The positive side of this is that you can bet against a favorite in a large field rather than having to bet on one specific outcome other than the favorite, but be careful, because just like the bookmakers, you’ll pay out their winnings if you lose.
Pros & Cons of Backing and Laying
- Pro - You can cut out the middle-man, which is the bookmaker, which also means removing the margins which favour them each time you bet.
- Pro - You can get better best odds. By creating your own betting odds, you can sometimes create best odds that a backer with a strong opinion may be willing to match.
- Con - Beware of your liability. Your liability is the amount you will lose, because you’ll need to pay the other bettors winnings for losing sports bets.
- Con - Whilst you can get better best odds and negate any margins, Betfair do charge a standard 5% fee on winning sports bets.
Backing and Laying is about betting on something to happen (backing) or betting against it to happen (laying). On a traditional bookmaker with the double chance betting markets you may bet on 1X which is the home side and the draw or X2 which is the away side and the draw. On a sports betting exchange you would just lay the team you want to oppose. By laying them (betting against them) you are creating the same market.
Take the double chance market for example. Let’s say you feel the away side has the edge, but the home side are favoured. Instead of backing Draw/Away as you would with a bookmaker you simply Lay the home side. This is the same as betting against them.
Just to recap so things are perfectly clear. The Back option is all about betting on something to happen. You back Over 2.5 goals, you back the home team, you back both teams to score. If you are using the lay option then you are betting against something happening. You think there may be Under 2.5 goals, the home side will fail to win or both teams to score will not happen.
The Backing/Laying process…
A lot of bets placed on the exchange are not made with the intention of letting things play out over 90 minutes. Trading is more about working yourself in a position of guaranteed profit from sports betting using multiple betting markets, or just into a position where you are happy to cash out for maximum profit during the game.
It’s also about being both proactive and reactive. Entering a game with preconceived ideas can lead to mistakes. You have to be willing to accept the limits of a bet and cash out when necessary, as well as admitting defeat in instances where it means you can hedge a bet to protect yourself and your bankroll overall. Trading is about correctly identifying what the betting odds will do next and how you can exploit that.
Team A are hosting Team B. Team A don’t too often lose at home to Team B, but the visitors are in very good form and have made a few quick starts recently. Given the unpredictability of some of these fixtures, Team B look too big a price. You lay Team A which enables you to cover Team B and the Draw pre-match. You get odds of 2.20. Your bet is £10. Your page will look something like this before placing your bet.
Once you have placed your bet you will notice the following alongside the outcomes. You have used the match market outcome to lay the home side. Underneath each outcome, you will see what your potential profit and loss is.
If the home team wins, you will lose -£12.00. You have bet against them (like a bookmaker), and so you will need to pay out someone who bet on them. The bigger the odds, the more you’ll pay out when losing.
If Team B wins the game then you have a successful lay (bet against) of Team A for a profit. You will double whatever you bet when winning.
If The Draw wins the game then you have a successful lay (bet against) of Team A for a profit. You will double whatever you bet when winning.
That should give you a better idea of how to place a back or lay bet and where you then stand, but the sports betting exchanges are a mystery to newcomers. Just logging on to a sports betting exchange for the first time and seeing the above can raise quite a few questions and spark confusion, so here’s a quick run through of some questions you may still need answering.
- Why so many odds? This is an exchange. You offer your own betting odds and hope to be matched, or you match someone else's odds. Originally odds of 2.15 may have been the best odds to Back Team A, but since they have increased to 2.18 and then 2.21.
- So I can set any odds I want? Technically, yes. But if you come along and ask for 4.00 on a 2.00 bet, no one will match you. You’ll have a hard job getting someone to agree to be liable for £40.00 when the outcome should be priced around 2.00.
- What does ‘Liability’ mean? When you place a bet, the corresponding betting markets will tell you how much you will profit from sports betting if this happens, or how much you will be liable for (stand to lose) if this happens. Your liability is what you could potentially lose.
- I only bet £10… Why is my liability £12? Laying odds of 2.20 means you’re betting against that. You are acting like the bookmakers. The profit on odds of 2.20 would be £12.00. If you match someone's odds of 2.20 and you’re willing to bet against them, you better also be willing to pay their winnings out.
- Does it work the same for backing? No, it doesn’t. When you’re backing you are acting like a traditional punter. You’re just betting on something to happen. If you place £10 and win, you’d be paid out at your odds. If you lose, you only lose your stake which is £10.
Backing and Laying is the traditional way of betting on a betting exchange. You can back and lay in any sport. Even Horse Racing, which usually only offers the opportunity to bet on a specific horse pre-race with bookmakers, gives you the opportunity to lay. Laying in horse racing is particularly popular with some professionals as it gives you the option to bet on the field against a front runner. And backing and laying is indeed largely the choice of the professional bettor. For many casual bettors, the exchange does not live up to the fun and excitement of betting that they seek out.
Backing and Laying can seem complicated at first, but it really is a nice way to bet once you fully understand it. Playing the role of bookmaker when lay betting is one that’s important to understand before you dive in. A loss on big odds can leave you penniless though, so do be careful. However you do get much better odds that can account for the commissions that are charged on winning sports bets. Also, whilst Betfair is the main exchange, there are not that many others, which means liquidity is not spread about and finding a match isn’t hard. Backing and laying is a solid choice for the professional bettor but if you’re new to the exchanges then you’ll need to make sure you develop a firm understanding of backing and laying, hedging your bets and trading your bets.