I didn't have to look very hard on the betfair website to find this:

What is to 'lay' an outcome?



Laying an outcome is the opposite of backing it. It is betting that an outcome will NOT happen. This is what bookmakers traditionally do. For example, if you lay Derby County at Odds of 4.0 for £100, you think it is sufficiently unlikely that Derby will win that you offer Traditional Odds of 3/1 against it. Your total return, if Derby lose or draw, is £100 (i.e. the stake), and your maximum loss is £300 (which is what you would have to pay out). In effect you are accepting other people's bets who want Derby to win.

cheers,
chem