I know I have been using the terms Backing and Laying here. I need to explain this in this post.
So what is a Back Bet?
To Back an event or outcome is to say that Yes that outcome is going to occur or happen. Example in a Football match between two teams namely Team A and Team B, there can be a Win, A Loss or a Draw. If I back Draw that means I am betting that the match will end in a draw. If the match indeed ends in a draw then I have won my Bet. If otherwise I will loose my Bet. Prior to the advent of the Betting exchanges this was the only way to bet with the Bookmakers or Bookies like we call them. There was no other option available.
See pic below:
As can be seen, the Blue column represents the Back portion. If for example I want to back Juventus with $20 at the current odd or price of 1.68, I will simple click on the top blue column and enter the Back bet amount of $20. Below is what it will look like after I submit my Bet and it is accepted.
As you can see, if I place a Back Bet on Juventus to win, if they win, I will get $13.60 plus the amount used to Bet which is $20 making a total of $33.60. So why is the appearing as $13.60 above? It is stated there like that because the $13.60 is actually the amount I will be gaining. The $20 is originally my money that was returned to me, so it is not considered an income or a profit.
Now still look at that picture. If AC Milan wins, I will loose my $20. Also if it ends in a draw I also loose. The picture depicts it all. I just want you to understand it. You will be seeing this all the time on the Betting exchange. Profits or Wins are in Green while the Red amounts are for losses.
What is a Lay Bet?
This is the opposite of a Back bet. When I Lay an outcome I am simply saying that the outcome will not happen. This has been made possible by the advent of the Betting Exchanges.
This is the position that a Bookmaker takes when you place a Back Bet with him. So when you LAY at the Betting Exchange you are indeed taking on the role of a Bookmaker.
You can now be a Bookmaker without all the heavy overheads, thanks to the Internet.
See picture below:
In the above situation, if I want to say that Juventus is not going to win this match, I will simply click on the pink button on top right side and place my bet. Let us see the picture below to understand what will happen.
But should it end in a win for Ac Milan or a Draw, I would win the amount in Green.
Let me just point out something to you.
If you place a Back bet on a betting exchange, the computer will immediately search in its database for someone who has placed a Lay bet at almost same odds as you but with a small difference as you can see from above picture. The computer will match both of you and this happens remotely. You don’t know who the other party is. He could be in another part of the world.
Where there is no match the computer will hold your bet and wait for someone to come along who will match your bet completely or a portion of it.
When anyone places a Bet at the exchange, the amount is withdrawn immediately from your account and held by the Exchange until after the event which determines whether you get back your money in your account or it goes to the other party.