Laying a bet on Betfair means taking a bet on a horse or team which you will pay out on if that horse wins the race. If the horse loses the race then you keep the stake.

For instance, if you Lay £10 @ 4.0 on the Favourite horse in the race, that means you have taken a £10 bet from someone who wants the Favourite to win, and you have both agreed on a price of 4.0:

If Horse wins:
Lay bet loses so you payout £10 x 4.0 = £40 (including Stake)

If Horse loses:
Lay bet wins so you keep the £10 stake as your profit.