Lay betting is an interesting concept that lets you become the bookmaker. In a horse race there can be only one winner right? So mathematically speaking it will be much easier to pick a losing horse or two or three than to pick a horse that will win. What this means is that lay betting does away with the traditional approach of backing a horse, instead when you lay a horse you are effectively saying that it will not win so when it wins you have to pay up thus why you can be described as a bookie.
Currently the best site for lay betting is BetFair betting exchange and here is an example of a lay bet.
If you lay Bernard Kemp @ 7 in the 4.30 at Kempton on Betfair for a USD 10 stake. Your liability is the stake multiplied by the horse’s laying odds minus the stake (USD 10 x 7 – 10 = 60), this means that you will lose USD 60 if Bernard Kemp wins the race.But if Bernard Kemp loses, as predicted, the payout you can expect will be USD 70 (USD 60 liability + 10 stake). Once you enter the stake on Betfair – your liability is automatically displayed. And to see the payout, just click the payout button so there is no need to bother calculating your liability and payout.
The main advantage of lay betting is that there are alot more horses that can lose than that which can win hence its only logical to assume that it easier to make money lay betting than picking a winner. On the flipside lay betting requires a very well thought out selection. It is often the case that horses which are not considered favorites have much larger odds and if they stage a surprise or an upset (maybe they woke up on the right side of the hay) it can cause a large liability and a larger loss.