Backing and laying is the foundation of all matched betting. Regardless of which offer you are extracting, you will need to perform dozens of these bets. When most people have told me they’ve made a mistake matched betting, it’s usually a button-press error after they’ve inserted the wrong stakes as their back and lay bets. For this reason, anyone new to matched betting who isn’t familiar with sports betting should be sure about their understanding of backing and laying.
As previously explained, backing and laying are the inverse of each other.
As a lay better, you’re laying your money for someone else to take as a back bet. Betfair exchange is just that, an exchange where bets are traded en mass like the above example demonstrates. It can be a little confusing when you first look at it. On Betfair, the two sides of the market are colour coded blue for BACK bets and red for LAY bets.
Here’s another example:
The odds for Federer to beat Nadal is 2/1, if you BACK Federer to win with a £10 stake then you stand to gain £20 profit or lose your £10 stake, your liability. If you LAY against Federer with a £10 stake then you stand to lose £20, your liability, and gain £10 profit, your stake.
This is where most people who aren’t familiar with gambling get confused with LAY betting.
When you LAY a bet for something to lose above evens then your liability (the amount you stand to lose) will always be higher than your stake. This is because there is a greater likelihood of your selection losing (and thus you profiting) than winning, and so your liability must be greater than your stake.
– Think of it this way; odds of evens, or 2.0 decimal is 1:1, or a 50/50 chance. If the odds are at evens, then a £10 LAY bet will mean your liability is £10. In this scenario, it’s £10:£10. The figures are always even, and your winnings will always match your stake when placing either a BACK or a LAY bet.
If you’re backing and the odds are greater than evens, meaning your selection is riskier, say at 3/1, then your stake is represented by the right-hand number and your winnings by the left. 3/1 means by risking a liability £10 you stand to gain £30. You can visualise this ratio as £30/£10.
Laying a bet means the reverse. 3/1 is still a ratio of £30/£10, but instead of your liability being represented by the right-hand number, it is now represented by the left. You, therefore, risk a liability of £30 to win £10. The reason you risk more than you stand to win is because your selection is more likely to lose (and thus you profiting) than it is to win. Laying is like being the bookie, they have to have that £30 in their pocket to pay you out if you win your back bet.
If you combine a BACK and a LAY, then they simply cancel out and you will lose nor win anything regardless of the result. This match enables us to profit from free bets and other offers.
Matched Betting in Action
The simplest matched bet is when you’re given a free bet without any need to ‘qualify’ other than by depositing. For example, ‘£20 free bet when you deposit £10.’ Using a BACK and a LAY bet, we can bet on both outcomes of an event using our free bet, and regardless of the result, you will win on either one or the other outcome.
William Hill is offering 2/1 for Murray to beat Nadal. You place a BACK bet on Murray of £20, using your free bet at William Hill. In this case, you are just risking your free bet, and your deposit of your real money is left untouched.
You then go onto Betfair Exchange, and LAY a bet against Murray. For this, your liability is £40. Remember the odds of 2/1 mean your liability is the left-hand figure times by your stake and your winnings are the right-hand number times by your stake. In this case, it is £40/£20, meaning you must risk £40 on Murray winning to gain £20 if he loses.
The outcomes for this would, therefore, be a win of £40 in William Hill, and a loss of £40 in Betfair if Murray beats Nadal.
– This would leave your balance in William hill at £50 (including your original £10 deposit) and your Betfair balance at £0.
If Nadal beats Murray however, then you lose your £20 stake in William Hill but win £20 in Betfair on your LAY bet.
– This would leave your William Hill balance at £10 (just your original deposit) and your Betfair balance at £20.
Whichever way you look at it, you only deposited £10 and you now have £30 including your deposit!
If you profit in Betfair then it’s job done, William Hill thinks that you’ve just lost your money and you can withdraw your deposit from them and never log-in again (unless you come back for reload offers!). In Betfair, you ‘converted’ that £20 free bet into real withdrawable money and you’re £20 better off.
Unfortunately, the bookies don’t make it quite that easy to profit from free bets, and if you did win in William Hill then they wouldn’t allow you to withdraw the money straight away as profit, instead, requiring you to wager a certain amount of it (basically banking on you losing the money). This is to prevent lucky wins from free bets being withdrawn instantly as well as preventing matched betters from withdrawing profits instantly, remember, they want you to keep betting.
This is called a ‘wagering requirement’. The most infamous bookie for subjecting matched betters to wagering requirements is often Bet365 which require you to wager your free bets six times in order to withdraw them!
It sounds longer than it is though, as we can repeat the process, by covering each outcome using Betfair and the bookmaker in question until we either fulfill this criteria or win in Betfair.
Additionally, Betfair does charge commission on all winnings, and the odds to lay don’t always match the back odds that closely, meaning it’s never quite a perfect match up. For example, a back bet of 2/1 may have lay odds of 3.2 (or 2.2/1). This means your liability on Betfair will be slightly higher. Go back to the ratio example earlier in this section. 2.2/1 is a ratio of £22/£10 if you’re using £10 stakes, meaning your liability is £2 higher than you stand to gain from the corresponding back bet, which would be £20/£10.
Overall, these small percentage adjustments only tend to make up around 10 – 30% of your free bets value, so you can always expect to make 70% upwards on any offer.