For decades, horse racing betting was a zero sum game – punters and bookmakers were locked in battle, and one party would win and the other would lose.
But the advent of the Betfair Exchange at the turn of the new millennium changed the rules of engagement. Cutting out the ‘middle man’, punters were able to eliminate the bookies entirely, backing horses at prices with no margin built in.
Or, instead, they opted to become a layer themselves, making markets and staking against those that they believed were at odds shorter than their true ability.
It didn’t take long before a few realised that they could lock in a profit by taking advantage of odds movements on the exchanges – to the extent that they could walk away in the green regardless of who won the race.
This was the creation of back-to-lay, and it’s reverse strategy ‘lay-to-back’, horse racing betting.
What is Back-to-Lay Betting?
On Wall Street, traders generally abide by the maxim ‘buy low, sell high’.
And the same principles can be applied in reverse when it comes to horse racing betting – back at high odds, lay at lower prices.
There’s a number of reasons why odds drift. It could be that a horse is well fancied on race day – maybe it has started raining and softened the going, or a particular owner/trainer/jockey combination has won a few times on the card already.
And then we consider what happens when a racing market goes in-play – a horse’s odds will shorten if they come out of the stalls at pace and jumping well.
The idea behind back-to-lay betting is to back a horse at higher odds than you will later hedge at. Let’s use the example of the Champion Chase at the Cheltenham Festival. Our plan is to back Energumene at 4.4, and then lay the horse after a strong start at 2.5 to lock in either instant profit or create a free bet.
Here’s our first screen:
In theory, we would win £34 if Energumene triumphs and lose £10 (our stake) if any other horse prevails. But let’s say that the horse is well backed before the off, or it’s running strongly in the early going once the race has begun – his odds shorten to 2.5.
Now we have two choices. We can lay Energumene at £10 to create a free bet position:
In this scenario, we have created a ‘free bet’ for ourselves on Energumene – we’ll win £19 if the horse wins the Champion Chase, and if he doesn’t we’ll break even (shown by the £0.00 next to very other runner).
Alternatively, we could use the horse’s shortening as leverage to essentially back the field. Let’s say we backed him £10 at 4.4 and laid him £22.66 at 2.5:
Now we’ve created a situation where we will break even if Energumene wins, but profit to the tune of £12.66 – more than our initial stake – if any other horse triumphs.
Back-to-Lay Betting Strategies
So now we know the mechanics of back-to-lay betting: we want to bet on a horse at a high price, wait for it to shorten, and then lay it back – whether that’s to create a free bet, equalise profit or maximise our return on the field.
But where do these scenarios play out? Generally, there’s two rules of thumb. The first are those horses that are well backed as the race heads to post. Let’s say that Willie Mullins, as he tends to do, has a good start to the Cheltenham Festival. Energumene, one of his charges, will almost certainly be backed in as a consequence.
Another situation is a bit riskier, but the rewards are the same. Here, we would back frontrunning horses – those who tend to build a good lead in the early going – knowing that the mechanics of the market will mean that their odds simply have to shorten to win the race.
What is Lay-to-Back Betting?
Let’s take everything we’ve learned about back-to-lay betting and then flip it on its head.
Now, with lay-to-back betting, we’re looking to lay horses at short odds and back them as their price rises. This is the ideal strategy for backing favourites that we expect to stay further back in the field, biding their time before they power for the line.
Let’s look at the Ballymore Novices’ Hurdle, and imagine a scenario where we believe Sir Gerhard – the odds-on favourite – will occupy a position deep in the field in the early going. We lay him before the off at 1.77:
As expected, Paul Townend sits tight and keeps Sir Gerhard at the back of the field, and suddenly in-running the horse drifts simply because it is off the pace. Like before, we can now back Sir Gerhard and create profit across the field, or stake in a way that gives us a free bet on the market favourite:
Laid for £10 at 1.77, we can now back the horse with £10 at 2.8 to create a no-loss situation and potentially gain a full win should Sir Gerhard power through the field as hoped.
These are just some basic back-to-lay and lay-to-back strategies, but as you can see if the market moves as we want it to, we can create ‘free’ bets for ourselves or guaranteed profit no matter who wins the race!