What Is Lay Betting?

What is lay betting? It’s a bet that something will not happen. When you lay a horse, you are betting that it won’t win the race, and you take the role a bookmaker normally plays: you accept someone else’s bet and pay them out if the horse wins. Lay bets are placed on a betting exchange such as the Betfair Exchange or Smarkets, where punters bet against each other rather than against a bookmaker. This guide covers how laying works, how to work out what you can win and lose, what exchanges charge and why laying horses is not the easy money it can look like.

What is lay betting?

Every bet has two sides. With a bookmaker you always take one side, backing a horse to win, and the bookmaker takes the other. An exchange lets you take either side. Lay betting explained in one line: you win the backer’s stake if the horse loses, and you pay the backer’s winnings if it wins.

Betfair’s own help pages define laying as backing something not to happen. If you lay a horse in a 12-runner race, you win if any of the other 11 horses wins. That makes a lay bet more likely to win than a back bet on the same horse, but it also means the money you risk is usually larger than the money you stand to win.

Back and lay: the two sides of the same bet

A back and lay pair is the same bet seen from both ends:

	Backer	Layer
Bets that the horse…	wins	doesn’t win
Puts up	the stake	the liability
If the horse wins	collects stake x (odds - 1) in profit	pays that amount to the backer
If the horse loses	loses the stake	collects the backer’s stake

On an exchange, the backer’s stake and the layer’s liability are both held by the exchange until the race is settled, so neither side has to trust the other to pay.

What “liability” means

Liability is the most you can lose on a lay bet. It is the amount the backer would win if the horse wins, and the exchange takes it from your balance when the bet is matched. The formula is:

Liability = lay stake x (decimal odds - 1)

Exchanges quote decimal odds only, so if you think in fractions, our odds converter turns 4/1 into 5.0 and back again.

How does Betfair Exchange work?

People often ask how does Betfair Exchange work when they first see the screen. The short answer is that it’s a marketplace. Some customers want to back a horse at a price, others want to lay it at a price, and the exchange matches the two and holds the money. Betfair doesn’t set the odds or take a view on the race. It earns its money from commission on winning customers, explained further down.

Matching backers with layers

Say you want to lay a horse at 5.0 for £10. Your offer sits in the market until a backer wants to back that horse at 5.0 for up to £10. When they do, the bets are matched: the backer’s £10 and your £40 liability are both locked by the exchange. If only £6 of backing is available, £6 of your bet is matched and the other £4 waits for another backer.

Betfair Exchange explained in these terms is much simpler than the screen makes it look. You can take a price somebody else is already offering, which gets you matched straight away, or ask for a better price and wait for someone to accept it.

Reading the ladder: back and lay columns

Each runner on an exchange shows two sets of prices. The blue column is where you back and the pink column is where you lay. Under each price is the amount of money available at that price. An example of one runner (figures for illustration):

Back		Lay
4.9	£320	5.1	£180
4.8	£1,150	5.2	£640
4.7	£2,400	5.3	£910

Here you could back at 4.9 straight away for up to £320, or lay at 5.1 straight away for up to £180 of backer’s stake. The gap between 4.9 and 5.1 is the spread. A busy market has a narrow spread and plenty of money at each price, which is what traders mean by liquidity. Big UK races on the Flat and over jumps tend to have deep markets. Small meetings and early prices can be thin, with wide gaps and only a few pounds available.

Unmatched bets

If you ask for a price nobody is offering, your bet is unmatched and nothing is at risk until somebody takes it. Betfair’s help pages say unmatched bets lapse by default when the event starts and the money returns to your balance. On horse racing you can change that: the “Take SP” option turns the unmatched part into a Betfair Starting Price bet at the off, and “Keep” leaves it in the market when the race goes in-play. For how the Betfair SP compares with the bookmakers’ starting price, see our guide to what SP means in horse racing.

How to calculate lay bet winnings and losses

The maths for laying horses has only two outcomes in a win market. You lay £10 at 5.0 (4/1):

• Liability: £10 x (5.0 - 1) = £40.
• If the horse loses: you win the backer’s £10. At a 5% commission rate you pay £0.50, so you keep £9.50. At a 2% rate you’d keep £9.80.
• If the horse wins: you pay the backer £40. No commission is charged on a losing market.

So you risk £40 to win £9.50. You need the horse to lose more than four times out of five just to break even, which is exactly what odds of 5.0 say should happen. Our odds calculator shows the implied chance behind any price: 5.0 is 20%.

Lay stake versus liability

On an exchange, the lay stake is the backer’s stake you are accepting, which is also your maximum win before commission. Some people work the other way round and start from the most they’re willing to lose. To do that, divide the liability by (odds - 1). If you can afford to lose £30 laying at 7.0, your lay stake is £30 / 6 = £5. Our lay bet calculator works either way round and takes off the commission, and when there’s a matching back bet the matched betting calculator works out lay stake and liability together.

Liability at different prices

The same £10 lay stake carries very different risks depending on the price:

Lay odds	Lay stake	Liability	Win after 5% commission
1.5	£10	£5	£9.50
3.0	£10	£20	£9.50
5.0	£10	£40	£9.50
11.0	£10	£100	£9.50
21.0	£10	£200	£9.50

The win is always the same. Only the risk changes.

Commission and fees on UK exchanges

Exchanges charge commission instead of building a margin into the odds. You pay it only on net winnings in a market, not on each bet, and never on a market where you lose overall.

Betfair Exchange commission

Betfair’s support pages describe a Market Base Rate of 5% for UK customers, which is the maximum commission on most markets. A Discount Rate, earned through Betfair Points, can bring the rate down. Betfair’s own worked example: net winnings of £400 at a 5% base rate with a 40% discount cost £12 in commission. The full rules are on the Betfair commission page.

On top of commission, Betfair charges an Expert Fee to a very small number of its most profitable customers (it says fewer than 0.5%). It only applies to accounts with more than £25,000 gross profit over their last 52 active weeks and bets in more than 100 markets, and the rate is capped at 40% of gross profit. Most punters will never pay it.

Smarkets commission

Smarkets’ help centre gives its standard rate as 2% of net winnings in each market, with no commission on a net loss. It also lists other tiers for very active or very profitable customers. See the Smarkets commission breakdown for the current terms.

Rates change and promotions come and go, so check your exchange’s own commission page before you rely on any figure.

Laying horses: why it isn’t easy money

The pitch for laying is simple: most horses lose, so bet on them losing. It’s true that most horses lose. It’s also true that the prices already reflect that, and the layer pays commission on top.

Laying an outsider

Laying long shots looks safest, because they rarely win. Take a horse at 21.0 (20/1). You lay it 20 times at £10 a time and it loses every time. You collect 20 x £9.50 = £190. The 21st time it wins and you pay out £200. One winner wipes out twenty losers and leaves you £10 down. A layer of outsiders can be right for months and lose it all in one race.

Laying the favourite

Laying favourites flips the risk. Lay a favourite at 1.5 for £10 and you risk only £5 to win £9.50, so the lay stake is larger than the liability. The catch is how often it wins. At 1.5 the market rates the horse at about a 67% chance, and you only profit over time if it wins less often than that, by enough to cover the commission.

How to lay a horse

If you decide to try it, the steps for how to lay a horse are the same on every exchange:

1. Open the race and find the win market (or the place market, see below).
2. Click the pink lay price next to your horse.
3. Enter your lay stake and check the liability shown on the bet slip.
4. Confirm, then check in your open bets whether the bet is matched or unmatched.

Start with small stakes. The bet slip shows your liability before you confirm, and that’s the figure to look at, not the stake.

Laying the field

Some punters lay every runner, or several runners, at a very low price during a race, betting that a horse traded in-running at, say, 1.2 won’t always go on to win. This is usually called laying the field. It can look attractive because liabilities at very low odds are small, but it relies on reading races in-running, prices move in fractions of a second, and in any race where the low-priced horse does go on to win, the lay on it loses. Treat it as an advanced strategy and test it with small stakes. Backing several horses so you profit whichever wins is a different technique, dutching, and our dutching calculator works out those stakes.

Trading on an exchange

Because you can both back and lay the same horse, you can bet on the price moving rather than on the result. This is trading.

Back high, lay low

The classic trade is to back a horse at a high price and lay it later at a lower one. Say you back a horse for £10 at 6.0 in the morning, and by the afternoon its price has shortened to 4.0.

Greening up: a worked example

To lock in the same profit whatever happens (greening up, because the exchange shows profit in green), lay at 4.0 with a stake of back stake x back odds / lay odds:

• Lay stake: £10 x 6.0 / 4.0 = £15.
• If the horse wins: the back bet makes £10 x 5 = £50, the lay costs £15 x 3 = £45. Net +£5.
• If the horse loses: the back bet loses £10, the lay wins £15. Net +£5.

You make £5 either way, less commission on the net win (£0.25 at 5%), so £4.75. If the price drifts out instead, the same maths locks in a loss. Betfair’s Cash Out feature does this calculation for you, placing bets on the market at live prices, but Betfair notes the cash out value isn’t guaranteed because prices move. Many traders use dedicated tools, and our guide to horse racing software covers exchange trading software.

Place markets on exchanges

Exchanges also run place markets for horse races, often labelled “To Be Placed”. You can back or lay a horse to finish in the places, and the number of places paid is shown with the market. That number may not match the each way terms a bookmaker offers on the same race, so read it before you bet.

Laying in a place market is a common way of opposing a horse more cautiously than laying it to win. Lay £10 at 2.2 in a place market and your liability is £10 x 1.2 = £12. You win if the horse finishes outside the places.

Betfair Sportsbook vs Betfair Exchange

Betfair runs two different products, and the difference matters:

	Betfair Sportsbook	Betfair Exchange
Who you bet against	Betfair, which sets the odds	Other customers
Can you lay?	No	Yes
Odds format	Fractional or decimal	Decimal only
Multiples (doubles, accas)	Yes	No
Charges	Margin built into the odds	Commission on net winnings

Betfair’s help pages also point out that the two have separate rules, so in rare cases a bet can settle differently on each.

Which UK exchanges offer lay betting?

You can only lay on a betting exchange, not with a normal bookmaker. The main exchanges open to UK customers are Betfair Exchange, Smarkets, Matchbook and Betdaq, and the companies behind all four hold active UK Gambling Commission betting intermediary licences on the Commission’s public register. Betfair has by far the deepest horse racing markets. On a smaller exchange the same race can have less money at each price, so a lay at the price you want may take longer to match.

Lay betting in matched betting

Many people first ask what is lay betting because a matched betting guide told them to lay a horse. Matched betting uses a lay bet to cover a bookmaker bet. You back a horse with a bookmaker to qualify for a free bet and lay the same horse on an exchange, so the two bets roughly cancel out. Then you do the same with the free bet, which turns most of its value into cash.

A qualifying example: you back £10 at 5.0 with a bookmaker and lay at 5.2 on an exchange charging 5%. The lay stake is £10 x 5.0 / (5.2 - 0.05) = £9.71, with a liability of £40.78. If the horse wins you make £40 on the back bet and lose £40.78 on the lay. If it loses you lose £10 and win £9.71 less commission, £9.22. Either way you are down £0.78, the cost of unlocking the free bet. The matched betting calculator does these stakes for qualifying bets and both kinds of free bet.

The risks of lay betting

Any honest answer to what is lay betting has to include the downside. The two big risks are the size of the liability and mistakes. Laying the wrong horse, laying in the place market when you meant the win market, typing 50 instead of 5.0, or leaving a bet unmatched when you thought it was covered can all cost far more than a back bet would. Check the liability on every slip before you confirm.

Exchanges also make it easy to bet quickly and often, especially in-running. Decide what you’re prepared to lose before you start, and if betting stops being fun, our responsible gambling page lists the tools and support available, including GAMSTOP self-exclusion.

Betting always carries a risk of loss and no tipster, system or staking plan can guarantee a profit. Only stake what you can afford to lose, and set a budget before you start. Gambling responsibly.

Frequently asked questions

What's the difference between back and lay bets?

A back bet wins if the selection wins, while a lay bet wins if it fails to win. The backer risks a stake to win a profit. The layer accepts that stake and risks paying the backer's profit, which is why lay bets are only possible on betting exchanges.

How do you calculate lay bet winnings?

Your winnings are the lay stake minus commission, and your possible loss is the lay stake multiplied by the decimal odds minus one. Laying £20 at 4.0 risks £60 and, at 5% commission, returns £19 profit if the horse fails to win.

Which UK betting sites offer lay betting?

Lay betting is offered by betting exchanges rather than ordinary bookmakers. In the UK the main ones are Betfair Exchange, Smarkets, Matchbook and Betdaq. Betfair carries the most money on racing, which usually means faster matching at the price you ask for.

How much is the commission on Betfair Exchange?

For UK customers the Betfair Exchange commission is up to 5% of net winnings on a market, according to Betfair's support pages. Betfair Points can earn a discount on that rate, and nothing is charged on markets where you lose overall.

Can you cash out on Betfair Exchange?

Yes, Betfair Exchange offers Cash Out on eligible bets, including partial and automatic versions. It works by placing further bets on the market at the live prices, so the value offered moves with the market and a request can fail if the market suspends.

What is the difference between Betfair and Betfair Exchange?

Betfair is the brand and runs both a Sportsbook and an Exchange. On the Sportsbook you bet against Betfair at prices it sets. On the Exchange you bet against other customers, can lay as well as back, and pay commission on net winnings instead.