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What Does ‘Layoff’ Mean in Sports Betting?

what-does-layoff-mean

This is a great term because it’s used by both the sportsbook and bettor for risk management.

In simple terms, it’s a play to hedge your risk by placing bets on both sides.

1. The Bookmaker’s Hedge

This is the technical definition. A “layoff” is a bet that one sportsbook makes with another sportsbook to reduce its own risk.

It’s how the “house” hedges its own bets to avoid a massive loss.

Here’s a Simple Example:

  1. It’s the Super Bowl. FanDuel takes $1,000,000 in bets on the Cowboys.
  2. But they only take $100,000 in bets on the Eagles.
  3. FanDuel is now heavily exposed. If the Cowboys win, FanDuel has to pay out a huge amount of its own money.
  4. To protect itself, FanDuel will “lay off” some of that risk by placing its own $400,000 bet on the Cowboys at another sportsbook (like DraftKings).

Now, if the Cowboys win, FanDuel still has to pay its customers, but it also wins a giant bet from DraftKings, which helps cover its losses. It’s all about balancing their books.

2. The Bettor’s Hedge

This is most famously used in parlays where you place a bet on the opposite side of the original bet to guarantee a profit or reduce the risk.

Classic Parlay Example

Let’s say you placed a $10, 4-team parlay that would pay out $110.

  1. Game 1 (1:00 PM): You bet the Chiefs. They win. ✅
  2. Game 2 (4:00 PM): You bet the Lions. They win. ✅
  3. Game 3 (4:00 PM): You bet the 49ers. They win. ✅
  4. Game 4 (8:00 PM): The last leg of your parlay is the Cowboys -7.

You are now in a situation where you’ve risked $10.

  • If the Cowboys cover -7, you win $110.
  • If the Cowboys don’t cover, you win $0.

You can let it ride, or you can “layoff” (or hedge) your bet.

How to “Layoff” Your Risk

To guarantee a profit, you would place a new, separate bet on the opposite outcome of your last leg.

You would go and bet $55 on the Giants +7 (at -110 odds).

Now, look at your two possible outcomes:

  • If the Cowboys -7 win: You win your $110 parlay. You lose your $55 hedge bet.
    • Total Profit: $55 ($110 – $55)
  • If the Giants +7 win: You lose your $10 parlay. You win your $55 hedge bet (which pays $50 profit).
    • Total Profit: $40 ($50 profit – $10 parlay stake)

By “laying off” your bet, you’ve given up the chance at a $110 win, but you have guaranteed yourself a profit of at least $40, no matter what happens in the final game.