Lay betting explained

The one idea

A normal bet is a back: you say the runner wins, you stake £10 at 4.0, and if it wins you get £30 profit. Someone has to take the other side of that bet. At a bookmaker, the bookmaker does. On an exchange such as Betfair, another customer does, and that customer has laid the runner.

So when you lay, you are the bookmaker for one bet. You name a price, a backer accepts it, and the outcomes are simply reversed: if the runner loses you keep the backer's stake; if it wins you pay them out at the price.

The numbers

Three amounts matter, and the exchange shows all three before you confirm.

Lay stake

The backer's stake you are accepting. It is what you win (before commission) if the runner loses.

Liability

What you pay if the runner wins: lay stake × (price − 1). This is your real risk and the money the exchange holds from your balance.

Commission

A percentage of your net winnings in the market, taken only if you win. Betfair's standard rate is 5%.

Lay £10 at 4.0: your liability is £10 × 3 = £30. If the runner loses, you keep £10 and pay 5% commission, so £9.50. If it wins, you pay £30. Lay £10 at 1.50 instead and the liability is only £5, because a runner at 1.50 is expected to win two times in three, so the backer is paid little when it does.

The short way to remember it: at low prices laying is cheap and wins often; at high prices laying wins nearly every time but one loss costs many wins.

Lay calculator

Enter the price and either the lay stake or the liability you are happy to risk. The exchange's "lay to liability" option does the same conversion.

When a lay is the value side

Every price implies a chance: 4.0 says the runner wins one time in four (25%). If you have good reason to think the true chance is lower, say 20%, then anyone backing at 4.0 is overpaying, and laying at 4.0 is the value bet. The fair price for a 20% chance is 5.0, so you are getting to lay at 4.0 something that should be 5.0.

That is exactly what Betfair Edge looks for. The sharp bookmakers' prices, with their margin removed, give a fair price for every runner. Where Betfair's price is higher than fair, backing is value. Where it is lower than fair, laying is value. The edge shown on a lay signal is worked out on the liability, because that is the money you actually risk, and it has commission taken off.

Lay signals come up most in racing, where a horse gets backed in below its fair price on the exchange, and in football when a favourite is overbet. A lay at a short price needs little liability; a lay at a big price is a bet that the outsider stays an outsider, with a liability to match.

The catches

• Your risk is the liability, not the stake. A £10 lay at 21.0 can cost £200. Size lays by liability, and work any staking plan (Kelly included) on the liability.
• Prices move. A lay that was value at 4.0 is not value at 3.0. Check the market before you click; the exchange may also match you at a better price than you asked for.
• Partial matching. Only the money available at the price gets matched. If the market is thin your lay may be half matched and the rest left waiting, or matched later at the off.
• Non-runners and voids. In racing, bets on a non-runner are void and the prices on the rest are reduced (Rule 4). A withdrawal can turn a good lay into a poor one.
• Commission is on net winnings. It is charged once per market on what you win overall, so a lay that loses costs you nothing in commission, and backs and lays in the same market net off.
• In-play is a different game. Prices swing, there is a delay on bets, and the fair price is anyone's guess. Our signals skip in-play markets.

Questions

What does lay mean in betting?

To lay a selection is to bet that it will not win. You take the other side of someone's back bet, like a bookmaker: if the selection loses you keep their stake (less commission); if it wins you pay them out at the price.

What is liability on Betfair?

Liability is the most you can lose on a lay bet: the lay stake multiplied by the price minus one. Laying £10 at 4.0 means a liability of £30. The exchange holds that amount from your balance until the market settles.

Is lay betting the same as the bookmaker's side?

In the arithmetic, yes: you offer a price and pay out if the selection wins. The difference is that you lay one selection at a time, at a price the market sets, and the exchange takes commission on your net winnings.

How much commission does Betfair charge on lay bets?

Commission is charged on net winnings in a market, not on each bet, at the exchange's rate for your account. Betfair's standard rate is 5%. If your lay loses, there is nothing to charge.

When is a lay bet value?

When the price you can lay at is lower than the fair price, which means the market is giving the selection a better chance than it deserves. Betfair Edge compares the exchange price with the sharp bookmakers' fair price and flags lays where the gap, after commission, is positive.