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What's an overlay?
Friday, August 16, 2013 - by Frank Cotolo

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At this time of the harness racing season, when there are stakes aplenty and overnight cards at a lot of harness tracks across North America, the sheer number of opportunities to wager can be inundating. Certainly there are far more races available than should or could ever be addressed. So, decision, with a fiscal plan of attack, is the essential element to be successful.

This makes it a good time for a bettors’ review of certain imperative definitions.

To many still adopting money-management methods to exert their betting bankrolls and control impertinent wagering, the concepts of “overlay” and “underlay” may still be obscure. I always receive questions about their definitions and how they came about, so here is a review.

An overlay and an underlay are opposite states of odds created by the betting public. However, they are subjective, based upon an individual’s evaluation of horses using percentages (odds).

When you feel a horse should be worth a certain price and that price is not met, then the horse, in your opinion, is beneath its value and, therefore, does not deserve a wager. That is an underlay.

The opposite state is when you feel a horse’s projected price is worth more than your estimation. If it is above its value, in your opinion, it deserves a wager. That is an overlay.

No professional bettor wagers on an underlay. Most professional bettors do not wager on an overlay if it is not near or 50-percent over the estimated price. All of them wager on overlays only.

Even at a casual level, wagering on a horse that offers more than it is worth in your handicapping process is a key to passing races and to winning races where you cash for more than you feel the horse was worth (therefore beating the public). Sometimes this means wagering on your second, third or fourth choice in a race, which is a practice professionals rely upon to earn long-term profits.

The origins of the terms, as veteran-racing writers in Great Britain explained them to me, come from bookmaking jargon. Before pari-mutuels, bookies would accept bets people would “lay” on them. The betting public, then, would look to lay money on horses the bookies offered at odds over those established by the local touts, bookmakers or daily racing publications (like The Sporting News) and feel they were betting lays “over” the common value.

In turn, the bettors would not lay money on horses with a value offered under the common odds established by the so-called experts.

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The views contained in this column are that of the author alone, and do not necessarily represent the opinions or views of the United States Trotting Association.

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