Lay betting is an option on a betting exchange which allows you to take the same position as a traditional bookmaker, by offering odds. Find out what lay betting is on an exchange, and how to place a lay bet.
What is lay betting?
For users new to a betting exchange, the concept of lay betting can be daunting. However, lay betting in its simplest form is the reverse of placing a back bet - you back an outcome you think will win, while you lay an outcome you believe will lose.
When placing a lay bet you are effectively playing the role of a bookmaker, offering a counterparty odds on a particular result happening. If that result happens, you pay them. If it doesn't, you receive the backer's stake.
As an example let’s say you believe the odds on Novak Djokovic to win the French Open are far too short and offer little value, but are unsure who is going to win.
If you made a lay bet on Djokovic, you would be backing any other player to win the tournament - which can be easier than picking a winner.
Understanding liability on a lay bet
Understanding the concept and how to calculate your liability is fundamental when making a lay bet.
When backing an outcome, the liability is simple to calculate as it’s your stake - the amount you bet. Unlike back bets where you only lose your stake regardless of the odds, the liability of a lay bet is dependant on the odds.
As an example, let’s say you want to lay a horse at 3.40. To win £10 your liability would be £24. In other words, you are offering odds of 3.40 to someone else who is backing the horse to win with a £10 stake. If the horse wins, you pay the backer £24, but If the horse fails to win, you win their £10 stake.
How to place a lay bet
To place a lay bet on Smarkets simply select the odds in the blue box as displayed below.
In doing so, the odds currently in the box will be selected. Your bet against Cape Islay at 4.5 will, therefore, win if any other horse wins the race.
The current lay odds will automatically be selected, but you can set your own odds.
On Smarkets under the default settings, you enter a ‘back stake’ and are presented with a return and your liability.
Your ‘back stake’ is the amount you stand to win if your bet is successful, so £20, while the ‘liability’ is the amount you stand to lose if your bet is unsuccessful, so £70.01.
Benefits of lay betting
Having the option to lay an outcome on a betting exchange creates a number of benefits which are not possible with a traditional bookmaker.
One benefit of lay betting on an exchange is the opportunity to lock in a profit or cut your losses across all outcomes.
This is similar to the stock exchange, with brokers buying and selling shares on event outcomes rather than commodities -back an outcome at a higher price than you lay it at, and you can secure a guaranteed profit, irrespective of the result.
Apply this to betting
Now you understand what lay betting is and how to place a lay bet, you have the perfect opportunity to take advantage of a new way of betting.
Remember successful betting is all about finding value and betting with the best odds - which is what Smarkets offer with an industry-low 2% commission.