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How to Calculate Lay Bet Winnings

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How to Calculate Lay Bet Winnings

Thu Jan 05, 2023 2:14 pm

As there is a more significant element of risk involved if you do not know what you are doing, understanding the maths behind lay betting is essential. While most exchanges will not let you risk more than you have in your account, you do stand to be liable for losses if you are not careful. For this reason, calculating any potential lay bet winnings ahead of placing bets is crucial.

In this guide, we will look at three things you need to calculate to lock in a profit, irrespective of the result of a bet. If you have followed our lay bet guides thus far, you will already have an idea of what lay betting involves. With that fresh in your memory, let us explain how to manually calculate lay bet winnings, starting with the most important aspect - your potential liability.

Calculate Your Liability

Liability is arguably the most critical concept of lay betting, so you will need to get this right before moving on to other calculations. At a typical bookmaker, if you back a bet and lose, you have lost your stake. Things are a little different with lay bets.

As you are effectively the bookmaker, if you lose your bet, you can end up having to pay out far more than your original stake. The total payout is known as your liability. Here is how you calculate your liability, with an example:

- You choose to lay a horse at £5

- Somebody else backs your bet at £20

- If any other horse wins, you will win the other punter’s stake of £20

- If your laid horse goes on to win, you will have to pay out £80

You do not pay out the original stake to whoever backed your bet. Therefore, the equation for calculating liability is as follows:

- Backer’s Odds x Backer’s Stake - Backer’s Original Stake = Liability

Calculating Your Lay Bet Winnings

Now that you know how much you are liable for, you can start to look at what you could win with a lay bet. There is a straightforward formula that you can use to do this. The general rule is as follows:

- Lay Stake x (1 - commission) - Back Stake = Profit

For instance, if you wanted to lay a £5 stake on odds of 2.00 and with a 2% commission (10p), you would be looking at a total profit of £4.90.

Calculating Your Matched Bet

Many punters who want to place lay bets at an exchange will also back a bet at a sportsbook. This is known as matched betting. Ignoring free stake (both returned and not returned formulas) and solely dealing with qualifying bets let us see how this works.

There are four formulas that you need to know for qualifying matched bets. They include:

- Calculating the Ideal Stake for Even Profit, Irrespective of the Result

Back Odds x Back State / Lay Odds - commission = Lay Stake

- Profit (if Back Bet wins)

Back Stake x (Back Bet Odds - 1) - Lay Stake x (Lay Bet odds - 1) = Profit

- Profit (if Lay Bet wins)

Lay Stake x (1 - commission) - Back Stake = Profit

- Final profit for a Qualifying Matched Bet

Lay Stake x (1 - commission) - Back Stake = Final Profit

Use Lay Bet Calculators

Even with the formulas in front of you, wagering lay bets and engaging in matched betting exchange is still fraught with difficulties if you do not do your homework. Fortunately, there are plenty of betting calculators out there, many of which appear at leading betting exchanges.

These winnings calculators may be available in advanced or simple formats; they may span basic qualifying bets or both Stake Returned and Stake Not Returned (SNR) betting options. A typical, simplistic lay bet calculator will allow you to enter your Back State, and Back Odds, Lay Odds and Lay Commission, and through this, you can find out your liability, stake, and what happens if you win your bet at the bookmaker and exchange. Each calculator may have a series of alternative options, so it is worth browsing around.

If you are new to laying bets, we would strongly suggest using a lay bet winnings calculator and a liability calculator to understand the situation better. Moreover, you can find calculators that are also ideal for identifying the best odds to back and lay if you want to make a tidy profit.

Top Tips for Maximising Lay Bet Winnings

If you simply do not have the time for calculating winnings or find that this step is just a touch more complicated than you might like, there are cheats sheets offering shortcuts to finding the ideal lay bets and maximising your profits. We have decided to include a few of these below.

- There are many websites out there offering so-called Lay of the Day tips. These span multiple sports and can often represent a sound investment. If you do not want to waste time calculating the potential returns from lay bets, then opting to go with one of these Lay of the Day tips could be ideal. Just remember that many other players on exchanges will be thinking the same thing, so you may need to act fast if you want someone else to back your lay.

- Choose to use a trusted exchange that will only allow you to be liable for what you have in your account. This way, you do not need to focus so much on calculating your liability. The exchange will not let you go over your balance. This frees up more time to calculate your potential lay returns.

- Rather than solely placing a lay bet at an exchange, it may be worth looking into matched betting with a sportsbook on the side. This can help you to lock in profits, although this does require extra reading.

- Horse races are some of the most fancied lay bets around. As there can only be one winner (and several places), your likelihood of pulling off lay bets is decent if you find someone interested in backing your odds.

- Take the time to understand how liability, liquidity, and profit work before engaging in lay betting. The better you know these concepts, the less risk there will be for you when engaging in lay betting at exchanges.

In any case, you might want to check our hedging calculator here.
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Formula for back/lay odds conversion

Fri Jan 06, 2023 8:18 pm

Hey guys! Sometimes I need (or want) to know the equivalent back odds for my lay bet. I have found an online calculator to help me with this portal/hedging-calculator/ but it's only 2 decimals and I would prefer to have the actual formula so I can insert it in Excel. I have found the following formula: LAYODDS = 1 + ( 1/(BACKODDS-1) ). However, this does not work well in excel, since it gives back the answer in % and not decimal odds. Does anyone have the correct formula that also works in excel? If I were a math pro, I'm sure I could just figure it out by myself, but unfortunately, I'm not... :)
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Re: Formula for back/lay odds conversion

Sat Jan 07, 2023 7:16 am

Would you have the same formula for Lay odd ?

With Cv being the odd value to be found : Cv = C - ( C -1 ) * com

Does it look valid ?
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Re: Formula for back/lay odds conversion

Sun Jan 08, 2023 6:13 pm

Yes yes  ;D  Beer are stronger in my county :)

Coming back to the subject, would you complete the example ?

How is it used ? This means if the player wins, and if i back with 2€ with 1.7 as odd, my profit will be  2 * 1.665 - 2 = 1.33€ (instead of  1.7 * 2 - 2 = 1.4€)
Then i have to minus lay loss = 1.52632 * 2.27 - 2.27 = 1.19474€ (instead of 1.5 * 2.27 - 2.27 = 1.1135€)
So my final profit will be 1.33€ -  1.19474€ = 0.13526(instead of the previous calculated 2 = 1.4€ - 1.1135€ = 0.2865€)

Am i correct this time or i drink another beer ?  :o
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Re: Formula for back/lay odds conversion

Sun Jan 08, 2023 6:33 pm

I were supposing to do back and lay in a betting exchange with a commission on both moves.

I feel what you just said is what is aid previously or i miss something ?
ie ie based on my understanding that :

1. the betting exchange shows odds which does not include commissions so we have to calculate them if we don't want the balance account shows us some surprises.
2. I modify the odds presented by the betting exchange with the help of your formulas to obtain "virtual odds" from which i can do my usuals calculations (which we did in our last 2 messages as i feel we said the same thing)
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Re: Formula for back/lay odds conversion

Sun Jan 08, 2023 7:18 pm

Commissions in Matchbook are different!. This is just for Betfair, Smarkets, Betdaq, etc.

Back bet with commission, both formulas
2€ @1.7 (less commission): 2 * 1.7 - 2 (less commission) = 1.4 (less commission) = 1.33
2€ @1.665: 2 * 1.665 - 2 = 1.33
It's clearly the same.

But I don't know where did you get the lay stake and the lay formula. In generally I do the math using liability and back odds equivalent for the lay bet.

Lay bet equation profit: liability * back odds eq - liability
In your case: Lay odds is 1.5. So back odds eq = 3.
And the correct liability should be 1.15

Lay bet with commission (using back odds equivalent), both formulas
1.15€ @1.5(lay) (less comm) = 1.15€ @3 = 1.15 * 3 - 1.15 (less comm)= 3.45 - 1.15 (less comm) = 2.30 (less comm) = 2.30 - 0.115 = 2.185
1.15€ @1.5263(lay) = 1.15€ @2.9 = 1.15 * 2.9 - 1.15 = 3.335 - 1.15 = 2.185
It's also the same.

Your arbitrage:
2 @1.7 (back): profit => 1.33
1.15 (liability) @1.5 (lay): profit => 2.185

Arbitrage profit:
1.33 - 1.15 (if you win back bet) = 0.18
2.185 - 2 = 0.185 (if you win the lay bet)

I know it looks complicated, but I always do the math using back bets (converting lay odds to back odds equivalent and using the back bet formulas)
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Kynao
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Re: Formula for back/lay odds conversion

Mon Jan 09, 2023 7:40 pm

ok, so the formulas we are talking about don't work on matchbook, noted.

>But I don't know where did you get the lay stake and the lay formula.

The lay stake, i just gave is an example, so what not?
About the lay formula, i'm confused, you were the one to give it to me in this thread RealLay = (Lay - Com) / (1 - Com), i'm just using it.

>Lay bet equation profit: liability * back odds eq - liability. In your case: Lay odds is 1.5. So back odds eq = 3. And the correct liability should be 1.15

I'm sorry, i'm getting more confused, what's the point ?

> Lay bet with commission (using back odds equivalent), both formulas
>1.15€ @1.5(lay) (less comm) = 1.15€ @3 = 1.15 * 3 - 1.15 (less comm)= 3.45 - 1.15 (less comm) = 2.30 (less comm) = 2.30 - 0.115 = 2.185
>1.15€ @1.5263(lay) = 1.15€ @2.9 = 1.15 * 2.9 - 1.15 = 3.335 - 1.15 = 2.185

Ok, i'm lost  :o, would have been easier for me to rely on the previous example than starting on a new one.

At the end, whatever the kind of approach, i rely on formulas giving me the opposite stake amount i should look for,
=> ie for given lay and back odd and stake of one side, i calculate the stake for the other side so for the example of a back / lay calculation, i have a formula taking into account a ponderation coefficient (allowing you to define more a side against the other) but this formula does not take into account commissions.

This is the reason why at the end, instead of commissions formulas based on odd, i would prefer simpler commission formulas based on profit.
Last edited by Kynao on Fri Jul 27, 2018 7:41 pm, edited 1 time in total.
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Re: Formula for back/lay odds conversion

Wed Jan 11, 2023 7:55 pm

OK. My confusion is because I don´t know this formula in your first example:
while on the lay bet i lose lay odd * lay stake - lay stake = 1.5 * 2.27 - 2.27 = 1.1135€
Where did you get this? You cannot use lay odds as if they where back odds and multiply them by a stake. I think this is the whole problem.

You must convert lay odds to back odds equivalent, and you must use a liability (given that 1.5 lay odds is equivalent to 3 back odds, the right liability should be 1.15 to have equal profit in both cases).

This is what I used in my previous post.
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Kynao
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Re: Formula for back/lay odds conversion

Sat Jan 14, 2023 8:19 pm

ppintaluba wrote:
while on the lay bet i lose lay odd * lay stake - lay stake = 1.5 * 2.27 - 2.27 = 1.1135€
Where did you get this? You cannot use lay odds as if they where back odds and multiply them by a stake. I think this is the whole problem.
If we forget commissions one moment, and talk about lay only :
- when the player looses, your lay wins and your profit = lay stake
- when the player wins, your lay looses and your loss = lay odd * lay stake - lay stake
At least in my country, this is how it works  ;D
You must convert lay odds to back odds equivalent, and you must use a liability (given that 1.5 lay odds is equivalent to 3 back odds, the right liability should be 1.15 to have equal profit in both cases).
Maybe  ;) I give up odds commissions calculations, whatever the discussion place, too much talks i don't understand  ;D, i will concentrate on commissions calculated on profits whatever SMarkets with its
Commission charged = ((stake * odds) - stake) * commission rate or Matchbook with its stake odds * odds * commissions, it's dead simple, nothing to misunderstood, no talks just using and this so relaxing  ;D

Thank you for trying to make understand odds commissions but apparently it's not for me.
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Re: Formula for back/lay odds conversion

Sun Jan 15, 2023 9:13 pm

- when the player wins, your lay looses and your loss = lay odd * lay stake - lay stake
When your lay loses, you don't pay commission. You loss is your decision.It is defined by the lay stake (that you decide manually) and the lay odds (but no commission must be considered). If you lay XXX Euros, at 1.5 lay odds you will lose the same amount whether your commission is 1% or 8%. So I really don´t know how to make the math this way. Sorry.
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Kynao
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Re: Formula for back/lay odds conversion

Tue Jan 17, 2023 9:21 pm

When your lay loses, you pay a commission on Matchbook but that does not change a thing :
when your lay loses, your liability is lost, ie in your example" If you lay XXX Euros, at 1.5 lay odds"  you will lose XXX * 1.5 - XXX  and there are no commissions in that formula.
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Re: Formula for back/lay odds conversion

Thu Jan 19, 2023 9:58 pm

Kynao wrote: When your lay loses, you pay a commission on Matchbook but that does not change a thing :
when your lay loses, your liability is lost, ie in your example" If you lay XXX Euros, at 1.5 lay odds"  you will lose XXX * 1.5 - XXX  and there are no commissions in that formula.
That's why you don't have to adjust lay odds in this formula. You lose XXX * 1.5 - XXX no matter your commission. So you don´t have to change 1.5 to 1.5263.

So going back to the start.
You adjust your back odd (from 1.7 to 1.665) to consider 5% commission
You don´t adjust the lay odd in the lay bet.
How is it used ? This means if the player wins, and if i back with 2€ with 1.7 as odd, my profit will be  2 * 1.665 - 2 = 1.33€ (instead of  1.7 * 2 - 2 = 1.4€)
Then i have to minus lay loss = 1.52632 * 2.27 - 2.27 = 1.19474€ (instead of 1.5 * 2.27 - 2.27 = 1.1135€)
So my final profit will be 1.33€ -  1.19474€ = 0.13526.  (instead of the previous calculated 2 = 1.4€ - 1.1135€ = 0.2865€)
The last 2 equations are wrong, as you should keep the 1.5 odds in this case.
Lay loss = 1.5 * 2.27 - 2.27 = 1.135 (please note in your first post you wrote 1.1135 which is wrong)

So your final profit will be 1.33€ -  1.135€ = 0.195.
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Re: Formula for back/lay odds conversion

Sat Jan 21, 2023 3:36 pm

ppintaluba wrote: That's why you don't have to adjust lay odds in this formula. You lose XXX * 1.5 - XXX no matter your commission. So you don´t have to change 1.5 to 1.5263.

So going back to the start.
You adjust your back odd (from 1.7 to 1.665) to consider 5% commission
You don´t adjust the lay odd in the lay bet.
Sorry i wanted to answer before but i had to stop fire on urgent stuff.
Yes, because i work on matchbook api actually , i think of matchbook in priority, just after i will work on betfair api so i will think of betfair in priority and so on...
The last 2 equations are wrong, as you should keep the 1.5 odds in this case.
Lay loss = 1.5 * 2.27 - 2.27 = 1.135 (please note in your first post you wrote 1.1135 which is wrong)
So your final profit will be 1.33€ -  1.135€ = 0.195.
Ok, so finally our principe is egal, i mean we have the same understanding
as our calculation is different just because i calculate with commissions on lay (because i think of matchbook)
while you calculate without commissions because you think of whatever is not matchbook.

My final question (as a confirmation) is : were my calculations right in the context of matchbook (supposing commissions were applied on both back and lay and with 5% on both) ? (EDIT : and supposing Matchbook were calculating commissions on lay like the others....)
Last edited by Kynao on Mon Jul 30, 2018 3:56 pm, edited 1 time in total.

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