Tutorial 3

Betfair Exchange Market

6 - How Lay bets work

As we have explained before, a layer is always simply backing that the event will not occur. Laying the home team is the same as betting against the home team. If you Lay a horse in a race, you will be victorious if any of the other horses wins the race apart from your horse.

Laying a result often involves greater probability of winning, as it backs all the other outcomes. However, there are consequential inconveniences. 

When a back bet is won, the winnings are proportional to the odds. For instance, if you wager 20€ with a 2.5 odd, your earnings will be 2.5 * 20€ in case you win, which makes it 50€, 30€ of profit. In a betting exchange, your winnings will be payed by the player who matched your bet, placing a lay bet against yours. The amount payed by the other player is far higher than his stake.

The player who layed your bet works as a traditional bookmaker, to whom you would have to pay if you would lose your back bet. On the other hand, if the traditional bookmaker lost against you, it would have to pay your winnings. That value is called liability.

A few examples

  1. You wager 10€ laying a horse with an odd of  7.0, and your liability will be 60€, 10*(odd-1), that is the amount removed from your account. If the horse loses, you will win 10€ wagered by someone who backed that horse, and the 60€ from the liability are returned to your account. In case you lose your bet, that is to say, if the horse wins, you lose the 60€ from the liability which will pay up a victorious player who backed that horse.
  2. You wager 10€ against Spain with an odd of  2.5. In case Spain wins the match you'll lose 15€, and if Spain loses the match you win 10€.

Now that you know how Betfair works and what are the main differences between a Betting Exchange and a Traditional Bookmaker, there are some ideas you should keep in mind:

  • Although it is possible, when applying DoubleBetting's technique you should avoid placing a bet with odds proposed by you, as it is very unlikely to be matched within the time you need, and thus making your unmatched bets depend on luck.
  • Always remind to check if the odds you pick have the maximum stake amount you need before you place your bets.
 

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