Betting Exchanges 3
LAYING SELECTIONS TO LOSE
You may have an opinion on a football match, a golf event or any other sport that does not involve picking a winner. You may simply believe that a certain runner is too short and on Betfair you can back that opinion with hard cash simply by laying it. If you want to lay £20 at 4-1, £80 will be deducted from your betting balance, with that sum, plus the £20 stake, paid back in if you are proved correct.
The term 'play bookmaker' is often used when discussing the laying of bets on an exchange and has led to calls from the big bookmaking firms for all individual layers to be licensed. Betfair's Tony Calvin believes this is a red herring, though. He said: "We are the bookmakers. We just allow punters to bet on something not to happen as well as to happen. The definition of a bookmaker is someone that takes people's money at a given price and then pays out after the result is known. Betfair does that, and we are the bookmaker. Even the Government has admitted recently that laying and bookmaking are not the same.
CALCULATING THE BEST ODDS
All bets on Betfair are subject to commission, so though you will get better value more often than not, it will not always be the case. Depending on how much you bet, commission ranges from two to five per cent. You have to be a huge punter or a professional bookmaker to get anywhere near two per cent, and most Betfair punters will pay between four and five per cent commission on winning bets.
All Betfair prices are shown in decimals, so 2 is evens, 3 is 2-1, etc, and it is simple to work out your true price. All you do is multiply the price by 0.95 if your commission rate is five per cent (up to 0.98 if you are on two per cent). For instance, let's say 20-1 was available with a bookmaker, but 22 (21-1) on Betfair. The calculation is 21 multiplied by 0.95 = 19.95, which shows that you are better off with a bookmaker in this instance.
Remember, though, that all deductions are made on profits only, which makes odds-on betting attractive. Thus, a bet of £100 at 1-5 (or 1.2) returns a profit of £19 at five per cent commission (20-5% = 19).