Backing: the bet you already know
A back bet says something will happen. It is the ordinary bet: you put up a stake at agreed odds, and if you are right you are paid the stake multiplied by the odds, less your stake.
On an exchange the odds are written as decimals. Odds of 3.0 mean a winning $20.00 bet returns $60.00: your $20.00 back, and $40.00 of profit.
Laying: taking the other side
A lay bet says something will not happen. When you lay, you are doing what a bookmaker does: accepting somebody else's back bet. If their selection loses, you keep their stake. If it wins, you pay their winnings.
This is the feature a bookmaker does not offer, and it is also where people new to exchanges get hurt, because of the next idea.
Liability: what a lay bet can cost
When you lay, the amount you can win is the backer's stake. The amount you can lose is their winnings, and that is called your liability:
liability = backer's stake × (odds − 1)
Lay $10.00 at odds of 4.0 and you stand to win $10.00 or lose $30.00. At odds of 10.0 the same $10.00 lay risks $90.00. The longer the odds, the more you put at risk to win the same small amount.
Work out the liability before you place a lay bet, not after. It is the number that matters, and it is not the one you typed in.
Matched and unmatched
A bookmaker accepts your bet the moment you place it. An exchange has to find someone who wants the opposite side at your odds. Until it does, your bet is unmatched. It can also be partly matched: half of it taken, half still waiting.
Only the matched part is a bet. Check what was matched before assuming you are on.
Commission: how the exchange is paid
A bookmaker earns from the margin inside its odds. An exchange charges a commission instead. Betfair takes it from your net winnings in a market, and takes nothing if you finish that market with a net loss.
The examples below use a rate of 6%, the Market Base Rate Betfair listed for sport markets other than NRL.
| The bet | If you are right | If you are wrong |
|---|---|---|
| Back $20.00 at 3.0 | Win $40.00, pay $2.40 commission, keep $37.60 | Lose $20.00, no commission |
| Lay $10.00 at 4.0 | Win $10.00, pay $0.60 commission, keep $9.40 | Lose $30.00, no commission |
The examples assume each bet is the only one you have in its market. Rates differ between sports and racing codes and Betfair can change them. The review lists the rates and the other charges it publishes.
What an exchange does not change
- A different way of setting odds is not a way to win. Whatever the price, betting is a cost and not an income.
- Laying is not the safe side. It wins more often on outsiders and loses much more when it loses.
- The legal limits do not change either: identity checked first, no credit, and no in-play sports bets online. They are set out, with their sources, in the rules.
If you decide to look at an exchange, settle on a deposit limit first. The safer gambling page shows what can be set and where to find help.
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