Lay betting is betting that a selection will not win. On a betting exchange you take the other side of another punter's back bet: you keep their stake if the selection loses and pay their winnings if it wins. That payout is your liability, worked out as lay stake x (lay odds - 1): laying $50 at $4.00 puts $150 at risk to win $50 before commission (illustrative prices).
Every lay, trade and hedge below is placed before the jump or before the game starts. In Australia you lay with an exchange that holds a licence under a state or territory law, and online bets on a sporting event have to be placed before it begins.
How lay betting works: one market from both sides
On an exchange, backers bet that a selection wins and layers bet that it does not. The exchange matches them at an agreed price and takes commission instead of setting prices, as the betting exchange guide explains.
Example: illustrative prices for an imagined six-runner race, not a real market or a current price.
| Runner | Best exchange back | Best exchange lay | Bookmaker A |
|---|---|---|---|
| Runner 1 | $2.90 | $2.94 | $2.60 |
| Runner 2 | $3.95 | $4.00 | $3.70 |
| Runner 3 | $6.20 | $6.40 | $5.50 |
| Runner 4 | $8.20 | $8.40 | $7.00 |
| Runner 5 | $12.50 | $13.00 | $11.00 |
| Runner 6 | $24.00 | $25.00 | $19.00 |
| Book (sum of 1 / price) | 100.3% | 98.2% | 112.3% |
The back column is layers' money waiting to be taken, and the lay column is backers' money. The exchange's two books sit either side of 100%, while Bookmaker A's 112.3% carries its margin. Runner 2's two prices are one tick apart, the narrowest back lay spread the price ladder allows.
You lay Runner 2 for $50 at $4.00. A backer who asked $4.00 is matched with you, and the exchange reserves your lay liability from your balance until the market settles:
liability = lay stake x (lay odds - 1) = $50 x (4.00 - 1) = $150
| Result | The backer ($50 back at $4.00) | You ($50 lay at $4.00) |
|---|---|---|
| Runner 2 wins | Wins $150, or $142.50 after an illustrative 5% commission | Pay $150 |
| Runner 2 loses | Loses $50 | Win $50, or $47.50 after 5% commission |
| Most at risk | $50 | $150 |
What the backer can win is exactly what you can lose. After commission the lay wins $47.50 for every $150 it risks, so it pays its way only if Runner 2's fair price is above 1 + 150 / 47.50 = $4.16, a chance below 47.50 / 197.50 = 24.1%. Lay betting strategies builds a method on that test, how to lay a bet takes the same lay through the exchange's bet slip, and the lay bet calculator works liability in both directions.
Sport works the same way. With illustrative prices, in a two-way head to head market where a draw is not possible, laying the home side for $40 at $1.70 risks 40 x 0.70 = $28 to win $40. You hold what a $28 back of the away side at 1 + 1 / 0.70 = about $2.43 would give you before commission, so check the away side's back price first.
Laying vs backing the rest of the field
Without an exchange, the nearest thing to a lay is backing every other runner, and each of those prices carries the bookmaker's margin. At Bookmaker A, the other five runners add up to 1/2.60 + 1/5.50 + 1/7.00 + 1/11.00 + 1/19.00 = 0.8528 of the book, which makes "anything but Runner 2" a price of about $1.17 (1 / 0.8528 = 1.1726).
Winning the lay's $47.50 at that price means staking about 47.50 / 0.1726 = $275 across five runners, against the $150 the lay risks. The lay works like backing the field at 1 + 47.50 / 150 = $1.32. Exchange prices as fair odds asks whether the exchange is also the fairer reference for one runner.
Risk: Betting involves risk. At $4.00 the liability is three times the lay stake, so one runner that wins wipes out the takings of about 3.2 winning lays (150 / 47.50), and there is no guarantee of profit. See responsible gambling for limits and support.
Commission on net market winnings
An exchange earns from commission, charged on your net winnings in each market rather than on each bet. The exchange sets the rate in its own terms, along with any extra charges on some winning customers, and can change both; rates can also differ between markets. Read yours in your account and treat it as an input: every example here uses an illustrative 5%.
Net means the exchange adds up everything you hold in one market, result by result, and charges only on what you finish with. A market you finish behind in pays no commission.
Example: illustrative prices from the race above. You hold the $50 lay of Runner 2 at $4.00, and you also back Runner 5 for $10 at $12.50.
| Result | Lay of Runner 2 | Back of Runner 5 | Net in the market | After 5% commission |
|---|---|---|---|---|
| Runner 2 wins | -$150 | -$10 | -$160 | -$160.00, no commission |
| Runner 5 wins | +$50 | +$115 | +$165 | +$156.75 |
| Runner 1, 3, 4 or 6 wins | +$50 | -$10 | +$40 | +$38.00 |
Charged bet by bet, the last row would pay 5% of the lay's $50 and leave $37.50; charged on the net, it pays 5% of the $40 you made. Your worst row, -$160, is your exposure in the market, the amount the exchange holds back from your balance.
For a single bet in a market, two lines cover the sums that follow:
- back winnings after commission = stake x (odds - 1) x (1 - rate)
- lay winnings after commission = lay stake x (1 - rate)
Exchange commission explained shows how a rate works across a whole market and what it does to the price you need.
BSP lays: a liability limit instead of a stake
The Betfair Starting Price (BSP) is a single price the exchange works out for a runner when the market reaches the jump, in markets where it is offered. In plain terms, it puts the starting price bets on each side together with the unmatched exchange bets on that runner, then finds the price at which the most money from backers and layers can be matched. Everyone matched at BSP gets that price, and nobody knows it until the jump.
Because the price is unknown when you bet, a BSP lay is entered as a liability, the most you will lose, and the size of the stake depends on where BSP lands.
Example: illustrative prices. You lay Runner 5 at BSP with a $120 liability limit and an illustrative 5% commission.
| BSP at the jump | Lay stake the $120 allows | Kept if Runner 5 loses |
|---|---|---|
| $11.00 | 120 / 10 = $12.00 | 12.00 x 0.95 = $11.40 |
| $13.00 | 120 / 12 = $10.00 | 10.00 x 0.95 = $9.50 |
| $16.00 | 120 / 15 = $8.00 | 8.00 x 0.95 = $7.60 |
The most you can lose stays at $120 while what you can win moves with the price: the longer BSP lands, the less the lay wins. Add a price limit and the lay is matched only if BSP lands at or below it, so a $14.00 limit leaves the $16.00 row unmatched. A back bet at BSP with a limit works the other way round.
Your exchange's terms set how SP bets are sized and matched. Betfair starting price explains the calculation and the projections shown before the jump, and BSP vs tote compares two prices you learn only once betting has closed.
Unmatched lays, scratchings and reduction factors
Only the part of a lay that a backer has taken is a bet. With illustrative amounts, ask to lay Runner 1 for $60 at $2.94 when backers have $35 waiting there, and you hold a $35 lay with 35 x 1.94 = $67.90 of liability, while the other $25 waits as an offer.
Each unmatched offer carries a setting for the jump, such as cancelling it or turning it into a BSP bet with take SP; your exchange's terms list every setting and the default. If the lay was there to offset another bet, a cancelled part leaves that bet partly uncovered, as unmatched bets works through.
Scratchings change matched bets too. Bets on a scratched runner are void. An exchange's racing rules can also give each runner a reduction factor, an estimate of its chance of winning. When a runner is withdrawn after bets are matched, matched prices on the others are cut by its factor, above a threshold the rules set, and unmatched bets in the market may be cancelled.
Example: illustrative figures. Suppose that instead you had laid Runner 3 for $25 at $6.40, a liability of 25 x 5.40 = $135. Runner 2 is then scratched with a reduction factor of 25%. If your exchange cuts the whole matched price by the factor, your lay stands at 6.40 x (1 - 0.25) = $4.80, and the liability falls to 25 x 3.80 = $95.
You still keep the $25 if Runner 3 loses, while the backer's win shrinks with your liability. Each exchange's own rules say how factors are set and applied, place markets included.
Trading and hedging: locking a result before the start
Trading is backing and laying the same selection at different prices before the jump or the start. Once both bets are matched in full, the gap between your two prices sets the result whatever happens. Hedging is the same move made to protect a bet you already hold. After a back, the closing bet is a lay, and the stake that leaves the same result either way is:
lay stake = back stake x back odds / lay odds
Example: illustrative prices. Hours before the race you backed Runner 4 on the exchange for $24 at $10.50. It has firmed to $8.20 to back and $8.40 to lay, so you lay 24 x 10.50 / 8.40 = $30. If Runner 4 wins you make 24 x 9.50 - 30 x 7.40 = +$6.00, and if it loses, -24 + 30 = +$6.00.
This exit is a green up: the same profit whichever runner wins. Had Runner 4 drifted instead, the same formula would have fixed a loss, which is a red up. Commission is worked out on the market's net result, so this green up pays an illustrative 5% of $6 and keeps $5.70 either way. How to green up works through partial green ups, red ups and closing a lay.
Exchange trading and pre-race trading cover building and timing a trade under Australian rules, and exchange trading strategies sets out scalping and swing trading. Is exchange trading profitable counts what commission and the spread take over many trades.
To hedge a bookmaker bet, the lay goes on the exchange, where commission falls only on the lay's win, so the equal-result stake becomes back stake x back odds / (lay odds - rate). Hedging bets compares the two venues, and the hedge calculator sizes full and partial hedges.
Before you hedge, check that both bets settle on the same result: a bookmaker's dead heat rule can differ from the exchange's, and a bookmaker's deduction after a late scratching need not match the exchange's reduction factor. Hedge a multi applies the same lay to a multi's last leg before it starts, and cash out maths sets a bookmaker's early settlement offer against your own hedge.
Matched betting rests on the same lay, as the matched betting guide explains. So does backing a bookmaker's fixed price and laying the same runner shorter on the exchange, which horse racing arbitrage works through. Many bookmakers' terms restrict or prohibit automated betting, third-party access and multiple accounts, and let the bookmaker limit stakes, void bets or close accounts, a risk that stays with you.
Risk: Betting involves risk. A green up, a hedge or a back-lay arbitrage holds only if every bet in it is matched, in full, before the jump or the start; a part-matched hedge leaves you exposed, and there is no guarantee of profit. See responsible gambling for limits and support.
Lay betting in Australia: what the law allows online
A lay needs an exchange, and a provider that takes online bets from people in Australia needs a licence under a state or territory law. The Interactive Gambling Act 2001 makes providing an unlicensed regulated interactive gambling service to customers in Australia an offence (s 15AA).
ACMA's register of licensed interactive gambling providers lists every provider by trading name, with its licence holder, website and licensing authority. Its Betfair row gives Betfair Pty Ltd as the licence holder and the Northern Territory's wagering regulator as the licensing authority (register last updated 7 September 2026, checked 6 October 2026). The NT Wagering Commission's list of operators also included the company when checked on 6 October 2026.
An NT sports bookmaker or betting exchange licence allows bets on racing, approved sporting events and novelty events, so an exchange offers only the markets its licence and regulator allow.
| What you want to do | What the rules say |
|---|---|
| Lay or back a runner before the jump | Allowed with an exchange on ACMA's register |
| Lay or back a team or player before the game starts | Allowed with an exchange on ACMA's register |
| Bet online on a sporting event after it has started | Banned: the Act calls it an in-play betting service (s 10B), and ACMA lists in-play sports betting among the banned online services |
| Use an exchange that is not licensed in Australia | Illegal for it to offer betting here, and ACMA warns that Australian regulators cannot help if it withholds winnings |
| Pay in by credit card, a wallet linked to one, or digital currency | Online wagering providers may not take it, under the credit ban in force since 11 June 2024 |
Under the National Consumer Protection Framework, Australian online wagering providers must check your identity before you can place a bet and must offer deposit limits. Its National Policy Statement (updated 3 May 2022) says a reduction applies immediately and an increase only 7 days after the day you ask for it.
Is Betfair legal in Australia walks through reading its register entry, and in-play betting in Australia explains why online betting on sport stops when the game starts.
Note: Register entries can change, so check ACMA's register yourself rather than rely on this page. This is general information about the law, and B337 does not give legal advice.
Where lay bets go wrong, with the cost of each
With illustrative prices from the examples above and an illustrative 5% commission:
| Mistake | What it costs | The fix |
|---|---|---|
| Using one lay stake at every price | A $50 lay of Runner 6 at $25.00 risks 50 x 24 = $1,200, against 50 x 1.94 = $97 on Runner 1 at $2.94. One Runner 6 win costs as much as about 25 winning $50 lays keep (1,200 / 47.50 = 25.3) | Size each lay from the liability you can afford, not the stake |
| Judging value before commission | Laying Runner 2 at $4.00 when you rate it a $4.10 chance is worth +$1.22 on $50 before commission, but -$0.67 after it | Compare your fair price with the effective lay price, $4.16 at 5% |
| Leaving a hedge part-matched | If only $18 of the $30 Runner 4 lay is matched by the jump, you hold +$90.06 or -$6.00 after commission instead of +$5.70 either way | Check the matched amount, and finish or cancel the rest, before the jump |
| Re-entering a price from before a scratching | Once Runner 2 is scratched with a 25% factor, laying Runner 3 at $6.40 again lays a horse now priced nearer 6.40 x 0.75 = $4.80, worth about -$9.32 on a $25 lay | Re-price the race after every scratching before you lay again |
The working, row by row. Second: Runner 2's chance is 1 / 4.10 = 0.2439, so 0.7561 x 50 - 0.2439 x 150 = +$1.22 before commission and 0.7561 x 47.50 - 0.2439 x 150 = -$0.67 after it. Third: (228 - 18 x 7.40) x 0.95 = +$90.06 if Runner 4 wins and -24 + 18 = -$6.00 if it loses. Fourth: at $4.80 the chance is 1 / 4.80 = 0.2083, so 0.7917 x (25 x 0.95) - 0.2083 x 135 = -$9.32.
Liability is also where a bad day gets worse. If covering a lay would mean topping up the account, the lay is too big for the bank. Set the deposit limit your exchange has to offer before the day starts, and lower it rather than raise it after a loss.
Lay, back, trade or hedge: choosing the right bet
| Your view or position | The bet that fits | What you put at risk |
|---|---|---|
| A runner's price is shorter than its chance deserves | A lay, below your fair price after commission | The liability |
| A runner's price is longer than its chance deserves | A back, wherever the price is longest once commission is counted | The stake |
| You expect the price to move before the jump | A trade: back then lay, or lay then back | The opening bet's full stake or liability until the closing bet is matched |
| You hold a bet whose price has shortened | A full or partial hedge | Part of the upside; a partial hedge can still lose if the bet loses |
| You want the jump price without watching the market | A BSP bet, with a liability limit on a lay | The limit you set |
| You expect a runner to miss the places | A lay in the exchange place market | The liability if it places |
Skip the lay when:
- the liability is more than you could lose today without topping up the account
- the spread is wide or little money is waiting, because a thin market moves on one bet
- you have no view on the price: at a fair market price a lay is worth nothing on average before commission, so over many lays commission is its expected cost
- the game has started: online, betting on sport closes at the start
High strike rates make laying feel safer than it is, which is lay betting profitable tests on a long run of lays.
Risk: Betting involves risk. Choosing the right kind of bet does not make it a winner: a lay below fair can still cost its full liability, and there is no guarantee of profit. See responsible gambling for limits and support.
What B337 shows a layer, and what it leaves to you
The Terminal is B337's live odds board. It shows racing and sports prices from 40+ bookmakers beside Betfair's back and lay prices, with price history (flucs) and closing lines. That lets you see where a bookmaker price stands against the exchange before you lay or hedge. Prices are read on a repeating cycle, not tick by tick, so check the exchange's own price before you bet.
B337 does not bet on the exchange, back or lay. You place every lay, trade and hedge yourself, in your own exchange account; software that bets on the exchange itself is a different tool, covered in exchange betting bots.
A free account opens a limited view of the Terminal with live odds; Betfair prices start at Terminal View, as plans and pricing shows. Bookmaker names are trade marks of their owners. B337 is not affiliated with them.
For free and confidential support call 1800 858 858 or visit gamblinghelponline.org.au.
Risk: Betting involves risk. The Terminal's prices can lag the exchange's own, a lay can cost many times its stake, and there is no guarantee of profit. See responsible gambling for limits and support.