What Does It Mean to ‘Cover’ a Bet?

There are times when you just can’t avoid placing a wager on a sporting event, or a political one, or a debate about the most recent TV show. But sometimes you just don’t want to get involved. Perhaps you’re meeting up with friends for lunch and the debate about popular TV shows seems endless. You don’t want to ruin your lunchtime. Or maybe you’re just on your way to the cinema for a film and the last thing you want to do is spend half of the show texting your friend about the latest episode of their favourite show. It’s at these times that you wish there was some way you could just skip the bet. Fortunately, there is – it’s called ‘covering’ the bet. And since placing a wager on a sporting event is usually a losing proposition for those who do it, it is, in fact, a type of insurance that you should look into, especially if you want to continue placing wagers, or if you’re just doing it to make your friends and family happy. It means you’ll lose what you put down, but it won’t hurt as much as if you’d actually won the bet (and been forced to pay up).

The Basics

‘Covered bets’ are those where you knowingly risk losing money. It is not necessarily a bad thing to risk losing money – many people enjoy playing the role of a gambler in a game of poker or roulette, for example – but it is a risky business and you should only do it if you are prepared for the consequences. These are the same consequences that come with placing a wager: your expectations of winning money are increased significantly, which makes it that little bit more exciting when you do win, and the joy of winning is diminished slightly by the knowledge that you are now in debt. It is a tricky line to walk, between having fun and being responsible. That is what makes it so attractive an option for those who want to continue placing wagers, or for those who just want to make their friends and family members happy by seeing them win, but can’t afford to lose very much anyway. Being able to ‘cover’ the bet gives them the security to continue pursuing their chosen profession, even if it is a losing one. People who love to gamble but don’t want to admit it publicly will often use this option to save face, since the stigma of being a ‘gamble-er’ has largely been removed, and people who love to gamble but don’t want to lose are often given a free pass by those who know about their habit.

When Do You Need To Cover A Bet?

The circumstances in which you need to ‘cover’ a bet are clearly defined in the UK legislation that regulates gambling, the Gambling Act 1989. You must do this if you are aware that the overall outcome of the bet (either win or lose) will have a material impact on your finances. For example, let’s say you are throwing a sports bet with some friends and one of them loses. Out of the four of you, he was the one who bet the most money; therefore, he will have to ‘cover’ the sum of the four bets (plus his own bet) – whether he wants to or not. In this case, you will need to decide (or your sportsbooks will need to decide for you) whether it is fair that he should have to foot the bill for the lunches of the other three – after all, it was his loss. If not, you can appeal against the result of the bet. This is called a ‘partial payment’ in relation to a wager and allows you to continue playing (although, as explained below, there are restrictions on how much you can play).

What About The Fringe Benefits?

Although placing a wager on a sporting event is usually a losing proposition, there are exceptions. For example, if the result of the bet falls within an exceptionally narrow margin of victory, it can still be considered a lucky hit. Similarly, if an underdog (usually, but not necessarily, a team from a smaller town or village) wins an event that is otherwise considered an impenetrable odds against them – like the English premier league or the French championship – they will often go home with their tails between their legs, but will still feel very pleased with themselves, and, of course, so will you! In these situations, you do not need to cover the bet. Instead, depending on the nature of the bet (and the numbers involved), you might end up with something else entirely. For example, let’s say you placed a £10 wager on a horse race that ended in a ‘no-result’ – in other words, the horse did not finish the race. Rather than lose £10, you will instead receive the return of your stake (minus a small commission) – a form of win-win-win!

To summarize, you must cover a bet if one of the following applies:

  • The overall result of the bet has a material impact on your finances (for example, you risk losing more than £100) – in this case, you will need to pay up;
  • You place a wager on a game of chance that is recognized as being dangerous or exploitative (for example, a lottery or slot machine) – in this case, you will need to pay up;
  • You place a wager on a sporting event that will have an actual result (that is, one of the teams will win or lose) – in this case, you will need to pay up;
  • You have a pre-existing agreement to pay up (for example, you are backing a friend’s horse in a horse race and they lose) – in this case, you will need to pay up; or
  • You are the beneficiary of a wagering scheme operated by a bookmaker or other establishment (for example, people who joined a bookmaker’s club and placed a series of bets on specific events will, at the end of the year, win a small prize if the sequence of events they bet on came true)

The Process

If you decide that you need to ‘cover’ a bet, you should do so as soon as possible after making the wager. Ideally, you should do this as soon as the event is over. The process of ‘covering’ a wager varies from case to case depending on the nature of the bet and the status of the parties involved, but it will usually involve one of the following: