Understanding what is liability in betting is crucial when laying and backing at betting exchanges. However, liability is often used specifically for lay betting, standing as the total amount you stand to lose if your lay bet is unsuccessful.
In this guide, we provide everything you need to know about the subject of betting liability.
When you place a bet on traditional betting sites, your liability is essentially your stake amount. If you lose your bet, you forfeit the amount placed on an event. Betting exchange liability is more complicated, as users can back (bet for) and lay (bet against) the outcome of an event.
Backing wagers on peer betting platforms like Betfair is similar to betting on traditional online betting sites – your liability is limited to your stake. This means this is the maximum you stand to lose if the outcome does not match your bet. Here are some examples.
One of the advantages of betting with a bookie is that liability is easy to both understand and track. Your bet stake, which is deducted from your balance up front, is all you stand to lose in the worst-case scenario.
Things can get a little trickier when it comes to lay betting on exchanges.
A lay wager is backing something not to happen with other bettors on gambling platforms. Unlike betting for Liverpool to beat Chelsea at traditional bookies, lay betting markets on betting exchanges allow you to place money on them not winning. Lay bets win if Liverpool lose or draw – your liability is the total payout made if the backer’s bet is successful.
A layer’s liability can differ depending on the risk involved; it is generally relative to the betting odds and bets taken. But layers can win the total stake of back bets when successful. Either way, knowing how to accurately calculate lay betting can help with some of the following.
Most betting exchanges only allow you to risk up to your account balance to ensure fairness and security. When you lay, you take on a similar role to that of a bookmaker, whereby it’s your responsibility to pay out when you lose a wager. This is because you are essentially offering odds to punters when laying at exchanges.
Betting exchange liability is the total amount of losses lay bettor must pay out to backers if they lose. Although a betting calculator does the heavy lifting on the majority of betting exchanges, here is an easy formula one can employ to work this out.
A good tip for better understanding the calculations in lay betting is to find markets displaying odds on platforms like Sporting Index and Betfair. While the computer does the magic for you, try to work out your liabilities first. You can do this by using the formula above and then entering your stake to see if the numbers tally up.
Here are a couple of examples of liability in lay betting, to get you started.
Champions League – FC Copenhagen (18.0) vs Man City (1.25)
UFC – Geoff Neal (3.2) vs Ian Garry (1.5)
Commission can be factored into your liability. Betfair and other betting exchanges charge a commission on net profits on a market, so a net loss will not incur commission charges. It is best if you establish any costs and charges before you place your bets.
You’re unlikely to get caught up in complicated betting equations with back bets. Lay bets can be more complicated, however, which makes a lay bet calculator a good tool to employ. These are available at betting exchanges and other sites.
Bookmakers accept bets from customers at set odds and must pay out for every punter’s successful wager. Their total exposure (liabilities) is the amount of potential winning bets, which heavily lean toward the more favourable outcome. One of the main ways a bookmaker manages liability is by reducing odds on favourites and increasing them elsewhere.
Bookies can maximise profits by minimising their liabilities. In other words, the total liabilities for a betting site must be adequately balanced to manage the risk of major losses. If they have accepted a significant volume of bets on one team, they stand to face big payouts.
While it isn’t of critical importance when learning topics related to what’s a liability in betting, it can help. Here are some of the ways betting sites and bookies mitigate their exposure.
Bookies tend to be a step or two ahead of the average punter. As such, it may be beneficial to consider their methods and ways of managing their exposure. Especially if you plan to find the best ways of dealing with exchange betting liability of your own.
If you are enjoying our guide to betting liability, you may find some of our other gambling literature helpful.
Liability in matched betting is the potential losses you can incur from matched betting. The practice involves looking to profit from new customer free bets and promotions provided by bookies and betting sites.
In matched betting, the goal is to find profitable betting offers conducive to guaranteeing a profit – this is regardless of the result. This is possible if you lay bets against the original bet at other sites or betting exchanges. The liability, therefore, is with the money placed on lay bets if the backed bet is successful.
Here’s an example from a Premier League match between Tottenham and Wolves. Remember, the formula to work out liability in lay betting is (stake x odds – stake = liability).
If Spurs win, the £10 back bet nets you £20 – this results in a net loss of £0 when the lay bet is taken into account. If Wolves win or the match ends in a draw, your lay bet pays out at £30 plus your £10 stake which leaves you with a total balance of £30 – this is because the £10 bet on Spurs lost.
Both individual and shared liability matched betting are not illegal at sites licenced and regulated by the United Kingdom Gambling Commission and other reputable authorities. But you should exercise caution and check if the bookies you are betting on have rules or restrictions on such activities. With that covered, we are confident that’s matched betting liability explained for now.
Managing risk by reducing liability is among the most crucial betting principles to learn. Especially when trying to avail yourself of the many advantages of lay betting. Here are five tips that can help you reduce your liability in betting.
A good comprehension of betting liability is essential to anyone using betting exchanges. Especially when laying bets. Although the principle of liability is fairly easy to understand, the trickier aspects of the subject can lead to confusion. With more practice and understanding, you will be able to handle your betting liabilities more professionally.