In a betting exchange, “Back” and “Lay” bets are visually distinguished by color — Back bets appear in blue, and Lay bets appear in pink.

A Back bet means you’re betting on an outcome to happen — for example, backing a team to win.

A Lay bet means you’re betting against an outcome, essentially taking the role of the bookmaker. In this case, you’re betting that the outcome will not happen, and if you’re correct, you win the opposing player’s stake.

Liability is a key concept when it comes to lay betting. When you place a lay bet, you’re acting as the bookmaker. If the selection you laid loses, you win the opposing player’s stake. However, if the selection wins, you’re responsible for paying out their winnings — this amount is called your liability.

Your liability represents the potential payout you would need to make if your lay bet loses. It can often be greater than your original stake, so it’s important to understand the risk before placing a lay bet.