Laying:
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A lot of new customers to Betfair are attracted by the prospect of a new style of bet; namely, “Laying”, which is being allowed to back the loser of your chosen sport or event.
In relation to horse racing, this is known as “Laying” a horse i.e. Backing it to lose the race.
Laying a horse to lose is effectively the direct opposite of backing it to win.
It has actually always been possible to do this via a traditional bookmakers by backing every horse in the race to win using a “Dutching” mechanism, except of course the horse that you want to lose.
The result being, that whichever horse wins the race, as long as it is not the one you chose as the one you want to lose, you will make a set amount of profit.
To do this in a real life situation in a bookmakers as the horses are at the post, you have to be a mathematical savant or some other form of genius, and you may also get a rather strange look from the staff at Ladbrokes.
The Betfair computers take all the aggro out of “Laying” your selection. They do all the math and present you with a single decimal odd for laying your selection.
Laying horses can be attractive and profitable to seasoned professionals who attend race meets and can visibly see a horse directly before a race.
Satellite Information Services are available for those with an enormous budget, but even so, they may not focus directly on the horse you are interested in so may not give you any real clues pre race.
Let me explain the problem with “Laying” using an analogy.
You have a favourite at 3/1 in your Maiden Handicap at Chepstow, the field is large, 12 riders and there are 3 or 4 strong contenders in this race all bunched at around 4’s and 5’s
This is a terrible race to try and lay select and I will explain why.
The professional lay punter will go to the paddock 15 minutes before the race just as the horses are going down and will see that the favourite in this race is in fact very nervy, the eyes are jumping, the sweat has turned into white foam, the head is down and he refuses to canter or gallop.
Meanwhile the other 3 contenders are lightly sweating with a glossy shiny coat and bright steady eyes. They are cantering and galloping around with their heads and ears pricked up.
A professional punter now has about 2 minutes to phone Betfair or use his wireless laptop and get a large lay on the “out-of-sorts” favourite before the hobby punters, the on course bookies and TV cameras catch on, and the price on this horse starts drifting, first with the on course bookies, then Betfair and then the internet bookies.
This is what you are up against trying to outwit the professionals, the bookies, the market and Betfair. It can be done, but please heed my words of caution.
Without seeing the runners and riders before this race, it would be impossible to say with any certainty which of the major contenders is going to win and which will lose, and the main problem with laying is the enormous cost of paying for the rest of the field should your lay selection go on to win.
Always remember the comparison with Dutching in that you are betting on every other horse in the race to win with wagers that return an equal amount whichever horse wins.
In other words, should the horse you left out of the Dutch win you have to pay for every other horse in the race.
Also and this is a very serious point that many punters laying on Betfair are totally missing.
Betfair vaunts much of its success on its ability to provide punters with better odds than they will get to “Back” events with traditional bookmakers, and this they invariably achieve.
But as I have discussed in article 3, due to the higher back prices and the market “Spread” the lay prices are in fact far worse than what you would get if a traditional bookies offered the option to lay horses.
To back this up lets examine the fiscals:
Let’s say, the favourite in our maiden at Chepstow is at 3/1 on course. Betfair uses decimal odds to facilitate the Stock Market style trading and hedging that helps make it so popular. To get the decimal odds add 1 and then 0.5 (for the favourite).
The odds are better on Betfair as the bookies cannot factor their “cut” or “over round” into the odds. The prices do reflect the Bookmakers prices, but are more lenient as we are betting against other punters, not the bookies.
Betfair just takes a 5% commission from winnings and this percentage actually diminishes the more bets you place.
So the favourite will be at around 4.5 to back on Betfair in this example.
However to “Lay” the horse there is what is known as a “spread” in Stock Market terminology.
The difference between buying and selling a share equates to the difference between backing and laying a horse as detailed in Part 3 of this series.
It is always more expensive to lay a horse than to back it, this has to be otherwise the book would not add up. So the lay price of a favourite at traditional 3/1 will be around 4.7 decimal.
If you lay this horse to lose for £1 at 4.7 and it does lose, you stand to make £1 minus Betfair commission of 5% so you get your £1 stake back and a profit of 95p. All very good.
However, if perchance the contenders do not perform, your horse suddenly wakes up and goes on to win, then you have to pay for every other horse in the race that lost. So your loss would be your £1 stake * 4.7 = £4.70
So let us examine this data from another perspective; it can be said that you are going to need 5 of the above type of lays to make enough profit to pay for 1 race where the horse you laid goes on to win i.e. a losing bet.
And, this example is laying the favourite at the lowest odds of all the horses in the race.
Just to hammer the nails into the coffin of your “Lay” strategy, look at the “Fate of the favourites” as detailed by Adrian Masseys’ excellent free resource which records and analyzes the results of UK horse racing over the last 15 years. http://www.AdrianMassey.com.
It can be seen that across all flat races 33% of favourites go on to win their races with the figure for flat handicaps at 25% Favourites win their races in 38% of National Hunt races with the figure for Handicap hurdles at 30%.
Averaging these figures we could say that approximately 1 in 3 races are won by favourites. Yet we would need to lay 5 favourites to lose at 3/1 to make a profit.
Are you that good at spotting weak favourites??
This is the reality of laying horses on the betting exchanges.
You are ticking along nicely……bam! Just one predicted loser wins and you are back to square one.
And I can tell you it is more than just deeply irritating.
This is one area of using Betfair that is usually passed over in the “Pot of Gold” manuals.
The amount of mental energy and anxiety that you can expend on the Betting Exchanges is astonishing and really is something that should be factored in by anyone thinking about using Betfair to make serious money.
Picking horses to win or lose is mentally draining.
The research, the study, the angst, the mental debate and arithmetic required to pick a horse to win or lose with any degree of certainty, and follow it through the stalls round the course and through to the finish will leave many punters thoroughly drained after a few races, and then to see it all thrown away on the last race of the day can be utterly soul destroying.
Obviously the same scenario with a final race victory will be thoroughly satisfying. But in either scenario DO NOT underestimate the amount of mental work, anxiety and stress involved in making a living from Betfair.
In Part 5 I will talk more about “Laying, Backing and Dutching” horses and will reveal some more excellent resources which will help you on your way to Betting Exchange success.
Mike J Davies is a Computer Analyst, LSE Day trader, and a Betfair Trader and Advisor. More advice and articles are available at Mike’s websites: www.ELottaLotto.com and at betfair-trade.blogspot.com.
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