What is Lay Betting, What is a Betting Exchange. Is it Complicated to Lay Bets?
As a beginner to matched betting, you may get put off by the betting exchange part of the process. Following your ‘back’ bet, matched betting guidance says to then ‘lay off’ your bet or ‘place the matching bet at the exchange’, what does this mean, and how is it done?
This article hopes to demystify and help matched betting beginners with lay betting, giving a solid understanding of why we use the betting exchange for matched betting.
Laying bets - It's Actually Quite Simple!
Laying a bet at a betting exchange is quite a simple process, but it can feel daunting and worrisome as it often involves large parts of your bankroll.
It’s essential to lay at the exchange properly to grow profits relatively quickly without delay, and therefore to have ample bankroll available is vital. If you don’t have to wait for bets to settle before placing new bets, then your profits can come much quicker.
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What is a Betting Exchange?
The critical difference of an exchange to a traditional bookmaker is that you bet against other people (i.e. you ‘exchange’ bets).
The most common exchanges we use in Matched Betting are Betfair and Smarkets. The usual activity is to place ‘lay bets’ (at a betting exchange, you can also make sportsbook back bets, but that is not the typical reason to utilise the exchange).
When you place a bet with a bookmaker, you are putting money behind an outcome occurring (for example, you bet that Man United will win the cup final), and by agreeing to take on the bet with you, the bookmaker bets that they will not).
You're the Bookmaker
When you lay a bet at a betting exchange, you are instead acting as if ‘you are the bookmaker’ in that you are betting that an outcome will not occur.
For this example, a matched betting lay bet, or ‘to lay’ Man United is to bet that they will not win (a draw is also not a win and works for the same). The basis of matched betting is that the back and lay bets are matched, and no gambling is taking place (this is why we use a matched betting calculator).
Covering all Outcomes
When we say that back and lay bets are covering all outcomes, this means the following:
There are three possible outcomes – home win, away win, or a draw. If you ‘back’ the home team to win at the bookmaker, this covers one outcome. If you ‘lay’ a bet on the home side at a betting exchange then this is saying that the home team won’t win, which covers the draw and away win; the other two outcomes.
Create and Match Your Own Bets on the Exchange
A key factor is that betting exchanges allow you to create your own bets with other customers on the site.
When another exchange member is happy to take that bet, the bet becomes ‘matched’. You must place the correct amount according to your matched betting opportunity.
Lay betting is similar (theoretically) to hedging; you are quite literally hedging your bets!
Back Bet at a Betting Exchange
It is possible from time to time that you will place ‘back bets’ at a betting exchange (more likely when carrying out advanced strategies), so this information is good to know.
Still, more often than not, you will use an exchange to match your bet and lay off the outcome you started with, i.e. the back bet with your bookmaker.
With the early payout (2-up) strategy, we may place additional back bets to lock in profits.
When Things go Wrong - Partial or Unmatched Bets
Common issues that may arise when laying bets at a Betting Exchange include partial or unmatched bets. When you place a lay bet (step by step guide to the Coral offer), you need to ensure you have the necessary liquidity in the market. In the example above, there are odds of 7.8 for the draw with £223 available liquidity.
If you were to lay Slovakia for this game, there is £77 liquidity, so your liability cannot exceed this amount. If there is not, then the bet may be partially or wholly unmatched.
For unmatched bets, Smarkets lets you cancel the bet (click on the little red cross), and for partially matched bets, you can use a partially matched bet calculator to work out how to correct the issue.
If you do accidentally place a bet with insufficient liquidity – don’t panic.
You can often cancel your bet (a little red cross next to the bet on Smarkets) or wait until there is enough liquidity, as the exchange will keep trying to match it. You can also ‘trade out’ the deal at minimum loss.
As a reminder, Liability is the amount you will lose if your bet ‘loses’ (when you are laying a bet, then losing would be a win!). Still, in reality, we do not lose money due to matching all of our bets, and we are either losing a qualifying amount or earn profit from the transaction.
Using a betting exchange is a necessary part of matched betting and something you will do every day, but it can seem quite daunting at first.
It’s essential to have a sufficient bankroll in the exchange so that you can match your bets quickly (and not wait for other bets to complete).
Common exchanges for matched betting are Smarkets and Betfair.
Smarkets also usually have a welcome offer when you open an account with them, and they will refund your first £10 of losses into your account!
Though you can back bets at a betting exchange, most frequently, you will be laying a bet and ‘being the bookmaker’. Laying the bet off means that you have carried out matched betting and covered all potential outcomes, removing gambling from the equation.
Sometimes things can go wrong, but don’t worry. There’s usually a way to rectify things and get back on track, with the worst outcome being a minimal loss when you correct things.
Note – It is also possible to lay bets without using an exchange, with the technique of dutching (using bookmakers for the back and lay bets).