entertainment sport

Understanding lay bets and how to use them

Horse Racing
Written by Nigel Simpkins

Lay betting is a relatively recent phenomenon that opens up new options for anyone placing a bet on a sporting event. Although it’s most popular in horse racing and football, lay betting can be applied to almost any situation where there are two or more possible outcomes. In modern times this practice has been made more accessible by the rise of online betting exchanges, at which punters bet against each other, rather than against the house.

It’s not going to happen

Lay betting is also known as arbitration betting, or arb betting, and may be done as part of a matched betting process, although it can also be practiced profitably in its own right. With a traditional bet, you are betting that something will happen. You bet that Manchester United will beat Liverpool, or that Lucky Boy will win the Grand National. With lay betting, you are betting that something will not happen: Lucky Boy will not win, Manchester United will not beat Liverpool.

Note that this is not the same as backing a different outcome. You are not betting on any other horse to win the Grand National, just that it will not be Lucky Boy. Similarly, a lay bet on Manchester United not to win is not the same as backing Liverpool to win, as in the case of a lay bet you still succeed in your wager if the match is a draw.

When you should lay a bet

In horse racing, it’s sometimes easier to spot a horse that you’re sure won’t win than it is to pick a winner. If that horse appears to be over-valued by the bookmakers, then you should consider laying a bet against it. To make this judgment, you need as much information as possible about the horse, the trainer, the jockey, the track and the conditions. For a big event like the Cheltenham Festival Gold Cup, you should check out Cheltenhamfestival.net’s Gold Cup tips, though remember that in this case, you’re looking for a loser, not a winner.

If a tip on an outsider seems sound, you might want to consider laying a bet against the favourite, while maybe backing the outsider at the same time. However, there are several factors you need to consider in order to maximise your potential profit and minimise your risk.

Profit and liability

In order to lay bets successfully, you need almost to have a reverse mindset to your usual one when it comes to creating a strategy. The important thing to remember is that your liability is going to be much bigger than your potential win. That isn’t as worrying as it sounds, as you’ll win more often through lay betting than you will by back betting (betting on a horse or team to win).

That is because with lay betting on a betting exchange, you are essentially playing the bookmaker and inviting punters to place a bet with you at the odds you are offering. Obviously, these odds will have to be competitive with regular bookies for you to get any takers. 

The difference for you is that if you back a horse at 5/1 and put down £10, you lose £10 if it loses and win £50 (plus your £10 back) if it wins. If you lay a horse at 5/1, you risk £50 of your own money; if the horse wins, you pay out that £50, and if it loses, you merely get the £10 that the punter placed with you (minus the exchange’s cut, usually about 5%). Clearly, this would be a mug’s game if it weren’t for the fact that you will win more often than you lose.

Trading and matched betting

Trading is when you bet on both outcomes, backing and laying the same horse or team, usually with the same betting exchange. Matched betting is similar except you use a free bet offered by a bookmaker, usually as a welcome bonus, to place your back bet and place a lay bet at a betting exchange. The free bet means you haven’t risked any of your own money in the back bet, so if you get the odds right, you are almost certainly guaranteed a profit whatever happens.

One thing to consider with both trading and matched betting is that however certain you are of a profit, that profit will always be much smaller than the profit you could have made risking all on one bet. In gambling, the big profits always require taking a big risk.