What is Back and Lay in Betting

I remember it like it was yesterday, the launch of Betfair in 2000. You never see a poor bookie, the bookie always wins, well this was the chance to log on to Betfair, lay odds on favourites that you didn’t fancy and nick a few quid laying the rags that stood no chance. Of course, it was nowhere near as easy or straightforward as it seemed, I deposited £100 and promptly lost it the same afternoon.

The principle is very simple, you pick a selection to either win or lose a race, acting as either the punter or bookmaker, and you’re able to back or lay as many selections as you like, effectively making a book – what could be easier?

This is an example of a racecard on Betfair, showing the prices available to both back (blue column) and lay (pink column) in addition to the amounts available. Remember that all figures shown are in decimal odds, so 3.0 is 2/1. You can also see that alongside the current prices are the prices in the queue, so when all of the £11 at 2.58 is taken the price automatically becomes 2.56 (a shade bigger than 6/4 in fractional odds). Now you will also see that the figures in the lay/pink column are always higher than the back/blue column. This is the margin between the price you are able to back and lay at, more of which later.

This link will help with conversion from fractional or traditional odds to decimal.

So in a nutshell, you decide whether you want to back or lay a horse, if you are happy with the price available and your stake is accommodated then the transaction is on, if not then offer the price and stake you are after and hope somebody matches the bet. You are not placing bets with a bookmaker, you are exchanging bets with other punters, pitting your judgement against theirs.

Simple isn’t it!

Contents

What is Back-to-Lay Betting?

Imagine being a market trader, it really doesn’t matter whether you’re working on the stock exchange or have a stall selling strawberries. You are going to buy your stock at a set price and then try to sell it at a profit. Capitalism in its purest form.

Well now we’re going to apply that principle to betting, specifically on the exchanges as that is the only (legal) means of laying a bet. This requires a different mindset to simply deciding the outcome of a sporting event, what we have to establish now is whether the price of a horse, football team or tennis player will become higher or lower. If we back a horse at 3.0 (2/1) and at some point the price becomes 2.0 (evens) we are now in a position to lay the horse for a guaranteed profit. So if I place £40 at 3.0 my potential return is £120, I then lay it for £60 at 2.0 meaning a guaranteed profit of £20 regardless of whether it wins or loses. Of course if I let the original bet run I may win £80 or lose £40, but by backing to lay I lock in a profit. The example I have given is very basic, in reality the numbers are more complicated. So what I’m doing is not looking to predict which horse wins a race, I’m looking for horses that I think will attract significant money for it to shorten in the betting. 

This process is called arbitrage, or “arbing”, which is when a player bets on all possible outcomes of an event and makes a profit no matter who wins.

https://www.timeform.com/betting/arb-calculator

This link supports the example I’ve used and allows you to experiment with staking and odds.

Benefits of Back-to-Lay Betting

The obvious benefit is the ability to lock in or guarantee a profit regardless of the outcome of a race. The skill is in predicting not outcomes but market movements, it’s very easy to get stuck with a bet that isn’t shortening or, even worse, lengthening. Of course if it wins you collect and its possible to lay at the same price and minimise losses, effectively what we’re doing is trading a market and not just trying to find winners.

Think about stables that like a gamble, find out the Pricewise selections or newspaper tipsters early in the morning, these are the types that shorten in the betting and present back to lay opportunities. 

What is Lay-to-Back Betting?

We’ve established how and why we back to lay, now let’s look at the process in reverse, deciding which horses we can lay at 2.0 and back at 3.0 and lock in a profit regardless of the outcome. Think of the example above, but now we’re looking for horses that we think will drift in the market, false favourites if you like. Again, don’t get hung up on the outcome of the race, look for horses that you think are too short in the betting. By all means simply lay them and let it run, but we’re looking at a trading strategy to lock in a profit regardless of the outcome. It’s important to point out that predicting horses that drift from 2.0-3.0 is far from simple, but the concept is analysing not which horse will win a given race but pinpointing those that will drift on the market.

A start point would be horses that favour fast ground with rain forecast, every chance the odds will lengthen during the day. Or those in tv races where the paddock commentator points out runners that are sweating or not looking well. Look for horses where the trainers have had previous fancied runners perform badly, suggesting the stable is under the weather.

So using your arbing tool in reverse, calculate your loss to the nominated stake at the current price and then the required stake to lock in a profit as the price drifts.

Benefits of Lay-to-Back Betting

Something to remember here, laying a horse at 3.0 or 2/1 is the equivalent of backing a horse at 0.5 or ½, you may well decide you’re happy to lay a horse at 9.0 to lose 8 times your stake, but when was the last time you backed a horse at ⅛. If we back a horse at 3.0 and it drifts to 3.0 that’s a 50% increase, exactly the same as laying at 9.0 and hoping it drifts to 13.0. So it pays to concentrate on the top of the market where horses attract more money and are easier to monitor and therefore trade.

The benefits are obvious in as much as we’re looking for a guaranteed trading profit, so concentrate not on looking for losers but predicting which horses will drift in the market.

Differences And Similarities

What type of punter are you? Perhaps you’re not really a punter, maybe predicting outcomes of horse races doesn’t interest you, in which case there is money to be made in analysing market movements and trading your position. Think honestly about your mentality and psychology, do you want to study form, the going, the draw, trainer form etc or are you more proficient in deciding which horses will shorten or lengthen in the market. Form and other components play a part in that, but we’re ignoring racing results and looking to predict market movements, we’re traders not punters.

Pros & Cons of a Backing and Laying Strategy

The pros here are obvious, we back a horse at 3.0 and as soon as it shortens we use our arbitrage tool to lock in a profit. Or we simply put a up a lay bet at shorter odds than we backed at to the stakes required and wait for someone to back it. But of course it’s not that simple, bets don;t always get matched and horses don’t always shorten. Even if they do the trades will produce very small profits unless you’re betting to large stakes.

It comes down again to your betting mentality, are you a punter or a trader? Can you predict outcomes or market movements? When trading the chances are the gains and losses so will be as great as when punting, but are you suited to ten trades a day hoping make a few quid on each one? The bloke with the stall at the market doesn’t like strawberries, he’s predicting that he can sell them at a price higher than he bought them. If he can’t he’s left with a van full of strawberries and he’s lost his money.

Implementing Back-to-Lay and Lay-to-Back Betting

The obvious place to start with back to lay is horses that are strongly fancied that you can back confident in the knowledge, or at least expectation, that the price will shorten. Think gambling stables in handicaps, perhaps ante post, interviews with trainers suggesting the horse has come to form and is working well, connections known to lay one out for a punt. But these probably don’t happen on a daily basis so look for horses that you consider to be overpriced, that price is irrelevant, back it accordingly and look to lock in a profit using the arbing calculator.

Lay to back is a far riskier strategy, unless you’re laying at odds on you’re exposing yourself to potential large losses which you may not be able to move out of. We’re looking for drifters, those of us of a certain age will remember Barry Dennis and his Bismarks, if you’d known before he went on air which horse he was looking to lay you’d have made a profit every week. Regardless of the outcome, every single one drifted in the market. Stop looking for losers, look for horses you consider to be too short in the market.

When can you use backing and laying strategies?

The answer to this is simple: in every race everyday. In every horse race in history where a betting market has been formed, prices have fluctuated due to volume of money, or lack of. A bookie will shorten the odds if people are backing a horse and lengthen the odds if they’re not. If you are planning on laying horses your mindset is about predicting not what wins the race but what loses it, and there’s always more losing runners than winners so it’s easy, right? Lay the three outsiders at 33/1, they’ve got no chance. But they win from time to time and if you’re laying at £1 each each your potential gain of £3 is weighed against a potential loss of £31. Remember that your position need not end at the off, it is very possible to back and lay horses in running. This can be tricky due to time delays and how dexterous you are, but if you’re hoping to lay or back a horse and your trade hasn’t been matched at the off, you may still have the opportunity during the race itself. The ability to read a race can be very advantageous.

Being a bookie is easy, until you become one.

How to Make Money with Back and Lay Betting?

Let’s get to the nitty gritty of making a profit from backing a horse at a certain price and laying at a lower price to lock in a profit.

The obvious first step, decide which horse you think will shorten in the market at some stage, and remember this includes in-running. 

Let’s look at some examples of horses that are likely to shorten in the market, by this we mean horses that are likely to attract money and be well backed. This may involve placing bets early in the morning or even the night before. The majority of betting will take place in the time leading up to the race, and indeed during the race itself, and remember we are not hoping to find the winner we are predicting where punters will be placing their bets. Remember in this instance you are acting as both punter and bookie, poacher and gamekeeper if you like, you are examining where you think punters will place their bets and act accordingly. Let’s give some examples.

Think about Mark Prescott’s horses having their first run in a handicap (usually their 4th race), as a rule these horses are heavily backed, get on as early as you can, before everyone else.

Get hold of the Racing Post as early as you can, for years the Pricewise selections have shortened considerably, these provide very good trading opportunities.

On a friday evening have a look at the following days racecard and check out the televised handicaps, look at the runners trained and/or ridden by the top stables. Log on to betfair and check the prices, in the blue column (the price you are able to back at) look at how much money is available, not just at the price available but in the two columns alongside. The basic rule is that we are looking to analyse the market in terms of how it will move for an individual horse. Of course you can do this with as many runners in a race as you wish but it may be prudent to start with one.

Let’s start with an ordinary race and look how the market moves in respect of individual horses.

If we now click on the graph icon to the left of Apiarist it shows us this chart

We can see that Apiarist was matched at a high of 7.43 (almost 13/2) and a low of 3.78 (11/4). This is a good example of identifying a horse that will attract money, backing it and then trading out at a much lower price. As it transpired Apiarist lost, but this is irrelevant, we backed a horse at a high price than layed it as it shortened, which guaranteed a profit.The figures involved can be complicated and the arbing calculator will be required, so let’s look at a straightforward trade.

For the purpose of this exercise let’s assume the horse is 5.0 or 4/1. We place a bet of £44.44 at 5.0 giving a return of £222.20. We then wait for others to back the horse so it shortens in the market and lay the horse at 4.0 for £55.56 giving a loss of £222.24. Meaning that regardless of the outcome we make the difference between £44.44 and £55.56 which is £11.12.

Now this might not suit your approach or mentality, but everyday using the arbing calculator you will find opportunities such as this.

Where to Place Back & Lay Bets

Backing horses or placing lay bets is simple, there are dozens of online bookmakers that will take your bets, but of course this strategy relies on laying the horse as well. The largest betting exchange and one with the most liquidity is Betfair, but smarkets and matchbook.com are also worth looking at. These companies make their money by charging commission on transactions so check out the t & c’s. And remember that it’s very possible to make money by backing a horse with any bookmaker or exchange and laying it on another exchange. Just be sure to keep a record of your transactions.

Step-by-Step Guide on How to Lay a Bet

Let’s look at this race, the 3.35 at Sandown, you decide that Field of Gold will not win, or drift in the market, or possibly both. The current price you can lay it at is 2.38, 11/8 in fractions. So if somebody backs it with you for £8 and it wins you lose £11 and return the stake. £32 is available, which means that another punter or punters would like to back the horse at 2.38 for £32. Interestingly, others want to back it at 2.4 and 2.42 for £18 and £177 respectively. So you hit the pink box, enter the stake you are prepared to accept which will calculate and display your liability. So if you take £10 of the £32 available your liability is 10 x 1.38, £13.80. You stand to lose more than you gain.

There is no limit to the horses you may back or lay in any race, as long as the liquidity in the market allows you to. The volumes traded on the Grand National massively exceed those in a bumper at Fakenham.

Now if your strategy is to back the horse once it lengthens in price, hit the blue button, select the price you want to back it at with the stake you require, and hope that somebody matches the bet. 

Horse Racing Tips

Tipping horses eh? Most of us have been doing that for years, with varying degrees of success or failure. Systems, ratings, tipsters, hunches, paddock study, I’ve tried them all.

What type of punter are you – can you spend hours analysing the Stewards Cup or do follow trainers in form or top rated selections? We’re all different, backing longshots means losing runs that sap your confidence as much as your wallet and there’s nothing worse than piling on a good thing at a short price that gets beat.

If you’re thinking about laying horses or a strategy that involves market movement your mindset will need to change, profit and/or loss assessed over a longer term. It’s very possible to make a profit but it will involve plenty of time staring at your laptop with lots of small gains. It doesn’t work for many.

Conclusion

To conclude, if you’re considering a different approach or strategy in your betting then give laying, backing to lay and laying to back some serious thought, but as with all other methods do some research and start off with low stakes. You’ll make basic errors and need to understand how betting exchanges operate. Above all else remember you are not betting with a traditional bookmaker, you are up against other punters who are as fallible or expert as you.

And remember the golden rule of poker, if after the first hand you haven’t worked out who the mug is, it’s you.

Be lucky.