Liability in Betting is the money you need to have in your account in a betting exchange to cover your lay bet. For example, if you have a lay of INR 100 with a liability of INR 500, you will need another INR 500 and more in your exchange account for placing the lay bet. Whenever you place the lay bet, the account balance automatically goes down by the liability amount.
Generally, you might go to a betting exchange for matched betting purposes. In matched betting, you back your bet in a traditional bookmaker using free bets and lay your bets in a betting exchange, so that overall, you do not lose any money. However, it is important to understand the liability in lay bets to develop a proper matched betting strategy.
What is a liability in betting?
Consider a case when a bookmaker is offering 2.0 odds on India to win in a match against Pakistan. If you decide to make an INR 100 bet on India to win, then you could calculate your total winnings based on the odds presented.
If India wins, then the bookmaker will give you INR 100 stake and INR 100 as winnings (a total of INR 200). You will be up by INR 100, and the bookmaker will be down by INR 100. If India doesn’t win, the bookmaker keeps your stake of INR 100. You will be down by INR 100, and the bookmaker will be up by INR 100. Based on the rules and regulations of this agreement, whenever you are placing the bet, the bookmaker stays liable to pay you INR 100 in case your bet wins.
Therefore, liability in lay bets is the amount of the winnings/profit that a bookmaker has to give to the bettor whenever their bet wins (since the bookmaker works by laying your bet). According to the liability calculator, if the bookmaker was offering betting odds of 3.0 in the place of 2.00, you will be winning INR 200 as profit as the bookmaker’s liability is INR 200. If the bookmaker is offering odds of 5.0, the bookmaker’s liability on a bet of INR 100 would be INR 400, and the punter will receive the same amount as winnings. Thus, the liability in betting is indeed simple to calculate.
How is betting liability calculated?
The liability calculation is pretty simple. All you have to do is know the bookmaker’s liability payout first. Then take the bet stake and multiply it with the betting odds. After that, subtract the bet stake from the result, and you would get the liability.
- For example, if you are betting INR 100 and with the betting odds of 2.00, the result is INR 200. Then take INR 100 from it, and the liability would be INR 100.
- For example, if you are betting INR 100 and with the betting odds of 3.00, the result is INR 300. Then take INR 100 from it, and the liability would be INR 200.
- For example, if you are betting INR 100 and with the betting odds of 5.00, the result is INR 500. Then take INR 500 from it, and the liability would be INR 400.
You can also calculate the liability simply by this formula:
Liability = {Backers stake * (Lay odds – 1)}
So, if the odds is 2 and if you stake 10, then the liability is:
Liability = {(10 * (2-1)} = 10
Now that you know the definition of the liability in the matched betting and you know how to calculate it, you can make wise betting decisions.
Now, let’s look at what liability in lay betting first is.
Whenever you place a lay bet using the betting exchange, you’re taking the place of a bookmaker. You are copying what the bookmaker does in a traditional bet with a normal backer. So in the above example, you can take the place of the bookmaker to get the liability or the winnings on any payout. If the bettor at the exchange wins, you will lose your stake. A lay bet stake is an amount that you are agreeing to bet on against a backer (a bettor who backs a result). The moment you agree to this amount, you also agree to pay out the winnings to the backer if you lose the bet. Lay bet is relatively riskier than the back bet, and therefore liability comes into the picture.
The amount that you need to pay to the backer at the exchange when they win the bet is called the liability in lay bets. The exchange usually takes the liability from your account balance when you are placing the lay bet. This is why your balance goes down in the form of a frozen amount whenever you place a lay bet. You can’t place a lay bet without a balance to cover the full liability of the bet. However, the exchange only takes the lay stake and liability amount from your account balance as a deposit. You don’t have to pay the stake to the backer as it is safe with the bookmaker.
What’s liability in matched betting?
Suppose, you have INR 1000 in your account, and you have placed INR 100 with a liability of INR 500. The balance present in your account will get dropped by INR 500. The remaining INR 500 will remain intact. Once the lay bet is placed against the back bet, especially in a matched betting, your liability is locked away. It remains locked until the game ends and the result is announced. The liability which is locked away is often referred to as ‘exposure’ at the betting exchange.
So, what is the lay bet payout when the final bet is settled and the outcome is declared?
- If the lay bet loses, you will also lose your liability payout on the exchange method but have the possibility of winning it with the bookmaker.
- If your lay bet wins, your locked amount will be returned to the account along with your lay stake amount, but a little commission will be taken away by the exchange.
As we are talking about matched betting, it doesn’t matter if our lay bet loses or wins as the opposite bet is done with a bookmaker which will return the money to our account. Hence, it’s called risk-free betting.
Conclusion
As a bettor engaged in matched betting, you should understand liability in matched betting. It is true that you will not bear the risks in matched betting. But a successful matched betting strategy should take the liability of matched betting into account as well. A long-term matched bettor should make active use of the liability calculator.
They should also understand how liability in matched betting works to make wiser matched betting decisions. However, you should be wary of how you use matched betting strategies. Many operators tend to keep a watch on the players. If they suspect a person uses matched betting, they can suspend your account.
