Being able to Lay and Back on Betfair gave rise to a new aspect of gambling that never existed before: the ability to bet on the direction of a horse or team's price, instead of betting on the actual result of the race or match.
For instance, I want to bet that the price of the Favourite horse will go up. I Lay £100 @ 4.1 on the Favourite and then try to Back £100 @ 4.6 on the same horse. The price goes up and my Back gets matched @ 4.6.
In the above scenario, I have Layed and Backed the same amount of money on the same horse, but at slightly different prices, giving me a profit if the horse wins but no loss if the horse loses:
If Horse wins:
Back bet wins £100 x 4.6 = £460
Lay bet loses £100 x 4.1 = £410
Result = £460 - £410 = +£50 profit
If Horse loses:
Back bet loses £100
Lay bet wins £100
Result = £100 - £100 = 0
Prices on horses, especially in the last minutes before the start of the race, become very volatile, offering many opportunities to profit from price movements before the race starts. 
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