A betting exchange is a marketplace where the customers bet against each other, instead of betting against the bookmaker. Hence, they can request or offer odds to the other bettors. Generally, when it comes to any operator, a bettor is allowed to make a back bet. However, due to the structure of Back and Lay betting exchanges, you can make both back and lay bets.
The meanings of back and lay bets are simple to understand. By pitting the customers against one another, a betting exchange gives you the option to lay the bet on an outcome not likely to happen. In betting exchanges, on one side of the bet, there are backers who back an event to happen, and there are layers who lay bets on an event not happening. Both backers and layers in back and lay betting sites bet against each other by agreeing on specific odds of an outcome.
What exactly is Back Betting?
Back Betting is backing a team to win. Operators offer back betting only. It is the traditional style of betting where you bet on the possible outcome. An example of back bet is betting on your favourite cricket team to win the World Cup in the finals. If the team doesn’t win, you lose your entire stake. If the team does win, you will win the stake as per the given odds.
So, why do people engage in back betting:
- Back Betting offers you the better odds against other players from across the world. The price is a reflection of supply and demand in the market rather than someone managing the price like the traditional bookmakers.
- When you’re back betting, you can either take the current offer or choose the odds based on your preference. Your price stake’s difference from the usual price range decides on whom you will be matched with.
- The BSP (Betfair Starting price) is generated at the start of the event and is usually based on all bets placed by the backers and layers in the market. There is no margin on the price, and therefore you will get the exact reflection of the market. By betting through BSP, you can find multiple matches for your Bet.
- Back betting should be done when you’re sure about the occurrence of the event by considering all the factors that affect the uncertainty of it.
What is Lay Betting?
Lay betting is a unique method of placing bets that are not followed by traditional operators. When you’re placing a lay bet, you are betting on a result that’s not going to happen. Lay Betting can be explained as betting on a cricket team not winning the match. For example, placing a bet on Australia not beating India in the Cricket World Cup is a lay bet. Essentially, you are placing a bet on an outcome not to happen.
The odds in the lay bet are the prices that backers want to bet on. Based on these prices, you will be matched. You can either take this offer or put your own odds for the backers to make bets on. Your odds will usually be matched later. Laying the bet using the BSP at the start of the event offers high profits where you have to pay a small commission.
The three components of lay bets are:
- Lay odds: The odds that you are considering to place against the back bets.
- Backer Stake: The amount you are letting the backer bet with you – in other words, the amount you can win.
- Liability: (Backer Stake* Lay odds) – Backer Stake = the amount you are risking.
People consider lay bets because it is easier to find who won’t win rather than finding who will win. Another advantage of lay bets is the trade out on the earlier bets that you have had. You can secure the profit irrespective of the result by the green book trading. Plus, placing lay bets is essential if you want to engage in the matched betting strategy.
What is Lay commission?
When you place a lay bet, and when you win this lay bet, you will be charged a small commission against it. This is called the lay commission. The commissions are charged on the net winnings, and the losing bets are not subjected to any charges. Betting commissions are the way in which betting exchanges make money. Sometimes, betting exchanges can give you rewards in which they will give a discount rate that reduces your net lay commission. This reward system can determine your discount rate based on the points you get from the Betting Exchange.
Back and Lay Betting Calculator
How to calculate a Back Bet?
The profit of a back bet can be easily calculated by multiplying the backer stake with the decimal odds. For example, if you are backing India to win against Australia for Rs. 10 with the odds as 2.5, the returns on the winning will be calculated as:
Stake * Decimal Odds = Returns
Returns – Stake = Profit
Rs. 10 * 2.5 = Rs. 25
Rs. 25 – Rs. 10 = Rs. 15.
This is the traditional way of betting. You place your bet against the bookmaker, and if your bet lands, you win the bookmaker loses money.
How to calculate a Lay Bet?
In the case of traditional bookmakers, you back a bet, while the bookmaker lays the bet against you. In a betting exchange, you can take the role of a bookmaker. When entering the stake in a lay bet, you are also managing the backer stake.
As a result, you stand to gain if your lay bet comes in rather than losing it if it doesn’t. The amount that you stand to lose is the liability, which is the amount the backer wins if their bet succeeds. So it is important to remember that if a person wins, the other person will lose as you are betting against real people. The best way of calculating a lay bet is to understand the reverse process of the bet. Think of it as a liability and the stake as the profit. Assume the same situation as above, and this is how you will calculate the liability of bet against India at odds of 3.0:
Backer Stake * (Odds – 1) = Liability
Rs. 10* (3-1)
Rs. 10* 2.0 = Rs. 20.
In this situation, the player has to risk Rs. 20 to win around Rs. 10. The betting exchange platforms provide all the needed information about the bet before placing the bet. It is important to realize that you are not just betting Rs. 10 but Rs. 20 in this case with higher risk.
Betting exchanges are a great way to sidetrack from the traditional betting and go into non-conventional betting. It is also through betting exchanges that you can match a back bet with a lay bet and thereby, engage in the matched betting strategy. With the help of cricket betting exchanges, certain strategies like matched betting methods can help you win huge profits. However, you have to be mindful of the situation and the odds before making either back bets or lay bets. The key is to minimize the risks and identify the loopholes before placing either bet.