I’m sure many of you have heard of “Laying” often sold as being an easier way to profit on the horses. Of course, it’s easy to sell this idea because out of 12 runners in a race, 11 of them will go onto lose whereas only 1 will win. Betting on Horses to Lose may appear easier at first, but once you delve into the risks involved and how lay betting works, you’ll soon realise that it’s just as risky as picking a winning horse.
In this article, we are going to take a closer look at what lay bets are, how they work and the liability associated with a lay bet:
What are Lay Bets?
With a lay bet, you are effectively backing something not to occur. If you were to lay a horse in a race, then you would be backing it not to win. If you were to lay a football team then you would be backing it not to win.
So yes, lay bets are the direct opposite of back bets.
How do Lay Bets Work?
Lay Bets are only available on betting exchanges such as Betfair and Betdaq. How they work is you are basically matching some else’s back bet on the betting exchange. If someone was to back a horse for odds of 4.5 then you would match this bet by laying the same horse for 4.5 – Don’t worry, the betting exchanges make this whole process incredibly simple and you don’t have to worry about finding people to match these bets with.
What Liabilities are Attached to a Lay Bet?
This is where you will fully understand the risk attached to a lay bet. With a back bet, you know exactly how much money you are risking: If you bet £10 on a horse at 3.5 then you know if the horse loses then you will lose your £10 and if it wins you will profit £25.
With lay betting, it’s the complete opposite. You profit is your stake value, so if you were to lay a horse with £10, then if the horse loses then you would profit £10.
Your risk is calculated using the following formula:
(Your Stake Value x Your Odds) – Your Stake Value
So if you were to lay a horse with £10 at odds of 2.5 then your total risk would be £15. If the horse loses then you profit £10 and if it wins you would lose £15. OK, so that doesn’t sound too bad. But if a horse has odds of 2.5 then it is probably the favourite and chances are that it will go onto win in a lot of cases.
So what if you were to lay a horse that was a clear underdog with odds of… 44.5? A £10 stake would still see a £10 profit but if the horse did go onto win, you would be looking at a loss of… £435! Yes, you would lose £435 from ONE bet.
Understand the Problem?
It’s all about having a system in place for picking horses that don’t look like they will win, but with odds low enough for your risk to be fairly small.
There is however one way around this and that is by working to a fixed liability. This means you adjust your stake value so you know how much you are risking on each bet. To work this out, you would use the following formula:
Your Fixed Liability / (Odds – 1) = Your Stake
Of course the stake value is also your profit. So if you had a bank of £500 and were to set your fixed liability at 5% of this bank and let’s say you were laying a football team at odds of 3.9 then you would have a stake value of £8.62 so if the team goes onto win, you would lose £25 and if it loses then you would win £8.62.
So there you have it, all you need to know about lay betting!