make statements to friends like this every day. What you're actually doing is 'laying a bet': betting something won't happen. This is the major difference with Betfair and conventional bookies.
Betfair have made lay betting possible.
For example have you ever thought Roger Federer was way too short to win an event, but couldn't decide who was going to win the tournament? Problem solved - by laying Federer, you are effectively backing the field to beat him. Much easier to cheer the whole field!
Like anything too good to be true, there is a catch. Should your selection win, you'll pay the backer his winnings, which could be a lot more than the stake. Just be careful how much you decide to lay!
Laying bets sometimes causes controversy because you are betting on someone/something losing - but it has always happened that way. If you back one horse to win a race, then by default, you are betting AGAINST every other horse in the race - you can't cheer them all to win! Betfair simply make the process simpler, cutting out the bookmakers' margins. In many sports or markets, such as a tennis match or under/over 2.5 goals in football, betting on one side is exactly the same as laying the other option.
How do the odds work for laying?
Imagine two everyday scenarios - flipping a coin and rolling a dice.
You and your mate each put a fiver on the coin toss. One calls Heads, the other gets Tails, and whoever wins gets £10.
You backed Heads for £5 to win another £5. The odds you received were evens or 2.
Or looking at it another way:
You laid Tails. You let your mate have £5 on Tails to win another £5, at odds of 2.
Either way, if it lands Heads, you win a fiver, if it lands Tails, you lose a fiver. In a two-horse race, backing one side means you are laying the other.
So what happens when the odds aren't even, or there are more than two options?
Think of a standard dice (or die). Pick a number. Your mate will pay you every time it lands on six. What odds should it be? It can't be evens or 2, because that's not fair - you've got much more chance of losing than winning.
Chances of winning - one
Chances of losing - five
The true price of this bet is five to one, or in decimals, 6 (potential profit plus your stake).
So your mate agrees to pay you the true price if you roll a six. You put down £1, he risks £5.
If your price is 5/1, what price is he getting for his bet? He has five chances of winning, and only one chance of losing. So the odds are 1/5 or in decimals, 1.2. If you've noticed the similarity, well done. It's simply 'flip the fraction' to work out the other side of the bet.
True odds (such as 5/1 v 1/5) represent an efficient market. This occurs when all the money going into the market equals all the money being paid out in the market - there is no leakage or profits being taken. Efficient betting markets rarely exist outside of betting exchanges - bookmakers need to reap a profit in order to run a business.
Betting should all come down to weighing up the risk versus the reward.
Laying at 2 will win you more if you are correct, but it is more likely to happen than laying at 6. But laying at 6 will cost you more should that result occur.
Backing at 2 is more likely to happen, but you won't win as much compared to backing at 6. And if you have bet to win a certain amount, then backing at 2 will cost you more if the selection doesn't win.
Placing a lay bet
Select the market as outlined in placing a bet.
Then click on the lay side, in the following example you are laying Phil Mickelson at odds of 9. The backer is staking £10.
Your liability of £80 is taken from your balance as this is your worst case scenario. The payout will be £90 but that includes the stake from the backer. If this bet was matched, there would effectively be a pot of £90 for someone to collect - the backer's £10 stake, and the layer's £80 liability.
If Phil Mickelson wins the tournament you have to pay £80 to the winning customer. If any other player wins the tournament you win £10 less commission. When laying a bet, you can only win the other person's stake.
In the example outlined above you will notice that the market is not completely formed. There aren't many offers on the screen and there is a gap between the best prices to back and lay Phil Mickelson. In this instance if you don't want to lay the selection at 9 you could make an offer in between 6 and 9. This is explained in asking for a price (LINK) in the previous article. Your offer would then appear in the back column waiting for someone who may think your offer is value (LINK) and will back the selection.
This is the amount you could lose in your worst-case scenario. When backing it is simply the stake which you place. When laying however it is the amount it will cost you if your selection wins. Either way, it is how much you are risking.
Ensure you monitor how much you are liable for.
NB - Be very watchful of where you put the decimal point. If you want to lay a bet at 4.2 make sure it is just that and not 42... otherwise it will be an expensive mistake should your selection win. One thing's certain though, Betfair will only let you risk as much as is in your account and at the best available odds.
If you lay multiple selections in a field your liabilities don't accumulate, your bets offset each other providing the market only has one winner. Use the 'What if' function (as detailed in the next article LINK) to test it out for yourself.
For more detailed information on lay betting and its advantages click here (LINK).