Lay Betting and Betting Exchanges

Lay betting is used to describe bets on an event not happening. When applied to sportsbooks this means punters can bet against a team winning a tournament, or against a horse winning a race. In this context conventional betting on a selection is described as back betting.

Although the concept of lay betting might sound novel to many punters, all simple match bets are effectively lay bets, where the punter could be perceived as betting against a particular team winning the match.

Lay betting is not offered by all sportsbooks, and tends to be offered by betting exchanges like Betfair. Exchanges do not play the role of traditional bookmakers, setting odds while taking in and paying out bets. Instead, their function is to match lay bets against back bets.

Example:

A punter wishes to place a $10 lay bet against Louis Hamilton winning the Formula One driver’s Championship at odds of 3/1. This means the punter is betting on an outcome other than Hamilton winning the driver’s championship.

A betting exchange will allow the punter to enter his odds, and then attempt to match this to another bet where a punter is prepared to wager $30 on Hamilton winning the Formula One driver’s championship for a payout of $10.

If Hamilton finishes second in the championship, and the lay bet wins, the back bet will be paid out to the lay bettor along with the initial stake for a total return of $40. If Hamilton wins the championship the back bet wins, and the back bettor is paid out the $10 lay bet along with the $10 stake for a total return of $20.

Why Participate in Lay Betting and Betting Exchanges?

Betting exchanges are popular because they allow punters to select their own odds. While extreme odds are unlikely to find a match, the prices that can be generated are often better than those offered by fix-odds sportsbooks.

Another advantage in using a betting exchange is that punters can participate in trading.