Are you a backer or a layer?
It used to be the case until relatively recently that you could only back a bet to win.
But with the advent of betting exchanges came the opportunity for punters to lay other peoples bets, just like the bookmakers have been doing for hundreds of years.
A lot of people got very excited about this at the time. After all, it’s got to be a lot easier to pick a loser than a winner.
They also thought to themselves if bookmakers make their profits laying off bets then I should be able to make a profit laying bets as well.
If only it were that easy!
That type of wishful thinking doesn’t quite jive with reality for a couple of reasons.
Reason #1 – Betting exchanges take a commission on all winning bets (usually ~5%) and because lay bets are more likely to win than back bets (unless you’re laying favourites) you are going to be giving up 5% of your profits on all of those winning bets.
Reason #2 – You will rarely find the opportunity to lay at bet at the odds the bookmakers are laying bets at. If you want to lay a bet on a betting exchange, you will likely have to lay at odds a little bit higher than the odds being offered by bookmakers and therefore have to pay out more than the bookmakers if that selection wins.
Reason #1 eats into the profits you do make when you win money and reason #2 has you losing more money when your lay bet loses.
When you consider those two factors, it’s not hard to see that making a profit by laying bets isn’t such a walk in the park.
Whilst it’s not impossible to make a profit from lay betting, it is quite difficult as the lay bets you are placing will need to have a greater than 5% edge to yourself to account for the exchange commission… and that’s just to break even.
Another downside to lay betting is the amount of money you end up having to put at risk.
If just one or two of the selections you’ve layed go on to win, you can end up making quite a size-able loss on the outcome of just two bets.
It’s for these reason that I generally prefer to place back bets.
There is value in both sides of the market though. You’ve just got to find it!
I’d be interested to hear your take on this. Are you a backer or a layer? Send me an email letting me know.
Until next time,
P.S. You can view all the latest results of the tipsters I recommend here: http://winnersodds.com/tipster-portfolio