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Back Bets and Lay Bets Explained
Back Bets
You are probably already familiar with a Back Bet, it is just a bet that you place with a bookmaker when you are betting for an event to happen.
You might just think of this as a "normal bet" but in matched betting we call this a back bet as you are betting for a specific event to happen.
An Example would be placing a Bet on Betfred for Harry Kane to Score a Hat-trick at 7/1 Odds with a £10 Stake.
Lay Bets
A Lay Bet is simply the opposite of this where you are on the other side of the bet "playing the bookmaker" meaning you are betting AGAINST an event to happen.
If the event DOES happen you lose money. And if it DOESN'T happen you gain money.
If you place a Lay Bet and the event DOES happen (meaning you lose) you have to pay the Stake multiplied by the (Lay Odds - 1) e.g. £10 Stake x 1.02 = £10.20.
If you place a Lay Bet and the event DOESN'T happen (meaning you win) you gain the Stake amount. It doesn't matter what the Lay Odds are, you will only gain the Stake. e.g. £10 Stake = £10.
Lay Bet on Smarkets
In the Lay Bet AGAINST Chelsea above you would gain £10 if Chelsea Don't Win as this is the Stake.
BUT, you would Lose £10.20 if Chelsea Do Win since the Odds are 2.02. Exchanges call this the Liability and its circled above.
Back Bet and Lay Bet Examples
Back Bet Example
Imagine the Odds for Kane to score a Hat-Trick are 7/1 on Betfred (or 8.0 in decimal odds), and you place a £10 Back Bet on this event. There are 2 possible outcomes listed below.
1) Harry Kane Scores a Hat-Trick (You Win the Bet)
You win the Bet with Betfred since you placed a Bet on Harry Kane to score a Hat-Trick and he DID Score.
You will receive £80 from Betfred since the back odds were 7/1 and your £10 stake is returned with the multiplication of this added.
2) Harry Kane DOES NOT score a Hat-Trick (You Lose the Bet)
You Lose the Bet to Betfred as you had a Back Bet on Harry Kane to score a Hat-Trick and he DID NOT.
You Pay Out £10 to Betfred as this was the Back Stake you selected for the Bet.
This is an example of a Back Bet, but imagine we flip it around so that you and Betfred Swap Roles.
This would mean that you would win the £10 Back Stake if he didn't score a Hat-Trick, but you would have to pay out the £80 to Betfred If he did score a Hat-Trick. This is a Lay Bet, and you can see our Lay Bet example below.
However we can't do a Lay Bet with bookmakers like Betfred, so instead we place Lay Bets on Betting Exchanges like Smarkets, Read through our Betting Exchange Guide to learn more about this.
Lay Bet Example
Imagine the Lay odds for Real Madrid to beat RB Leipzig are 2.36 on Smarkets. The odds are in decimal form as it's easier to calculate. 2.36 = 34/25 in fractional form.
On Smarkets the You Click the Green Box to Place a Back Bet and Click the Blue Box to place a Lay Bet.
When you Click the Blue Box as shown below, a Bet Slip will pop up allowing you to place a Lay Bet on Real Madrid, meaning you are betting AGAINST Real Madrid.
Next, you select a Bet Stake and this is what you will gain if Real Madrid DON'T WIN. We selected a £10 Stake.
Using the Bet Stake and the Lay Odds we figure out what we stand to Lose if Real Madrid DO WIN. This is called the Liability, and here it is £13.60 as you calculate (2.36 - 1) x £10 = £13.60
You can ignore the return as this is simply the Liability + Stake. It shows what would be returned to the Back Bettor, but we are Laying this bet.
Back Bet Odds
Lay Bet Odds
Liability
Lay Stake
Lay Odds
For this lay bet there are two possible outcomes and these are listed below.
1) Real Madrid Don't Win (You Win the Bet)
This could mean they either Lost or Drew against RB Leipzig.
You win your Lay Bet on Smarkets as you bet a £10 Stake AGAINST Real Madrid and they DID NOT WIN.
You will win the £10 Stake that you chose in the Betslip and you don't have to pay out the Liability.
2) Real Madrid Win (You Lose the Bet)
Real Madrid DO WIN and you had a Lay Bet Against Real Madrid so you lose this bet.
This means you pay out the Liability of the Lay Bet to Smarkets. Remember the calculated Liability was £13.60
So you don't gain the £10 Back Stake and you have to pay out £13.60, this is the same process a bookmaker like Betfred goes through when they pay out somebody winning a bet.
Now you should fully understand what a Back Bet and Lay Bet is so you should be ready to complete your first Sign-up Offer in the Sign-up Offer Tutorial Page where you use Lay Bets to take advantage of Free Bets from Bookmakers.
If you still need help with figuring out how to place a Bet with a Betting Exchange you should check out Our Betting Exchange Guide.
Read Below to see how we use Lay Bets to guarantee profits in Matched Betting.
How we use Lay Bets to Guarantee Profit in Matched Betting
Betting Exchanges are essential for matched betting due to the feature that they allow you to do Lay Bets as well as Back Bets. Since you can bet against an event happening, you now have the ability to cover all outcomes and eliminate risk to guarantee profit when you see an opportunity.
Here is an example showing how, using Smarkets, you can eliminate any risk by placing Back Bets and Lay Bets on the same event:
You place a £10 Back Bet on Betfred for Tottenham to Win Vs Arsenal at Odds of 3/1, so you gain £30 if Tottenham Win.
You also place a Lay Bet on Smarkets AGAINST Tottenham to Win Vs Arsenal at Odds of 3/1 and you place a £10 Lay Stake meaning you lose £30 if Tottenham Win, but gain £10 if Tottenham Don't Win.
You now have both outcomes covered and there is no risk involved, however you do not make any profit, since the bets cancel each other out. The possible outcomes are listed below.
1) Tottenham Win Vs Arsenal
Betfred: +£30 As you had a £10 Back Bet on Tottenham to Win at 3/1 Odds on Betfred.
Smarkets: -£30 As you had a £10 Lay Bet on Tottenham to Win at 3/1 so you pay out £30.
Overall: +£0 As you gained £30 on the Betfred, But also lost £30 on Smarkets.
2) Tottenham Lose OR Draw Vs Arsenal:
Betfred: -£10 As you had a £10 Back Bet on Tottenham to Win so you lose the Stake.
Smarkets: +£10 As you had a £10 Lay Bet on Tottenham to Win so you gain the Stake.
Overall: +£0 As you lost £10 on the Betfred, But gained £10 on Smarkets.
This simply shows how to remove the risk from a bet, but imagine if instead of staking £10 for your Back Bet you are instead using a Free Bet. This would allow you to guarantee a profit, as now you would no longer be risking the Back Stake on the Bookmaker since its a Free Bet.
Bookmakers offer these Free Bets all the time and almost all bookmakers in the UK have Sign-up Offers, just like in the image, where you will get a Free Bet upon Signing up.
To unlock the £30 in Free Bets you must first "Bet £10", but all you need to do is place a Lay Bet on the same event on Smarkets and you should profit £0 Overall, but you gain the £30 Free Bet on your account.
You can make around £500 from Completing all of the Sign up Offers, and you can see the full list of UK Bookmakers with guides on how to do each offer on Our Sign-up Offer List Page.
However Sign-up Offers aren't the only time that bookmakers offer Free Bets, they run offers and promotions daily to encourage more people to bet with their specific site.
There are many promotions that matched bettors can profit from and you can learn these methods in Our Guides, with each promotion you learn bringing you one step closer to making £500 Every Month.