What Is Back-to-Lay Betting?
In gambling, there are various strategies that bettors utilise in order to try and give themselves an advantage and different strategies suit different people. Since the first exchanges became available in the early 2000's backing to lay has been a popular way of strategic betting, on horse racing events in particular, and there is a good reason behind this, too. Anyone looking to get the better of horse racing betting may do well to understand how it works and why it works in your favour.
And that’s what we are here for – to give you more of an insight into how back-to-lay betting works. Any strategy is there to help reduce the risk included in gambling, and through back-to-lay bets, you have the opportunity to either lock in a profit or minimise the losses that you will potentially experience.
A betting exchange may look like a standard sports betting site from the first look, but it works in a different way. Instead of you placing bets against the bookmaker, you place wagers against other bettors at an exchange, i.e. peer to peer - the exchange simply takes a commission on winning bets. Therefore, you are not limited to the odds that the bookies set, nor are you restricted in the options you can back. You can back bets on an exchange in the same way you back bets with a normal bookie, the difference being that it is another person taking your bet not the bookie itself. Conversely you can lay a bet to someone else, in effect becoming your own micro-bookie, you win in this scenario if the selection you lay loses.
How Does a Back-to-Lay Bet Work?
A back-to-lay bet, while used often for horse racing events, isn’t something that is exclusively used for that sport. It can be put to work for any kind of sporting event, if you know what you’re doing.
Let’s look at an example to further describe how it works. Let’s say that you have seen a selection with a price that you believe to be too big. Take, for example, Manchester United to win the FA Cup at 10/1 instead of at 8/1. You take the decision to place a bet of £100 on it, and eventually, the market odds catch up to you. This sees the price lower to 8/1. Through a traditional bookmaker, you could only hope that Manchester United actually does go on to win for a positive result. With a betting exchange, you aren’t quite as limited as that, though.
Instead of letting that bet ride things out, you have the option of laying a stake on Manchester United at odds of 8/1, and this allows you to lock-in a profit. This happens regardless of whether the team actually wins the FA Cup or not. How much should you wager on this kind of lay bet? Well, all it takes is a simple calculation –
The return of the initial bet ÷ the price you will be laying at.
Using an odds calculator, the fraction of 10/1 converts to a decimal of 11.0, and if that bet was placed with £100, you would receive £1,100 back in winnings. The 8/1 fraction converts to 9.0 as a decimal, so this means that you need to do the following calculation to find out how much you need to lay the bet for:
£1,100 ÷ 9.0 = £122.22. Therefore, you would need to lay the bet at £122.22 in this particular example.
If your bet with the bookie wins you win £1000 (£1000 winnings and you £100 stake back). You have to pay out on the lay bet though, here you have £122.22 x 8.0 = £977.76. You therefore have a profit of £1000 - £977.76 = £22.22.
If your lay bet wins (i.e. Man United don't win the cup) then you win £122.22 - your £100 stake you backed at = £22.22
If Man United win the cup or not you have guaranteed yourself a £22.22 profit.
If you increased your stakes here to say a £1000 initial bet then the guaranteed profit would be £222.22, etc.
By covering both the football team winning the event via your chosen bookmaker and the football team not winning the event at a betting exchange, you are certain to come out of it with some profit. And this is why many sports bettors utilise such a strategy – so as to provide themselves with an advantage over the bookmaker.
In effect you can do this with any odds discrepancy between a bookie and an exchange. You can also do it all on the exchange if the odds change, e.g. you back something at 5/1 and the odds lengthen to say 7/1 (either pre-event or in-play).
To work out how much you need to lay multiply the price you backed the selection at (in decimal) by the stake. Take this value and divide it by the lay odds (minus exchange commission) you wish to lay at. This gives you your lay stake, i.e:
(Price you backed at x stake) / (odds you want to lay at - exchange commission).
Calculating what you would win if the selection wins is simply a matter of taking the odds you backed at in decimal, minus 1, multiplied by the back stake. Take this and subtract the lay odds, minus 1, multiplied by the lay stake:
((Odds you backed at -1) x stake) - ((lay odds -1) x lay stake).
To work out what you will get if the selection loses multiple the lay stake, subtraction 1 minus commission, minus the stake you backed at:
(Stake you lay at x (1 - commission)) - stake you backed at.
You may think that back-to-lay betting is not something you can frequently take advantage of, but you just need to know where to look. Multiple opportunities have arisen in the past that could be utilised to the bettor’s advantage. Cast your mind back to 2016 when Leicester City won the Premier League. At the start of the season, not many people could really say that they took advantage of the 5,000/1 odds given on the team, because it just seemed so impossible that they would win the whole thing.
One man did back Leicester City at those odds and bagged himself a nice payout of £20,000 as a result. Yet for most gamblers, they only started paying attention to wagers on Leicester once they had demonstrated what they were all about in 2016. The Foxes were sky riding, securing wins left and right, and sportsbooks ended up changing their odds to around 150/1. It was only then that sports betting fans sat up and took notice.
Of course, while it looked as though Leicester could come through with the victory in the Premier League, nothing is ever guaranteed. Once the team defeated Manchester City in February of that year, it presented a great opportunity for bettors to engage in a back-to-lay scenario. If anyone chose to lay Leicester at an exchange when odds of 2/1 were being offered, a profit of £503 could have been secured. Odds of 2/1 are converted to a decimal of 3.0, resulting in a calculation of £1,510 ÷ 3.0 = £503. At that point, you could happily have sat back and watched the rest of the season take place, knowing that you had locked in a profit regardless of whether Leicester eventually came through with the win or not.
The key comes in looking for underdogs and outliers who are potentially given what look like impossible odds, and then they go on to overperform relative to the odds. It is this that provides a fantastic back-to-lay betting opportunity. Leicester City provided such an opportunity in the 2015/16 Premier League season, and other occasions have risen that have provided gamblers with ample opportunity, too.
Locating Front Runners in Horse Racing
If you’re new to back-to-lay betting, then horse racing events are the ideal place to begin. This is because so many races take place throughout the year, that you can build upon the strategy in this area a number of times per day. Securing even small profits from practicing this strategy will be great, as they can build up over the day, week or month.
Despite there being a number of good resources available to use online to find front runners in horse racing events, many of them require a payment to utilise in full. That being said, one or two do exist as free-to-use services, with the daily shortlist providing insightful information on the daily horse races. Front runners will often be identified by their previous behaviour in racing events. If certain horses like to lead in their races, and they are not matched by any other potential front-runners, this can provide you with ample opportunity for betting.
Usually, the horses that lead at the start of a race will shorten-up in the live betting stakes market. Therefore, you can factor that information in to your strategy before a race begins. If you know that a specific horse is likely to lead in a race, then you have an angle to place a back bet prior to the race starting, before laying that bet once it starts at shorter odds.
Of course, horse racing markets move exceptionally quickly once a race begins. You need to have a plan for how it will all work out. You should probably have entry and exit points lined up in front of you, and keep in mind that not every trade is going to go the way you expect it to, either. If the market goes against you, then you need to get out so that your profits aren’t all utilised in a single unlucky outcome. That all makes up part of a responsible gambling strategy, as well as a successful back-to-lay strategy plan.
The major risk with engaging in this type of gambling on in-play racing events is that your price isn’t accepted in time and your back horse bet loses. Because races are often so swift and so much activity is taking place at sportsbooks during that timeframe, you need to know precisely when you will lay the horse and not miss a single beat when engaging in such.
Ideal Bet-to-Lay Outcomes Prior to an Event
Sports are unpredictable, and there are various things that can happen in an event, which you can bet-to-lay on before they happen. For example, you may want to wager on any of the following things:
- Football Injury – Bettors, and sportsbooks alike, look out for news of sportsmen being injured. It’s always going to be big news because it immediately has a knock-on effect for the future of the player and the team. If you know of this news before your chosen sportsbook does, then you can take advantage. Of course, this can be used while a game is in-play too, but it will be less effective considering that everyone is watching the game unfold alongside you.
- Inside Team News – While not specifically being inside information, it will feel like it is when you get hold of it. Some people travel to football grounds prior to a game taking place, just to see if they can spot who from the team is warming up. The same is true of cricket or rugby, for example. If you know which players are likely to be on the pitch, you’re at an immediate advantage.
- Taking Notice of Golf Form – If you’re an avid golf bettor, then you may have taken notice of the fact that in-form players are always listed towards the head of the market when the PGA Tour is running. Yet golfers tend to have both good and bad runs of form, which can dramatically affect their prices on a weekly basis. It is ideal to keep an eye on the tournament market for the following week, as this gives you an insight into things.
- Tennis Injuries – If you thought that a high-profile football injury was bad, then an injury in tennis may knock you for six. They’re more impactful, on the whole, because tennis is a one-on-one game, and there isn’t a selection of substitutes lined up to take over. It’s a lot harder to discover news about injured tennis players than it is about football players, but it’s good to keep an eye out for such.
Have an Action Plan for an “Unfortunate Outcome”
Before you proceed with opening a bet-to-lay wager, you need to have a bit of a checklist relating to some potential outcomes. Should you select a Front Runner horse to work with, then you will need to consider the following actions in different circumstances:
- A specific exit point should the trade go well.
- A specific exit point if the horse doesn’t start out as one of the front runners in the race.
- A back-up plan for if the market does not move on the horse while he is at the front.
- The correct stakes ready.
- The amount you are willing to risk before the race begins – this is not something you should alter just because of certain circumstances occurring.
Back-to-lay betting may seem like something that is simple to engage in on the exterior, but it is important to consider at least all these points beforehand. It’s more than simply selecting a horse or a team or a player and then rolling with it. You get back from a bet what you put into it – metaphorically speaking. You need to ensure that you do the proper research, as with any kind of sports bet. Always watch out for those events that will move markets in other sports. Once you get into a routine of back-to-lay betting, you’ll realise that there are plenty of opportunities for such available to enjoy.
Why Doesn't Everyone Do It?
If you can lock in a profit using odds discrepancies then it begs the question why doesn't everyone do it? Part of the reason is it doesn't work every time so you need to be very disciplined in when and how you bet, being prepared to cut your loses when odds don't move in your favour rather than let bets ride. This in itself can make betting very transactional.
Most people bet because they want to enhance their enjoyment of an event by risking money on a given outcome. When using back-to-lay strategies you are in effect trying to lock in a profit that pays you the the same amount win or lose. This by its very nature means it doesn't matter what the outcome is and therefore there is no incentive for a particular result to come in. This goes against the point for why many people bet in the first place.
If you main concern from gambling is making money then a back-to-lay strategy, implemented correctly over time, can be a good option but for typical bettors it strips the enjoyment out of the process. It isn't something you can just sit down and do either, you need to take time to assess odds and work out the true probability vs implied probability to find an edge. This takes time, research and experience. It takes a while to get good at back-to-lay betting and it is likely you would lose more than you won for a period of time at least.