Quite simply lay betting is when you bet on an outcome not to happen.
The most likely platform on which to place a lay bet is on a betting exchange such as Betfair or BetDaq.
With exchange betting you can buy or sell any given outcome in a sporting event. Until relatively recently, sports betting was fairly straightforward, if you backed a football team at 3/1 you could expect to receive £3 in winnings for every £1 staked should you bet be successful – and you would get your stake back. However, the ability to lay a selection changed the betting industry in a number of ways and this gave rise to the sports trading industry. You may choose to back a horse at a selected price or to lay a horse to lose at the price offered. You can also trade in or out at any time whilst your event is ongoing.
The key difference between a betting exchange and a traditional bookmaker is that on the betting exchange gamblers bet against each other. Essentially you can dictate the price you want to back or lay any given outcome. The exchange will charge a nominal commission on your net winnings, so you only pay commission if you have a winning trade. If you have a net loss on a market you do not pay commission.
Lay betting in horse racing is very popular. As you know picking the winner of a horse race is very difficult and quite often, if the race favourite is at a short price, it is more profitable if you back this horse to lose.
Betting exchanges display their odds in decimal format so 4/1 would be presented as 5.0 on an exchange ( to convert from fractional odds to decimal odds simply add one) prices on the exchanges are constantly moving so the ability to back at one price and lay the same selection at another price gives rise to the opportunity to lock in a profit regardless of whether the selection wins or loses.