Put simply, lay betting involves you wagering on an event not happening. Whereas a regular bet sees you back the horse you think will triumph, laying the bet means you think one of the rest of the field will cross the finishing line first.
This is a great way of wagering on a race, rugby match or football tournament where, for example, you think the favourite’s odds are unrealistically short and they are not as likely to win as the bookies claim, but you are not certain who actually will emerge as the victor.
Betting exchanges allow you to lay a bet for another punter to back, effectively making you the bookmaker. The layer receives the backer’s stake as a reward if the selection loses, whilst the backer’s bet works as it would with any other bookmaker - they place a stake and see a return based on the odds provided if their selection wins.
The backer’s winnings are paid by the layer, so they must take into consideration how much they will be required to pay out if the selection succeeds before agreeing to lay the bet. This is known as the layer’s liability.
The liability represents the worst possible outcome for your bet, financially.
For instance, if you think that a horse running at Ascot is overrated, you could lay a bet at 5/1. A backer may choose to stake £5 at those odds on it winning, meaning you would have to pay them £25 if they are right, and making your liability £25. The backer also receives their £5 stake back when they win, putting your total losses at £30. If the horse doesn’t win the race, your prize is to keep the backer’s stake, in this case £5 (less commission).
The rewards will not be as large as the liability unless the odds of winning on the selection are evens or below, but you do have every other horse in that field or every other team in the tournament on your side. The other punter is relying on just the selection that they backed coming through for them. You have to seriously consider whether the bet is worth the liability before you choose to allow the backer’s stake, adding an intriguing element to traditional sports betting.
You might look at the market on the betting exchange site and think that the odds make the liability from laying a bet too high. In that case, you can make an offer at odds that sit more comfortably with you and wait for a backer to come along and match your bet.
Similarly, you might be so confident that Brazil will not win the World Cup that you offer longer odds, and therefore create a larger liability, in order to tempt backers into taking you up on your bet. These are the sort of decisions bookmakers have to make every day when running their business, and which you will make while lay betting.
Betting exchanges offer the chance to lay bets on a vast array of sports and events. For a football match you can lay a team, winning the bet if there is a draw or the opposition take the victory. There are also markets for horse racing, tennis, basketball and even for specials bets on the Oscars, Eurovision or worldwide politics.
If a traditional bookie offers a market on a sport, it is likely an exchange will give you the chance to lay a bet on it too.