The majority of bettors place bets on something to win. Obviously that make sense, it’s where betting began. But over the decades and centuries more complex bets came about that involved requiring multiple wins or combinations of wins.
Then the betting exchange was invented and the possibility of laying came about.
Now the most common bets are backing to win or laying to lose.
There is a common perception that it’s easier to make profits by laying. After all, most of the time you’re not going to select the winner. And that means…
…most of the time you’re going to be selecting the loser!
But it’s not that simple.
In fact, in my experience, it’s far easier to make a long-term profit by backing than by laying.
And in a minute I’m going to explain why.
But first I want to look at the three main perceptions as to why it’s easier to profit from laying.
- It’s easier to pick a loser
- The downswings are less
- You don’t have long losing runs
Now let me explain why I disagree with these points.
While it is easier to pick a loser, it’s a lot more complicated to understand how a lay bet works.
Everybody understand how a back bet works. You place £5 at odds of 3/1 and if your selection wins you make three times your stake, in this case £15, in profit and get your stake money back.
Lay betting is not so simple. If you lay £5 at odds of 3/1 and your horse loses then you take the stake money (minus the betting exchange commission).
Okay, that makes it sound pretty easy.
But it’s when you lose a lay bet that people start to get confused. That’s because when you place a lay bet you are, in effect, becoming a bookmaker. This means that you’re offering someone odds of 3/1 on their back bet.
And that means…
If their back bet wins (and your lay bet loses) then you need to pay them out at the odds you offered them.
You place a lay bet at 3/1 for £5 then you have offered a back bettor that they can place their back bet with you for £5 and if the horse wins you will pay them out three times their bet in profit and give them their stake back. This means that you’re going to lose three times £5 or £15 if the horse wins.
So when you place a lay bet of £5 at odds of 3/1 you are actually risking £15 to make £5.
I know that can get kinda confusing, so read it through a few times to get your head round it. If you’re still struggling then just leave me a comment and I’ll help you to understand 🙂
While it’s easier to pick a losing bet, a lot of punters jump into lay betting for this reason but don’t understand how much they’re risking and how much they’ll win. And if you don’t understand the bet your making completely then you’re not going to make a profit in the long term.
Number two and number three from above I’m going to tackle together. Your downswings are less and the losing runs are shorter.
Both of these are true.
But that’s what can lead punters astray.
Probably the biggest difficulty most bettors face is being able to cope with downswings and losing runs.
So if there’s anyway to minimise these then so much the better.
Lay bets seems the obvious choice. Just laying the favourite will mean you win about 57% of your bets, which is a hell of a lot better than winning 33% when you back them.
However don’t be misled. Because lay betting works on this principle:
Win often and small but when you lose you lose big.
And that’s the opposite to back betting which is:
Lose often and small but when you win you win big.
Which means it requires a different mindset.
If you simply laid horses at odds of 3/1 then you’re going win roughly 75% of those bets and, in theory, you would end up break even.
Over 100 bets you would win £5 seventy five times for £375 and you would lose £15 twenty five times for £375.
That means you need three winning bets to make up every single losing bet.
But unfortunately it’s not that simple because the betting exchange charge commissions of 5%.
So when you win a bet you’re not actually getting £5, you’re getting £4.75. And that means you are only making £356 from your winning bets.
Effectively that means you’re starting from a 5% negative position.
With back bets you don’t have to bet on the betting exchanges, which means you don’t get a commission on your winning bets.
Let’s say you have a 5% edge, which is pretty good, and are actually winning 79 bets and losing 21 bets. Now you’re winning £375 every hundred bets, and losing £315.
Not bad… a £60 profit every single bet.
So that means you’ve placed 100 bets at £5, so you’re making a 12% return on investment right?
Don’t forget you’re actually risking £15 to win that £4.75. So you’ve actually placed £1500 in bets which means you ROI is just 4%.
A big difference.
What you will find is that although you don’t need to be able to cope with losing runs, you do need to be able to cope with most of your profit being wiped out every time you have a losing bet.
And this can be just as difficult to deal with as long downswings and losing runs.
Finally, and most importantly, the reason that it’s harder to make a profit laying is that betting exchanges are geared towards back bettors.
You can see this very quickly by looking at Betfair’s claim that their odds are 20% higher than bookmakers.
Bookmakers build in their edge, usually about 20%, and this is what allows them to make regular profits.
Betfair remove this edge as they take a commission from whoever wins, but that means by definition it’s harder for lay bettors to profit. Not only has the 20% edge that bookmakers build in gone, but they’re also charging a 5% commission on your winnings.
These are the reasons I always recommend punters start by placing back to win bets. They’re easier to understand and easier to make profits from.
Let me know which type of betting you prefer by leaving a comment below.