Puts up stakes, fencing badly (7)
I believe the answer is:
billets
'puts up' is the definition.
'stakes fencing badly' is the wordplay.
'stakes' becomes 'bets' ('bet' can be a synonym of 'stake').
'fencing' indicates putting letters inside (to fence can mean to contain or put a limit round).
'badly' becomes 'ill' ('ill' can be adverbial as in 'ill-advised').
'bets' enclosing 'ill' is 'BILLETS'.
(Other definitions for billets that I've seen before include "Soldiers' lodgings" , "Lodgings for the military" .)