Traditional bookmakers are one of the most used services for sports betting. but as soon as you look past the bookmakers you will find that alternative platforms like sports betting exchanges are particularly popular.
On these platforms, you will find lay bets. This is a very special kind of bet in which you wager against a specific outcome, thereby acting as a bookmaker for back bets. Simply put in laying bets is an option available at popular exchanges like Betfair, where you can play the bookmakers offering odds to sell a bet instead of to back a bet. If the backer’s bet losses you keep their stake, else if the backer’s bet wins you pay up the odds agreed.
Most beginners find lay betting complicated when it’s simple to execute. In this article, OddsMax is going to explain precisely how lay bets work and how can you use them to your advantage.
Lay Bets and “Liability” Explained
You will best understand the lay betting when you appreciate what happens at the bookmaker’s end whenever a bet is placed. What do bookmakers win or lose every time a bet a placed?
The very same moment when a back bet is placed by a punter, the bookmaker takes on the risk, known as the “liability” by matching the stake. What they are doing is effectively placing a lay bet against the bettor. The liability in a lay bet is always dependent on the stake and odds agreed with the bettor.
It will be a lot easier to understand with an example.
Suppose in a match between Man United and Chelsea, a punter places a $10 back stake at 4.0 odds for Man winning. Now the possible outcome of this lay betting can be:
Manchester United win. The Bookmaker loses the bet and has to pay the punter.
The game ends with a draw. The Bookmaker wins and keeps the backer’s $10 stake.
Chelsea wins. The bookmaker wins and keeps the Backer’s $10 stake.
We are more interested in the first scenario when the bettor wins. How much exactly the bookmaker pays? It’s based on a simple formula:
Stake x (DecimalOdds -1).
If you are confused why are we subtracting 1, it’s because bookmakers only have to pay the punters their profits and their stakes as well.
For this example: $10 x (4.0 -1) = $30.
Hence, the bookmaker stands to lose $30, which is the liability of the lay bet.
You have to remember that in lay betting, the bookmaker can:
Win the amount Layed, and nothing more
Lose the liability, that is usually greater than the stake played
What we explained here is the lay betting from the perspective of a bookmaker, but the situation and numbers are identical for punters as well who place lay bets via a betting exchange like Betfair.
How to Place Lay Bets
It’s easier than you think you to place lay bets. While there are multiple betting exchanges where you can lay a bet, we will use the Betfair for this section.
We took Huddersfield vs Man United game for lay betting. We are about lay stake $10 on Huddersfield against Manchester United.
On Betfair, you will find the lay prices are always in pink. In the chart below we can see the best lay odds (lowest) for Huddersfield is currently 11.0. there’s up to $392 available at that price.
Once you click on the pink lay odds you will be prompted to enter your stake, as shown below.
If you pay close attention you will realize that for this $10 lay bet, the liability is $100. It follows the same formula: $10 x (11.0 -1) = $100. Your betting account will be required to have enough funds to cover $100 liability in the event Huddersfield win the match.
Betfair matches your stake with other punters who want to back Huddersfield at that same price, on a first come first serve basis. This same principle is applied to all peer-to-peer betting sites and apps.
If you are looking forward to earning risk-free profits from matched betting you have to place lay bets, there is no alternative.
What to Look For In a Lay Bet
The “liability” remains the single most important factor to consider about a lay bet.
So, how exactly can you limit your liability?
Here are a few tips we suggest:
Lay bets at the lowest possible odds
As a backer your aim must be always to bet at the highest possible odds to maximize your value, thereby reducing the bookies’ edge to minimal. But in a lay bet, you are acting as a bookie, so here you have to flip sides and have to look for lowest odds possible.
Shop around different betting exchanges to find the best lay odds. You can also request lower prices on the betting exchange to reduce your liability, this is known as queuing. This will cut down the money you have to pay the backers if they win.
Lay When the Odds Are Value
In lay betting, the odds you lay should actually imply that is the outcome is much more likely to happen than it really is.
Therefore, if you believe that the true odds of an outcome stand at 3.0, i.e. it is likely to happen at 33.33% chance, you have to lay price in the market is 2.5 implying 40% chance. This point is a great value for the layers, but a poor value for the backers.
In sports events that have an outcome over-hyped, this type of value lay bet is present and you have a high chance of making some huge risk-free profits.
Play the numbers right and compile all the odds you have played in the past to make your own decision.
Watch the Bookmakers’ Odds
Always remember that bookmakers make money from laying. This strongly suggests that their odds are already underpriced for the backers. This is why it is a good idea to lay odds closest to the bookies’ average odds.
This is what we have to offer you, but as a bettor, it is best in your interest to use your own analysis and expertise to target lay prices on a sport. Contrary to the popular belief, Bookmakers are not always right which is why when you make your own strategy you already have edge over other bettors relying on bookmakers’ data.