Legal Definitions - layoff bettor

A layoff bettor is a bookmaker who accepts wagers from other bookmakers. These specific wagers, known as "layoff bets," are placed by the initial bookmakers to balance their own financial risk. When a bookmaker receives an unexpectedly large number of bets on a particular outcome, creating an imbalance that could lead to significant losses, they might place a layoff bet with another bookmaker (the layoff bettor). This action reduces the original bookmaker's potential loss by effectively sharing or transferring some of their liability.

• Example 1 (Sports Betting): Imagine "Victory Bets," a smaller online sportsbook, has received an overwhelming number of bets on the "Lions" to win a specific football game, far more than they anticipated. If the Lions win, Victory Bets stands to lose a significant amount of money. To mitigate this risk, Victory Bets places a large bet on the Lions with a larger, more established bookmaker called "Global Odds." In this scenario, Global Odds, by accepting this bet from Victory Bets, is acting as the layoff bettor. They are taking on a portion of Victory Bets' risk, allowing Victory Bets to balance its potential payouts and reduce its exposure.

• Example 2 (Horse Racing): During a major horse racing event, a bookmaker operating at the track, "Turf Wagers," finds that an unusually high volume of money has been placed on a particular underdog horse, "Dark Horse Delight," to win. Turf Wagers is concerned about the financial exposure if Dark Horse Delight pulls off an upset. To reduce their potential liability, Turf Wagers contacts "Paddock Pros," another bookmaker known for accepting large wagers, and places a significant bet on Dark Horse Delight. Here, Paddock Pros is functioning as the layoff bettor, accepting the risk transferred from Turf Wagers to help them manage their overall book.

• Example 3 (Hypothetical Event Betting): A specialized betting platform, "Election Odds," offers wagers on the outcome of a presidential election. As election day approaches, a surge of bets comes in favoring Candidate A, creating a significant imbalance in Election Odds' potential payouts. To avoid a massive loss if Candidate A wins, Election Odds places a substantial bet on Candidate A with "Market Movers," a larger international betting exchange that regularly handles such large-scale wagers. Market Movers, by accepting this bet from Election Odds, is acting as the layoff bettor, providing a mechanism for Election Odds to offload some of its concentrated risk.