Liability is the term we use when we are placing our lay bets. It is essentially the amount of money we stand to lose if our lay bet loses.
Typically when placing a bet we are betting on the outcome winning. So, if we place a £10.00 bet on Everton to beat Manchester United at odds of 4.00 our liability is £10.00 with potential winnings (including stake) of £40.00. However when we lay against an outcome things work a little differently.
Now instead of backing Everton to win we are going to lay against them winning. So, we have laid £10.00 against Everton to win at 4.00. Our liability is now £30.00, with potential winnings of £10.00. This is because if we lay against the result we are essential acting like a bookmaker. Somebody is placing a bet of £10.00 on Everton to win at odds of 4.00 and we are accepting their £10.00 stake. So if Everton win, we lose our £30.00 of liability while the original backer receives his £10.00 stake back plus our £30.00. If Everton lose, we have won our lay bet, in this case £10.00.
Liability is displayed in red on both Betfair Exchange and Smarkets so we can easily see how much liability we stand to lose if our lay bet loses. In addition to this we can see a positive figure under the other outcomes in either yellow or green, this is simply the amount we stand to win should our lay bet win.
The picture above shows the layout on Betfair Exchange. We stand to lose £182.00 if West Brom win and a profit £100.00 if West Brom lose. If we placed a £100.00 back bet on West Brom at odds of 2.8 at the bookmaker, we would win £280.00 including our stake meaning we would have taken a £2.00 qualifying loss on this particular bet.