Your Guide To The Betfair Exchange
If there’s one concept that’s foreign to new users of Betfair, it’s lay betting.
As we’ve covered previously, Betfair isn’t a bookmaker: it’s a betting exchange.
You’re not betting against a bookie. You’re betting against other punters who are taking the opposite side of the wager. All Betfair does is facilitate the transaction and collect a commission from the winner.
So when you back a horse to win, there needs to be somebody else backing it to not win. That’s lay betting.
Just remember with lay betting: it’s the opposite of backing, so you need to flip everything on it’s head.
An easy way to think of it is you’re playing the role of traditional bookmaker: you take a stake off the punter backing the horse. If it wins, you pay them out at the agreed odds. If it loses, you keep their stake.
For example, you might lay a $10 stake on a runner, at odds of $5.50.
Your liability is $45; that’s what you owe the backer should the horse salute. At odds of $5.50, they collect $55: your $45 payout, plus the return of their $10 stake. Simple.
If the horse gets beaten, like you thought it would, you collect the $10 stake from the backer, less commission. Commission works the same on Betfair whether you’re backing or laying – you pay a percentage of the profit (in this example, a percentage of the $10) back to Betfair.
Let’s look at the same example market we’ve been using…
Looking again at The Exchequer (#3), we see that the best lay price currently available is $3.
Again, with lay betting you flip everything on it’s head. Obviously a lower price is better, because it means your liability is lower in the event that the horse wins and you lose the bet and have to pay out.
The market displays this by ranking the prices in the reverse order to what it does for backing: $3 is the best available, followed by $3.45 and then $4.20.
If you were to lay a $10 stake on The Exchequer at the odds of $3, the bet will cost you $20 (your liability). You’re betting $20 to win $10.
When backing a horse, you want to bet at value: when it’s over the odds. “Value” when lay betting is horses that are under the odds: you can bet at a lower price than the horse’s true chances.
So lay betting may be a foreign concept to what you’re used to, but once you get your head around it it’s really quite simple. Backing a horse “not to win” is certainly a different experience… one that might even give you a little empathy for what it’s like for a bookie to watch to a race!