We often get asked how do bookmakers lay off bets? The answer is there are a variety of ways that bookmakers can lay off bets, but you need to understand how bookmakers work to comprehend why they don’t stand all the bets they take.
The Art Of Bookmaking
The art of bookmaking is to try and make books that give the bookmaker the biggest chance of making a profit, regardless of the result. Bookmakers try and do this by building a percentage into their books.
For example, in a tennis match between two equally matched opponents, the odds of either player winning should be even-money (2.00). That means if you had a £10 bet on both players, you would break even whichever one won. This is called a 100% book and, if all players are the same odds and backed to the same stake, a bookmaker would pay out the same amount of money as he had taken on the match.
But bookmakers can’t make a profit by offering 100% books, so they build a percentage into the book to try and make a profit. For our hypothetical tennis match between two players, bookmakers would offer 10/11 for either player to win. If you had £10 bets on each at these odds, you would only get back £19.10 for your £20 stake.
The £0.90 that you lost is 4.50% of your initial stake, and this is the type of profit that bookmakers are happy to make for little effort.
However, it is rare that both players are backed equally. For example, £10,000 may be staked on a tennis match, but £8,000 may be staked on player A and £2,000 on player B. The bookmaker then has the dilemma of either standing any potential losses on the match or laying-off some or all his potential losses.
For example, the bookmaker could lay off £6,000 of the £8,000 that has been bet with him on player A. This would leave him with £2,000 on player A at 10/11 and £2,000 on player B at 10/11. This would guarantee him a profit of £90, regardless of who won.
Some people would argue that taking the easy £90 is what a sensible bookmaker would do as, if you risk losing nearly £6,000 by letting the bets on player-A ride, it’s more gambling than bookmaking.
Of course, not all bookmaking is as easy as a two-player tennis match. Bookmakers also offer odds on horse races with 40 runners and golf tournaments with over 150 runners. But the basic principles of bookmaking remain the same. Bookmakers also build in a percentage for themselves into these markets and then lay off bets if their liabilities are higher than they want to stand.
Ways Bookies Can Lay-Off Bets
Bookies can lay off bets in a variety of ways to reduce their liabilities, including to other bookies, on the betting exchanges, and by offering cash out options to punters.
Laying Off Bets To Other Bookies
Bookies will often lay off bets on-course, which is sometimes referred to as laying off bets in the ring. Most big bookmakers have representatives at most major racecourses in the United Kingdom, and many smaller bookmakers will turn to these giants if they want to lay off bets.
But bookmakers such as William Hill and Ladbrokes aren’t obliged to take these bets, so sometimes bookmakers will send out runners to lay large bets off by placing smaller bets with lots of different bookmakers.
Laying Off Bets On The Betting Exchanges
Bookmakers were initially opposed to the introduction of betting exchanges introduction, as they took a lot of business away from on-course, high street, and online bookmakers.
But many bookmakers soon learned how to use betting exchanges to their advantage. Many bookmakers now use betting exchanges to lay off bets when their liabilities are too high. In truth, bookmakers are often trading liabilities on the betting exchanges with one another, though they don’t know who is taking the bets.
Laying Off Bets By Offering Cash Out Options
The invention of cash out options has been widely regarded as a brilliant one by punters, and they do give you a chance to bottle it if you think a selection might not win. For example, if your first two winners of a treble have won, bookmakers tend to offer you the chance to cash out the double before the third one runs. This is great if you think your third runner won’t win.
But don’t think for one minute that bookmakers invented cash outs for the benefit of the punter. Cash outs offer bookmakers the chance to do two things. Firstly, they give bookmakers the chance to limit their liabilities on any selection by offering punters the chance to cash out.
If these liabilities are high, you may get a slightly more generous cash out than you were expecting. But bookmakers tend to build in an additional percentage for themselves when offering a cash out. For example, if you had a £10 double on two horses at even-money, your return would be £40.
But if you placed a treble and you decide to cash out after your first two horses have won at even-money, you’ll tend to find that the cash out option is slightly less than £40. For example, it may be £38, which means the bookies have sneaked a little extra 5% in for themselves.
Find Value To Beat The Bookies
We hope you now understand how bookies lay off bets, and why. We also hope you now understand that bookmaking is about building in percentages that help bookmakers make a profit.
Indeed, most punters struggle to make a profit from gambling because bookmakers are so good at being bookmakers. But that doesn’t mean it’s impossible to profit from gambling.
The key to making make a profit from betting is the ability to constantly find value bets, which is betting on selections whose odds are bigger than they should be.
Let’s use our hypothetical tennis match as an example. The bookies may build in a percentage for themselves by pricing up both players at 10/11, but those odds are only the bookmaker’s opinion of what the odds should be.
After studying previous head-to-heads and other statistics, you might conclude that player-A has a 66% chance of winning. That would equate to a price of 1/2 (1.50), meaning 10/11 (1.91) are value odds.
Finding value like this is what professional gamblers and tipsters do to make a profit. It takes a lot of hard work and a professional approach to gambling to succeed, but it is possible to make long-term profits from gambling.
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We hope that’s answered your question, how do bookies lay off bets. If you’d like more betting advice, you’ll find lots of interesting and informative articles here on the Betting Gods blog.