Back-to-Lay Arbitrage Explained in 2026: The Lay Stake Formula, Commission and the US Version

The quick answer

What it is: you back an outcome at a sportsbook and lay the same outcome on an exchange, so one position wins whichever way the event goes.

Lay stake formula: lay stake = back stake x back odds / (lay odds - commission rate).

Where it works: Betfair-style exchanges. Betfair's terms list the United States as a Prohibited Territory.

US equivalent: back at a sportsbook and buy the opposing contract on a prediction market. A contract at 69c works like a lay at decimal 3.23.

Cheapest US second leg before the game: Novig, which charges no fee to maker or taker on pre-game straight trades. If you can wait for a resting order to fill, Polymarket US pays a maker rebate.

Back-to-lay arbitrage pairs a bet for an outcome with a bet against it. The lay side needs an exchange, and Betfair's main exchange doesn't open accounts for anyone located in the United States. A US bettor gets the same position by buying the contract on the other side of the market.

What laying a bet means

Betfair's help center defines it this way: "To lay a bet is to back something not to happen." If you lay a team to win a soccer match, you win when it loses or draws.

The layer takes the other side of a backer's bet. You win the backer's stake if the outcome fails, and you pay the backer's winnings if it succeeds. Betfair's own example has you laying a golfer at 32 against a £10 backer stake, so you stand to win £10 or lose £310, and that £310 liability is taken from your balance as the worst case.

Back-to-lay arbitrage uses that structure as the hedge. The sportsbook bet covers the outcome happening, and the lay covers every other result in one bet, draws included.

How we checked

The formula and both examples are worked to the cent in a script and rounded at the end. Betfair's commission method, lay definition and territory restrictions come from Betfair's own help center and terms. Novig's and Polymarket US's fees come from their published schedules, and Kalshi's soccer market structure comes from its public API. All of those were opened on 6 October 2026 and rechecked on 7 October.

Kalshi's taker fee comes from its fee schedule effective 7 July 2026, checked on 7 October.

The lay stake formula, with commission

On a Betfair-style exchange, commission is charged on net winnings in a market. Betfair's formula is net winnings x Market Base Rate x (100% - discount rate), and its help page uses a 5% base rate in its examples. Losing bets pay no commission.

To make both outcomes pay the same, size the lay like this:

Lay stake (L) = back stake x back odds / (lay odds - commission rate)

Liability = L x (lay odds - 1)

The commission sits in the denominator because it only bites when the lay wins. Raising it makes the lay stake slightly bigger, so the lay still covers the back stake after the exchange takes its cut.

A worked back-to-lay example

Say a sportsbook offers a team at decimal 3.40 and the exchange will let you lay the same team at 3.20, with 5% commission. Back £100.

L = 100 x 3.40 / (3.20 - 0.05) = 340 / 3.15 = £107.94

Liability = 107.94 x (3.20 - 1) = £237.47

The two outcomes differ by a penny because the lay stake is rounded to £107.94. The cash you need is the £100 back stake plus the £237.47 liability, £337.47 in total, for a return of about 0.75%.

The same prices at three commission rates:

At 5%, the exchange takes more than half of what the same prices would make with no commission.

Why US bettors take a different route

The method needs somewhere to lay, such as Betfair, which the Gambling Commission licenses in Great Britain. Betfair's general terms list the United States of America and US territories among its Prohibited Territories, alongside Australia, Canada, France and Germany, among others.

US sportsbooks only let you back, so the lay side has to come from another product.

The US version: buy the opposing contract

On a prediction market, each contract pays $1 if its outcome happens. Buying the contract on the other side of a two-way market gives you the same payoff shape as laying.

Buying the opposing contract at price p matches a lay at decimal odds of 1 / (1 - p), with no commission. At 69c, that's 1 / 0.31 = 3.23.

On three-way soccer markets, Kalshi lists a separate market for each team to win and for the tie, each with a Yes and a No side. Buying No on one team covers the draw and the other team, which is the soccer lay in contract form.

A sum-checked US example

A sportsbook offers Team A at +240 (decimal 3.40) on a two-way moneyline, and a prediction market offers Team B at 69c. Back Team A for $100 and buy 340 Team B contracts for $234.60. Total outlay is $334.60.

If Team A wins, the sportsbook returns $340.00 and the contracts expire worthless: $340.00 - $334.60 = $5.40.

If Team B wins, the contracts pay $340.00 and the sportsbook bet loses: $340.00 - $334.60 = $5.40.

That's $5.40 before fees, about 1.6% of the outlay. Profit after the fee on the contract leg:

Novig charges no pre-game fee to either side, so a taker there keeps the full $5.40, and a taker on Kalshi or Polymarket US keeps about a third of a dollar. Polymarket US pays makers, so a resting order that gets filled keeps more than the raw edge, provided someone takes it before the price moves.

Polymarket US changed some fees again on 7 October 2026, so check its current schedule before relying on these figures.

Where back-to-lay arbs break

Settlement rules: both legs have to settle on the same facts. A void at one venue and a loss at the other leaves one side unhedged, so read the void and postponement rules on both before placing either.

Price movement: the second leg has to be placed at the price you planned. If the contract moves from 69c to 72c before you fill, 340 contracts cost $244.80 and the position loses $4.80 whichever team wins.

Whole contracts: contracts trade in whole numbers, so the sportsbook stake should be sized to produce a whole contract count, as $100 at 3.40 does with 340.

Depth: Novig publishes no order-book data, so the size available at a given price can't be checked from outside. Test a fill at your size first.

What to look for

Fee on the contract leg: check whether the venue charges before the game at all, then compare at your actual price and size, since fees peak at 50c.

Equivalent lay odds: convert the contract price with 1 / (1 - p) before comparing it with the sportsbook price.

Fill order: place the leg most likely to move first.

Settlement match: check that both venues treat voids, overtime and postponements the same way.

Your state: sports contracts are restricted or litigated in several states, so check availability on both venues before funding either.

Back-to-lay arbitrage FAQ

What is back-to-lay arbitrage?

It's backing an outcome at a sportsbook and laying the same outcome on an exchange at a lower price, so the two bets return a profit whichever way the event goes. The lay covers every result except the one you backed.

How do you calculate a lay stake with commission?

Lay stake = back stake x back odds / (lay odds - commission rate). Backing £100 at 3.40 and laying at 3.20 with 5% commission gives a lay stake of £107.94 and a profit of about £2.54 either way.

Can you lay bets in the US?

Betfair's terms list the United States as a Prohibited Territory. The US equivalent is buying the opposing contract on a prediction market, which pays out when the outcome you backed fails.

What is the best prediction market for arbitrage betting?

For the contract leg of a pre-game arb, Novig, because it doesn't charge a fee to either side of a pre-game straight trade. Polymarket US pays makers a rebate if you can wait for a resting order to fill.

How much commission does Betfair charge?

Betfair charges commission on net winnings in a market, at net winnings x Market Base Rate x (100% - discount rate). Its help page shows a 5% base rate turning a £100 win into £95.

Sources

All opened 6 October 2026 and rechecked 7 October 2026, except where noted.

Betfair, "What does the term Lay mean and what is a Lay bet?": support.betfair.com/app/answers/detail/417

Betfair, "What is Commission and how is it calculated?" and "What is the Market Base Rate?": support.betfair.com/app/answers/detail/413 and /412

Betfair General Terms and Conditions, clause 4.1.6 (Prohibited Territories): support.betfair.com/app/answers/detail/betfair-general-terms-and-conditions

Novig fee schedule: support.novig.com/en/articles/16195057-fees-on-novig

Polymarket US fee schedule (effective 1 October 2026; further changes effective 7 October 2026): docs.polymarket.us/fees

Kalshi fee schedule: kalshi.com/docs/kalshi-fee-schedule.pdf (effective 7 July 2026), opened 7 October 2026

Kalshi public API, KXEPLGAME, KXNFLGAME series and market listings, 6 and 7 October 2026