When the first betting exchanges were launched in April 2000 it heralded a new dawn in gambling especially in the case of horse racing. The basic concept was that instead of betting with a bookmaker the bet was struck between two punters with the exchanges acting as “go between”.
In the UK punters also had to come to terms with using decimal odds instead of fractions. However, the big change was the fact that for the first time it was possible not only to back a horse to win or be placed but also to lay it to lose. This was a totally new concept and one that has become increasingly popular during the last decade.
It is often pointed out that it is far easier to select a loser than to find a winner. Consider in a fourteen runner race only one horse can win but there will be thirteen losers. So one assumes that a great number of gamblers have made huge sums backing horses to lose. But strangely enough that does not appear to be the case as Betfair report only a very small percentage of its millions of users make more than £15,000 per annum from their betting activities.
The drawback with laying horse to lose is that if your horse does win you will have incurred a liability. For instance if you lay a horse for £10 that is price at 3.0 (2/1) and it wins you have to pay out £20. In the event of the horse had being priced at 11.0 (10/1) you would then have to pay £100. In either case if the selection did lose you would win just £10 (£9.50 after paying Betfair commission). You could of course restrict yourself to laying just short priced horses but they statistically tend to win more often. If you concentrate on higher priced horses they may win less often but when they do your liability is considerably higher. It is also worth noting that for the outsiders the Betfair odds are usually considerably larger than the bookies starting price odds.
On Betfair the prices tend to be around 20% above those offered by the bookmakers. Of course you also have to take into consideration the 5% commission charged by the exchanges. If you are thinking of trying lay betting another point to consider is that you will have to lodge enough money with the exchange to cover any liability that you might incur. For instance if you laid £10 on a horse to lose priced at 11.0 you would have to have at least £100 in your exchange bank to cover the bet in the event of the horse winning.
If you think the risk of possibly losing £100 just to try and make £9.50 then lay betting may not be for you.