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What is lay betting?

A description of what lay betting is and how it differs from normal 'sports book' betting. How to place a lay bet using an exchange.

Video links to help explain.

If you still have questions, email us at...

contact@mkklion.com

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What is lay betting?

Lay betting means betting on something NOT to happen.

Backing is when you want something TO happen.

 

Traditionally, you could only 'back' a horse to win.  The bookmaker at the racetrack, then in betting shops and then online, would only let you choose horses that you wanted to win ('back').  The bookmaker would take the risk if the horse won and would pay out, but if your 'back' bet lost, they kept your stake.

It was like this for years, until betting exchanges appeared.

​With traditional bookmakers, running a 'sports book', it's you against them.  The more you win, the more the bookmaker loses.  This is why you read stories about successful gamblers having their online accounts suspended or being blocked.

Betting exchanges work differently.  They offer odds to 'back' horses to win, but also offer odds to 'lay' horses to lose.  The exchange puts backers and layers together, one against the other, but never against the exchange.

Imagine a fruit and veg market. The fruit and veg seller offers their products and displays the price.  You decide you want to buy and agree the price - usually what the seller advertises - but it's a contract between you the buyer and the fruit and veg seller.  The market charges the fruit and seller rent for their stall.  You aren't competing against the marketplace.  This is the same as betting exchanges. But this time, you can be the seller.  Selling bets is 'laying'.  

To help you, the exchange suggests the price. You simply decide to offer the 'lay' bet at the odds suggested and wait for someone to place a corresponding 'back' bet.

You want the horse to lose (like a bookie). The other person wants the horse to win.  If the horses loses, you keep their stake (like a bookie).  If the horse wins, you payout (like bookie).  Did you notice the reoccurring phrase, "like a bookie"?  Laying bets through an exchange gives you the opportunity to behave like a bookmaker.

Our model finds horses every day to lay using an exchange. We lay the bets hoping the horse loses. Backers who think the horse will win bet against us. The exchange puts us together.

That's lay betting.

Betting on horses hoping they will lose, just like a bookie.

Understanding the betting exchange screen

We are using matchbook.com to explain lay betting.

Betting exchange screens may look complicated with multiple numbers and colours, but it can be explained quite easily. 

 

The first thing that stands out are the blue and pink boxes. 

The blue boxes represent what’s available to ‘back’.

Back betting is where you want something to happen, e.g. you want the horse to win. 

 

The bold pink column represents what’s available to ‘lay’.

Lay betting is where you are betting on something NOT happening, e.g.  you don’t want the horse to win. 

We are only interested in lay betting and pick horses that we DON’T want to win.

 

Look at the numbers in the pink boxes. 

  • The bold numbers are the odds

  • the smaller numbers below shows how much money is available in the market for each horse. 

  • Exchange operators match gamblers who want to back and who want to lay together. 

  • The monetary values show you how big that market is for each horse.  You don’t really need to worry about the liquidity value. 

 

Focus on the bold PINK column for lay bets.....  

 

You can see that betting exchanges use digital odds, instead of the traditional fractional odds that betting is known for. Once you get used to digital odds, it's actually quicker and easier to compare the odds between horses, e.g.

  • The 1st favourite, 'Light Em Up Nigel', is 3.8.

  • The 2nd favourite, 'Pepe Le Mono', is 3.85

  • The 3rd favourite, 'Flat White', is 4.4

  • The 4th favourite, 'Lock Out', is 7.4

... so you can see the odds lengthening. The market expects this to be a tight race between the first two horses, 'Light Em Up Nigel' and"Pepe Le Mono'.

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Watch the video made by Matchbook...

"Understanding the Matchbook betting exchange layout"

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Placing a lay bet on Matchbook

We are using matchbook.com to explain lay betting.

 

The following instructions tell you how to place a lay bet, but the process is the same for any other betting exchange.

  • Log in.

  • Find the race you want to bet on. 

  • You will see numbers in blue boxes and numbers in pink boxes.

  • If you are viewing the odds on a desktop computer with a larger screen than a mobile phone, you will see two more sets of numbers in white boxes, either side of the blue and pink boxes. Ignore them.  Focus on the pink boxes only.

  • Click on the pink box for the horse that you want to lay.

 

In this example, I click on the pink lay box for 'A Cheap Thrill'.

The betslip then appears on the right hand side and I can either enter my stake or the liability.  The STAKE (£2.63) is what you stand to win if the horse doesn’t win. The LIABILITY (£20) is how much you stand to lose if the horse does win and you have to pay-out.

To make life easy, so that you can use the same value for every race, I enter the amount in the LIABILITY box that I am willing to lose. The app then calculates the stake for me.  This way, I control how much I could lose for each race.

How much should your LIABILITY be?  See below.

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Watch the video made by Matchbook...

"Placing a lay bet on Matchbook"

  • If you are happy, then click the ‘place bet’ button at the bottom of the screen, to make your bet.

  • Confirm and then the exchange will match you bet with someone who thinks the same horse will win.

  • And that’s it.

  • The exchange will take the value of your liability and hold it in escrow.  If the horse loses, you get the liability amount back and you are awarded the stake, minus the exchanges commission.

  • Wait for the race to run and smile when your horse loses.

So, now you are probably thinking I can lose a lot more than I win. 

But think about

  1. how often the favourite horses do NOT win their race,

  2. using our model we work hard to deselect the horses that might win and target those horses with the greatest statistical chance of NOT winning, and

  3. bookmakers make millions of pounds of year collecting those losing bets, whilst still paying out when a customer’s bet wins.  We are behaving like the bookmaker, not the gambler, expecting many more horses to lose where we collect the stakes, that to win and we have to pay out.

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How much should I bet?

The honest answer is, "the maximum you should bet, is the maximum you are prepared to lose". I know that sounds easy, but you'll know when you bet an amount that you don't feel comfortable with.  Your heart rate goes up, your palms get sweaty.  That's no fun. So, like the mathematical way we select which horses to lay, we have a mathematical model that calculates how much to bet - and it's very simple.

The Bankroll

How much you bet is calculated as a proportion of how much money you have in your betting account - your 'bankroll'.

There are then two ways you can decide how much to bet

  1. The 'Fixed' Bankroll

  2. The 'Racheted' Bankroll (we use this method)

The 'Fixed' Bankroll

This is where you fix the LABILITY VALUE at an amount you feel comfortable with.  You choose how much you are prepared to lose on each race, considering we do our best not to pick winners, so we don't want to pay-out.

This method makes it easy to control how much you gamble on each race and also, when your bankroll exceeds your starting investment, you can withdraw money and enjoy your winnings.

e.g.

Set the LIABILITY RATE at 3% of your bankroll.

Imagine you deposited £500 into your betting exchange account.

Your LIABILITY AMOUNT is then £15 (3% of £500). This is the value that you enter on the betslip in the 'LIABILITY' box.

The benefit of this method is...

  • you control how much you risk losing, so it doesn't get out of control.

  • your liability remain the same every day, so it's easy to remember what number to type in.

  • setting your LIABILITY RATE at 3% of your starting bankroll, means you can can afford to pay out 33 winning horses in a row before you have lost all your money - but consider that our model avoids picking winners.

  • If at some point, you feel comfortable raising the LIABILITY VALUE, recalculate it again at a higher percentage of your current bankroll, but remember, as your potential profits go up, so will the amount you pay-out on winners.

  • Personally, I find 3% a comfortable liability level.

The Rachet System

This is the system that we use when we gamble with our own money. We want to grow our profits as the bankroll increases, yet keeping the same risk level. It is similar to the 'Fixed' Bankroll method, except we replace 'Fixed' with 'Racheted'. 

Each time the 'highest' bankroll value goes up, our LIABILITY AMOUNT is recalculated at 3% again.

e.g.

  • Day 1

    • we start with £500. We've chosen our LIABILITY RATE as 3%, so our LIABILITY AMOUNT is £15.

    • Let's assume after Day 1, we've made £50 profit.

    • Because the 'highest' bankroll has increased from £500 to £550, we recalculate the LIABILITY VALUE at 3% of the new 'highest' bankroll of £550 = £16.50

  • Day 2

    • Imagine at the end of Day 2, we've made another £50 profit.

    • Our 'highest' bankroll is now £600, so we recalculate the LIABILITY VALUE as 3% of £600 = £18

  • Day 3

    • Oh dear, we lost £20, so our 'current' bankroll has fallen from it's highest level of £600 to £580.

    • This time, we DON'T recalculate the LIABILITY VALUE. We let it continue as 3% of the 'highest' bankroll, not 3% of the 'current' bankroll amount.

    • So, our LIABILITY VALUE remains at £18 (3% of £600).

The advantage of this system is that your profits will grow faster because we are effectively compounding the profits each time the 'highest' bankroll value goes up. The LIABILITY VALUE (and consequently the STAKE VALUE) goes up, but the risk level remains constant. 3% in this example.

We've found that 3% feels a comfortable level of how much money we are prepared to lose on each race, as a proportion of our bankroll, but you can choose your own LIABILITY VALUE. Increase it if you want higher returns and risk. Lower it if you want to reduce payouts and the impact on your bankroll of winners.

What is the commission charge?

Betting exchanges typically charge 2-5% only when your bet wins.

 

You will not pay a commission if your bet loses and you pay out. 

Sounds good, but remember, the exchange doesn’t care who wins because their job is to put the ‘back’ better together with the ‘lay’ better. So, whoever wins, they collect their commission. It’s how the exchanges make their money.

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Watch the video made by Matchbook...

"What is commission?"

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Racing

05 FEB: Model 23R   27% profit,  20 of 23 profitable days 

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