A lay bet means betting that something will not happen. Placing such bets on a betting exchange is simple but there are a few things that every bettor needs to understand in order to be successful.
What is a Betting Exchange?
A betting exchange is a website where people can bet against each other. There are no bookmakers there and no fixed odds. Bettors set the odds and take both sides of the bets and form matched bets. The exchange platform only charges a small fee on winning bets which is called commission.
On a betting exchange bettors can take one side of the bet and bet on something to happen. This is called back bet. They can also take the other side of the bet and bet on something not to happen. This is called lay bet. If a bettor thinks a team will not win, they can lay this team not to win. Another person must place a back bet for the bet to match.
What is a Lay Bet?
A lay bet is when a bettor bets against something happening. This means they believe a team will not win, a player will not score, a horse will not finish first in the race and so on and so forth.
When a bettor bets against an outcome, another bettor must place a back bet on the same event at the agreed odds of the same market. The exchange matches these two bets and the bettors then wait for the result.
When a bettor lays a team to win, they believe that the team will lose or the game will end in a draw. Another bettor must back the team to win. When these two bets match the bet is active.
What is Liability in Lay Betting?
Whenever a bettor places a back bet and they enter their stake, the betslip widow shows the potential profit that they might get if their bet wins. Whenever a bettor places a lay bet, they need to enter an amount that will not show the potential profit, but the money they risk to lose if the bet loses.
Liability is the amount of money a bettor must pay if they lose the lay bet. It is different from a back bet and the risk is higher. In lay betting, bettors do not just risk their stake. They risk paying out the winnings of the back bettor just like a bookmaker would have to do. The liability depends on the odds. This means that if the odds are high, the risk is higher. If the odds are low the risk is lower.
To calculate liability bettors can use this formula
Liability = (Odds – 1 ) x stake
Example
A bettor picks a football game and wants to risk 10€ on a team to not win at odds of 3.00. The commission fee charged by the exchange on winning bets is 5%. To calculate liability they need to use the formula above.
Liability = (odds – 1 ) x stake = (3.00 – 1) x 10€ = 2 x 10€ = 20€.
If the team wins the game, this bet loses and the bettor needs to pay out 20€ loses. If the team loses or the match ends in a draw, the bet wins and the bettor keeps their 10€ stake minus the 5% commission fee, that is they will get back 9.5€. Liability is the most important thing in lay betting. Bettors must always check their liability before laying to avoid big losses.
How to Lay a Bet?
To place a lay bet, bettors must log in and pick a sport, an event, and a bet type that is called market. Every event shows possible outcomes. Usually, blue boxes are for back bets and red boxes are for lay bets. Bettors must click on the red box of the team or player they think will not win.
Placing the Bet.
– Click on the red odds of the team or player.
– A betslip window will open.
– Enter the amount of money to risk (liability).
– Check the odds. If the odds are good, leave them as they are. If they are not good, change them by typing or using the arrows.
– Click the “Place Bet” button and confirm.
As soon as the bet is confirmed, another bettor must take the opposite side and back it. The exchange will show if the bet is matched or not.
Why Lay Betting is Useful?
Even though a lay bet has liability on losing and a small commission fee on winning, it can still be useful and profitable.
Lay betting gives better chances to win because the bet wins if the team or player does not win the game. This means bettors have two possible outcomes instead of one, because the bet wins if the team loses or the game ends in a draw.
Lay betting also gives trading opportunities. Bettors use it to trade during live betting. They can back high and then lay low – or the opposite – in order to lock in a small profit regardless of the outcome of the game.
Lay betting is very useful in strategies such as Arbitrage or Matched betting. Some bettors use a betting exchange and a bookmaker where they lay an outcome on the exchange and they back it on the bookmaker in order to make a profit with zero risk.
In Short
A lay bet is betting that something will not happen. It is easy to place but bettors need to always be mindful of the liability factor that is the amount they risk to lose if their bet loses. Lay betting gives more chances to win and it can be used in trading and risk-free betting strategies.