Lay Betting

100% Rating
Let us know if you found this guide helpful.

To understand Lay Bets, lets first look at Back Bets, or skipping ahead to Laying an Outcome.

Backing an Outcome Back Bet

A Back Bet is the typical bet you place at a bookmaker, where you bet on a specific outcome to happen. For example, in a football match between Team A and Team B, you might place a Back Bet on Team A to win.

Key Terms for Back Bets
  • Stake • The amount of money you wager on the bet. (e.g., 10€)
  • Odds • We will use Decimal odds for the following. (e.g., x1.5)
    There are also Fractional odds (e.g., 1/2) and American odds (e.g., -200), but all of them can be used interchangeably. Let's stick to Decimal odds for simplicity, as we can just use it as-is in our calculations.
  • Payout • The total amount you receive if your bet wins, which includes your original stake plus your winnings. It is calculated as Stake × Odds. (e.g., 10€ × 1.5 = 15€)
Possible Outcomes of a Back Bet
  • If Team A wins, your Back Bet wins, and you receive your payout of 15€, which includes your original stake of 10€ and your profit of 5€.
  • However, if Team A does not win (i.e., they lose or the match ends in a draw), your Back Bet loses, and you lose your stake of 10€.

Now that we understand Back Bets, let's explore Lay Bets.

Betting Exchanges

Unlike traditional bookmakers, where you place bets against the bookmaker, betting exchanges allow you to bet against other users. This is where Lay Bets come into play.

Instead of the betting exchange offering odds, you (and other users) can offer odds at your likings.

But, since you are not betting against the platform, and instead against other users, someone else has to pay for your profit if your Back Bet wins.

Laying an Outcome Lay Bet

A Lay Bet is the opposite of a Back Bet. When you place a Lay Bet, you are betting on a specific outcome NOT to happen.

Continuing with our football match example, if you place a Lay Bet on Team A, you are betting that Team A will NOT win the match (i.e., they will either lose or the match will end in a draw).

Key Terms for Lay Bets
  • Liability • The amount of money wager on the outcome to NOT happen.
  • Stake • In the context of a Lay Bet, it is the stake of the corresponding Back Bet you are covering. Essentially, this is the amount you will win if the outcome does NOT happen.

  • Odds • This represents the odds of the Back Bet, which you are covering with your Lay Bet.

    To clarify, to get the correct odds for your Lay Bet, you must invert the odds of the Back Bet.

    Lay_Odds = Back_Odds / (Back_Odds - 1)
    1.5 / (1.5 - 1) = 3

Essentially, when you place a Lay Bet, you are acting as the bookmaker, offering odds to other users who want to place a Back Bet on the same outcome. Or if the Lay-Odds already exist, you are accepting the odds offered by other users.

And for that, you need to set your Liability, which will pay for the profit of the Back Bet, placed by another user, if the outcome comes true.

Placing a Lay Bet

Let's say you want to place a Lay Bet on Team A to NOT win the match. You find a user who has placed a Back Bet on Team A to win with odds of x1.5 and a stake of 10€.

To cover this Back Bet, you need to place a Lay Bet under the same terms, meaning you place a Lay Bet with:

  • Stake: 10€ (the stake of the Back Bet)
  • Odds: 1.5 (the odds of the Back Bet)
  • Liability: 5€ (the potential winnings of the Back Bet, also the money you will lose if Team A wins)
Possible Outcomes of a Lay Bet
  • If Team A does NOT win (i.e., they lose or the match ends in a draw), your Lay Bet wins, and you receive the stake of the user who placed the corresponding Back Bet in the amount of 10€ as profit.
  • However, if Team A wins, your Lay Bet loses, and you have to pay out the winnings to the user who placed the corresponding Back Bet. In this case, you would have to pay them your Liability of 5€.
How to Calculate Lay Bets?

Above, we explained the concepts of Lay Bets and how they work, but only stated the stake and liability without explaining how to calculate them.

So, let's go through the calculations step by step.

We always need 2 pieces of information to calculate the third. Typically, we always know the Odds, so let's focus on how to calculate the stake from the liability and vice versa.

Calculating the Lay Stake

For that, we need the odds and the liability. (e.g., 1.5 and 5€)

The formula to calculate the stake is:

Lay Stake = Liability × (Lay_Odds - 1)
5 × (3 - 1) = 10 — remember, Lay_Odds = Back_Odds / (Back_Odds - 1)

Calculating the Lay Liability

And to calculate the liability, we need the odds and the stake. (e.g., 1.5 and 10€)

The formula to calculate the liability is:

Liability = Lay_Stake / (Lay_Odds - 1)
10 / (3 - 1) = 5

And that's it! You now know how to place and calculate Lay Bets.

Summary

A Lay Bet is the opposite of a Back Bet, where you bet on an outcome NOT to happen. You are matching the profits of Back Bets placed by other users, under the same terms (stake and odds). And the liability is the amount you will lose if the outcome comes true.

Commission on Betting Exchanges

Since your losses are the profits of other users, betting exchanges don't make money from your losing bets like traditional bookmakers do. Instead, they charge a small commission on your winnings as their fee for providing the platform.

This is typically a percentage of your winnings, and should be taken into account when calculating your bets.

The easiest way to account for commission is to calculate your effective odds after commission:

e.g. odds of 3 with a commission of 3%:
Effective_Odds = 1 + (Odds - 1) × (1 - Commission)
1 + (3 - 1) × (1 - 0.03) = 2.94

Just make sure to never invert the effective odds, as it will lead to incorrect results.

If this guide was helpful to you, consider leaving a donation to support the site.