What is a lay bet - the ultimate guide to lay betting

Ever heard the term lay betting? If you’re interested in the world of sports betting, you may have come across the notion of lay betting, but may be wondering exactly what it is. You’re not alone, a lot of sports bettors find it tricky at first, but we’re here to help. 

In this guide, we’ll go through exactly what lay betting is, explaining how it’s done, as well as the pros and cons you need to be aware of. If you’re looking to learn about lay betting, you're in the right place.  

What is a lay bet? 

First things first, what is a lay bet? In short, every bet is a lay bet to someone. This is because a lay bet is merely the bet from the point of view of the person offering the bet. In most cases, the bookmaker is the person laying the bet. If you place a bet with a bookmaker, in person or online, the bookmaker is the one laying that bet.

Thanks to the advances in online betting, lay betting is no longer the privilege of bookmakers. Regular users can lay bets too. Essentially, a lay bet is a bet on a loser. For example, if you lay a horse, you’re betting on that horse to lose, and you’re doing so by facilitating another person’s bet on the horse to win, just as the bookmakers do. 

If using traditional sportsbooks, or online betting sites, then bettors are restricted to back betting, which is the traditional form of betting and is the opposite of lay betting. However, if a user visits a betting exchange as opposed to a regular betting site, then they can partake in both back betting and lay betting. 

What does liability mean in lay betting? 

When using an exchange, bettors will see the word liability quite a lot. What’s the reason for this? Well, at betting exchanges, ‘liability’ is used to describe the amount that a bettor stands to lose. 

In the case of the lay bettor, the liability is the amount due to be paid out if the selection wins. For example, if you’d placed a £10 lay bet on Tottenham vs Man United in the recently concluded Europa League final at odds of 2/1 (3.00), you’d have been betting on Tottenham to lose. Since Tottenham got the job done, you’d be paying out. You’re paying out based on odds x stake - stake, which in this case is £20 (£10 stake x 2/1 - £10 stake = £20). 

Essentially, instead of collecting the winnings when placing a regular back bet, if you lay the same bet, you pay out, just like a bookmaker would. 

In a nutshell, liability in lay betting means the amount that you’ll pay out if the bet you lay wins. Remember, as a lay bettor, you’re adopting the role of the bookmaker, so your liability is the same as the bookmaker when they accept a regular bet at certain odds. 

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What does liquidity mean in lay betting?

Since lay betting is only possible via a betting exchange, liquidity is critical. At this point, it’s important to note that betting exchanges differ from traditional sports betting sites as they do not profit directly from losing bets. 

Instead, exchanges are strictly person to person. Betting exchanges act as the go-between for both back bettors and lay bettors. People can back bets, betting for an outcome, and people can lay bets, betting against an outcome. 

As this is the case, for somebody to be able to place a lay bet, there must be enough money from those looking to back the bet that they’re laying, thus creating sufficient liquidity. 

For example, let’s say I wanted to back a horse at odds of 3/1 (4.00), and let’s say that I wanted to put £20 on this bet. Somebody would need to lay me this bet at my required odds, resulting in sufficient liquidity, which in this case would be £20. Likewise, those looking to lay the same bet at odds of 3/1 (4.00), need liquidity, which comes from those looking to bet for rather than against. 

Exchange markets are essentially just pools of money made up from layers and backers. To strike a bet, both backers and layers need liquidity. If there’s no liquidity, there’s no bet. 

What does commission mean in lay betting? 

Since lay betting is only possible via a betting exchange, users must pay commission on their winnings. The reason for this is simple. Betting exchanges operate on a person-to-person nature. In other words, you’re not betting against the operator, you’re betting against other bettors. The betting exchange is merely a facilitator, meaning that all users, whether they’re backing or laying, must pay a small commission on winning bets. Otherwise, what's in for the betting exchange?

The commission you pay typically depends on what sort of user you are. Regular users typically pay 1-2% commission on winning lay bets, while newer or infrequent users typically pay 3-5% in commission. 

Here’s a handy and simple equation to work out the commission that you’ll pay: 

Commission = stake x odds - stake x commission rate 

At Matchbook, for example, all users from the United Kingdom and the Republic of Ireland pay a flat rate of 2% commission. The commission is only charged on net profit, not total returns or losing bets. Users from other territories pay a flat rate of 4% commission. 

How to place a lay bet with Matchbook

One of the best lay betting sites (otherwise called betting exchanges) available to UK bettors is Matchbook, which is a fully licensed and established betting exchange that has been in operation for many years. 

If you’re not familiar with betting exchanges or are new to lay betting, then here’s a step-by-step guide on how to place a lay bet with Matchbook: 

1. Firstly, if you don’t have an account, click on the link below to make sure you get your £50 in free bets via FIRST. This link will take you directly to the signup page. From there, register for an account. 
2. Once you have an account, log in and deposit. 
3. After depositing into your Matchbook account, find the event that you want to bet on. 
4. From the event page, find the market that you wish to place a lay bet on. 
5. You will see two odds columns, one blue, one pink. The pink column in the lay column. 
6. Click the pink column odds of the selection that you want to lay, enter your stake, check the liability, then place the bet by hitting the green tick symbol on the right.

The best lay betting sites 

At FIRST we’re quite taken by what’s on offer at Matchbook, as mentioned above, though there are other options for potential layers. Let’s look at the top alternatives to Matchbook below.

Betfair 

Considered as the king of exchange betting sites by many, betfair is the United Kingdom’s biggest and best known exchange. Of all the exchanges available to UK players, betfair’s offering is the most plentiful, not only in terms of sports available for betting, but in terms of market selection. Betfair is also the UK exchange with the most liquidity, resulting in industry best odds on many occasions. 

Smarkets

One of the newer cats on the UK exchange betting scene, Smarkets provides users with a slick, super easy-to-use exchange platform. Compared to most UK sportsbooks, Smarkets offers better odds across a variety of sports and markets, though there’s not as much in terms of variety and choice. Moreover, the liquidity at Smarkets is worse than you’ll find at betfair. One of the positives of using Smarkets is that standard-tier customers pay only 2% commission on net winnings, which is less than betfair. 

Pros and cons of lay betting 

There are pros and cons to all types of betting, as is the case with most things in life, and lay betting is no different. See below for the pros and cons. 

Pros of lay betting: 

• Remove bookmaker margin: As lay betting occurs on the exchange, you’re cutting out the bookmaker margin, which in traditional betting is something that goes against you as the bettor. 

• More in favour: One of the pros of lay betting is that for some sports, such as horse racing, it’s often easier to identify a potential loser than a potential winner. 
• Trading potential: Lay betting on exchanges creates the potential for trading, which is when you lay a bet at one price and then back at another price, locking in a profit regardless of the outcome. 

Cons of lay betting 

• Increased risk: As a pure layer (not as a trader) you often take on more liability than you would as a backer.

Read more: What does BTTS mean in betting? 

FAQs

Is lay betting legal in the UK? 

Yes, lay betting is legal in the UK. As long as you’re using a legit and licensed provider, such as Matchbook, betfair or Smarkets, then lay betting is totally legal for users situated in the United Kingdom. 

Can I lay bets from all betting sites? 

Unfortunately, the answer is no. You cannot lay bets using traditional online betting sites, this is because the traditional online betting sites are the ones laying the bets. Users can only lay bets using betting exchanges, such as Matchbook, betfair and Smarkets. 

What happens if you lose a lay bet? 

Losing a lay bet is the opposite of losing a regular bet, also known as a back bet. If you lose a lay bet, you’re not losing your stake as you would with a back bet, instead you’re losing the potential winnings of the person backing the same bet. 

Can you make money from lay betting? 

The short answer is yes, though lay betting is no shortcut to easy profit, that’s for sure. To potentially make any sort of money from lay betting, you need to work hard at it; it takes time and effort, so if you think you’re going to easily profit from laying bets, think again.