Understanding what lay betting is (Part 1)

An area of betting guaranteed to cause confusion for many is lay betting.

I quite often talk about "laying on Betfair" to people who otherwise thoroughly understand betting, but who don't have a clue even what the term means.

More often than not, they will then glaze over when you try to elaborate on the basic - it's when you bet on something to lose rather than to win.

However, if you have read this fair then clearly you do want to know. So here I will give you my take on how it works.

Let's begin by looking at a football match from this weekend and the odds available on that match.

Chelsea were largely available at 1/5 to beat West Ham. The draw was 11/2 and West Ham were around 12/1 for the win.

Let's say you had a feeling it was a game Chelsea weren't going to win. You were not sure whether it would be a West Ham win or a draw, but you wanted to place a bet on.

Before the advent of Betfair, your only option would be to, for example, place £5 on the draw and £5 on West Ham to win. Total outlay is £10 but you don't know whether your profit would be £27.50 or £60.

With Betfair, you can LAY Chelsea. So as long as they don't win the match. You will be in profit.

Moreover, you can set how much you want to win, although obviously your liability (how much you lose) will increase the higher you go.

Using the Chelsea / West Ham example. Chelsea were available at 1.23 to lay on Betfair (see here for an explanation of how decimal odds work if you aren't sure).

If you laid Chelsea @ £43.50 you would be liable to lose £10 (£43.50 * 0.23 = £10).

But as long as Chelsea lose, or draw, you would have £43.50 profit regardless of the result.

As long as you understand the concept of this with regards to football, it should be easy to make the transition to other sports.

Finally a WARNING - quite often people's first reaction once they understand the concept is to think about laying big priced horses in races they seemingly have no chance of winning. While accepting they will lose £50 if they lay a 25/1 shot on Betfair in order to win £2 (Betfair insists on a minimum stake of £2 so your liability is 25 * £2= £50), I can tell you first hand that it is surprisingly easy to pick a 25/1 winner when you don't mean to.

So please don't think that just because a horse is highly priced, you have a lower risk. 25/1, 50/1 and even 100/1 winners come in more often than you think.

However, where laying can be to your benefit is when it comes to "greening up" or cutting your losses, which we will look at in the second part of this article.