Layoff
When a bookmaker reduces its own risk on a market by placing offsetting bets with other books or on an exchange.
Definition
A layoff is the bookmaker's version of hedging: when a book has taken lopsided action and faces a large potential loss on one outcome, it places bets on that outcome elsewhere, with another bookmaker or on an exchange, to reduce (lay off) its exposure. The goal is to cap risk and move the book back toward a balanced position where it profits from the margin regardless of result. The term dates back to a network of bookmakers passing risk between each other.
Worked example
A book has taken $200,000 on Team A and only $50,000 on Team B, exposing it to a big loss if A wins. It lays off by backing Team A for $75,000 on an exchange, trimming its downside so the outcome no longer threatens a damaging loss.
Why it matters
Understanding layoffs shows learners how books manage risk rather than gamble, and it mirrors the exact hedging logic a sharp bettor uses on an exchange to lock profit or limit loss.