UNDERSTANDING LAY BETS AND LIABILITY
Lay Bets and Liability
To Lay a bet is to bet that an event will not happen. For example, to Lay Hammarby to win their match versus AIK is to back them not to win, so you would win your bet if they either lose or draw their match versus AIK.
Laying a bet is made possible with exchanges such as Betfair and Smarkets. When you sign up to wager with an exchange, you accept odds placed by members of the public. Exchanges have no interest in whether the Back bet or Lay Bet win as their profit comes from a small commission collected on the winnings.
When you wager with an exchange, you are playing the role of the bookmaker and as with bookmakers, all you can win is the stake. Liability is the amount you could lose should the Back Bet win and so this is locked away by the exchange until the event is complete.
Lay Betting Terms
Lay stake: This is the amount you want to win. Let’s say that your backer’s stake in the lay bet example above was 100kr. Because you layed Hammarby, you will win 100kr (minus commission, explained below) if AIK wins or the match ends in a draw.
Commission: Exchanges such as Betfair and Smarkets charge a commission on your winnings. This percentage is by default 6.5% at Betfair, but the more you turn over at Betfair, the more discount on the commission you receive.
Lay odds: This is the odds of your lay bet. The higher the odds are, the higher the risk (liability) will be.
Liability: The liability of a lay bet is correlated with the stake and odds. A selection where the backer’s odds are 5.0 means that if you lose your lay bet you will lose 4 times your stake. At 2.0 odds you would lose an amount equal to your stake and so on.
Matched/Unmatched: As with any exchange, you place your bets at Betfair/Smarkets against other Betfair/Smarkets customers, not against Betfair or Smarkets itself. Therefore, there must always be a backer and a layer for any bets made. If there is a backer for your lay bet, your bet will be matched. Once a bet is matched it cannot be cancelled, other than by Betfair. If your bet has not been matched, or only partially matched, you can either; cancel your unmatched bet, leave your bet unmatched and hope that it is matched before the event starts, or accept the remaining unmatched portion of the bet at worse odds.