[Gaz]

I've only just started using Betfair, making comparatively very small bets to start off with (while I'm getting used to it) but have made a profit of about a tenner over the last few days.

I'm interested to know, what are your strategies? Do you go in for lay betting, or just stick to the better odds offered over a high street bookie? Stick to particular sports or try to mix and match it a wee bit?

Taking me a wee while to get used to lay betting, laid £2 on the Man City v Spurs game not to finish a draw and won my £2 (thanks, Crouchy!) with a liability of 3.70.

To you

[blue4578]

Strategy No.1: Don't win too much or they'll help themselves to 20% of your winnings.

[fanny paddery]

blue4578, on 07 May 2010 - 17:45, said:

Strategy No.1: Don't win too much or they'll help themselves to 20% of your winnings.

Strategy No.2: Don't win anything as they will help themselves to 5% of your winnings !

[Gaz]

blue4578, on 07 May 2010 - 17:45, said:

Strategy No.1: Don't win too much or they'll help themselves to 20% of your winnings.

fanny paddery, on 07 May 2010 - 18:29, said:

Strategy No.2: Don't win anything as they will help themselves to 5% of your winnings !

Yeah I'm aware they take a commission, but the odds make up for it.

Chelsea v Wigan tomorrow is 1/12 at Ladbrokes, 1/8 at Betfair.

Put £20 on it and you'll win £1.66 at Ladbrokes or £2.50 at Betfair, who will deduct 12.5p from your winnings, meaning you win £2.375 - still 70p more than at Ladbrokes.

I don't think I've anything to worry about with them taking 20% of any winnings I make

This post has been edited by Gaz: 07 May 2010 - 19:35

[Virtual Insanity]

blue4578, on 07 May 2010 - 17:45, said:

Strategy No.1: Don't win too much or they'll help themselves to 20% of your winnings.

What's that now? Any details on when betfair take 20%? Seems I've never won enough for that to happen, but it might happen if I get lucky in the summer.

[mid-table]

Virtual Insanity, on 10 May 2010 - 16:00, said:

What's that now? Any details on when betfair take 20%? Seems I've never won enough for that to happen, but it might happen if I get lucky in the summer.

Search "betfair premium charge".

[Virtual Insanity]

Interesting. Shouldn't impact me in the short term, will need to investigate this further. How does this affect blue4578 and other high stakes punters?

Edit: i.e. is there any way around it for them? And does betfair tell you how many markets you have bet on in your time there?

This post has been edited by Virtual Insanity: 10 May 2010 - 16:28

[fanny paddery]

Virtual Insanity, on 10 May 2010 - 16:27, said:

Interesting. Shouldn't impact me in the short term, will need to investigate this further. How does this affect blue4578 and other high stakes punters?

Edit: i.e. is there any way around it for them? And does betfair tell you how many markets you have bet on in your time there?

Plenty, plenty ways around it, the best 1 being large stakes on an event on betfair and hedging it with another bookmaker to lower your profit and loss

[blue4578]

I shouldn't have brought this up really as it is unlikely to affect anyone here. If you're interested in your Premium Charge position, make sure you're logged into your Betfair account and open this page in another web browser:

https://premiumcharg...umPortal/portal

From Betfair:


Will my account be affected by the Premium Charge?


You will only be considered for the Premium Charge if, over the lifetime of your account, you satisfy all of the following criteria:

• Your account is in profit;
• Your total charges generated are less than 20% of gross profits; and
• You bet in more than 250 markets.

Two further conditions reduce the likelihood that you will be required to pay the Premium Charge:

• Any single win that constitutes more than 50% of your gross profits over the lifetime of your account will be excluded from the calculation; and
• Each customer has a lifetime allowance of £1,000 of Premium Charges which can be incurred before any Premium Charge is paid.

Each week the customers who meet all the conditions set out above will be charged the lesser of:

• The difference between 20% of the previous week’s gross profits and the total charges generated during the week; and
• The difference between 20% of gross profits and the total charges generated during the lifetime of the account.

Please note that for the purposes of calculating the charge we will assume that the charge has been in place since Betfair launched in June 2000. This means that we will consider all customers to have generated charges equal to at least 20% of lifetime gross profits as of the 12th October 2009. However, this also means that for some customers, some or all of the £1,000 allowance against the charge will have been used prior to 12th October 2009 in order to offset hypothetical charges paid. The assumption that hypothetical charges, less allowance, were paid prior to the introduction of the Premium Charge will typically reduce the Premium Charge a customer would incur.




[The way Betfair calculates the total charges is also very much in their favour but I won't bore you with the details.]

Your £1000 allowance means you have to be an absolute minimum of £5,000 in profit (if you've never lost a bet). The Premium Charge was brought in to take money from people like in-running traders** using sophisticated software and people trading markets using bots, particularly people who rarely make a loss on an individual market. Betfair's argument was that these people were "taking too much money out of the exchange", since Betfair reckon it costs them anything from £20-£100 in adveritisng and incentives to attract each new customer, most of whom will be losers.

** = in running traders, in a sport like tennis for example, often trade point to point during a match using their specially designed software. Some people using this method rarely make a loss on any market if their maths is correct. I know one or two who make £1m+ per year, who naturally were up in arms when the Premium Charge came along.


Betfair have a virtual monopoly, so while people were up in arms and threatening to go elsewhere, there is no liquidity in running on other exchanges and generally a lot less liquidity anyway. So people had no choice but to stay and make the best of it. Betdaq offered me 1% commission for a year just for sending them a copy of my Betfair points statement, but while liquidity in certain sports has increased dramatically in the past 12 months, it is still a million miles away from Betfair.

Last autumn Betfair moved the goal posts, changing the Premium Charge from being based on your previous 60 weeks activity to the lifetime of your account - which was extremely good news for me. For a long time I was right on the 20% threshold and very close to paying it on a number of occasions. Any decent win, like if I'd backed Wolves to win the Championship at 16/1 at Betfair, or a £50,000 baseball bet that narrowly lost going the other way, and I would've been paying the Premium Charge since it started. The Premium Charge wasn't aimed at people like me, but it's only through pure luck that it didn't get me. The lifetime thing saves me largely due to a long time betting on baseball with a very high turnover but only a 3-4% profit margin. My total charges now is something like 34%, I'd need to win a very large sum very quickly to be in danger, unless they change the rules again of course.

fanny paddery, on 10 May 2010 - 18:32, said:

Plenty, plenty ways around it, the best 1 being large stakes on an event on betfair and hedging it with another bookmaker to lower your profit and loss

No.

If the bet were to win in Betfair, you'd be screwed. There are ways to avoid it, the best being developing a strategy that has a very high turnover but wins very little or even loses. I know a guy who has a bot running on obscure football leagues, that loses him about £30,000 a year, but he is delighted as the associated turnover saves him about £100,000 on his PC bill. That's how daft Betfair is at the moment, people are looking around for strategies that don't win to lower their PC liability. Arbing would also work, as usually arbs lose in Betfair and win elsewhere and show a net loss in Betfair. Getting the other side of the arbs on is the tricky bit.

The final option, is to get a big loser to bet on one of your sub accounts, or to take over a big loser's account. If I gave Paul Merson a sub account on my Betfair account, that would be great because if he is losing £250,000 a year but generating implied charges and paying commission when he does win, that is going to save me a fortune on the PC - if I was paying it.

Anyway, I was just being flippant, didn't mean to generate a full on debate. Carry on.

[blue4578]

Betfair today just massively increased the size of their Premium Charge "net", which is now going to catch an awful lot more people and cost those people an awful lot more money. The size of the charge has gone from 20% to 40%-60% and the threshold needed to be hit with the charge has also doubled. New rules apply from July 18th. This doesn't even take into the account commission that you're already paying them, so some people could be paying Betfair 65% of their winnings.

Put simply, previously you had to generate less commission than 20% of the amount you won to pay the charge. Now, you have to generate less than 40% of the amount you won in commission to be liable, and if you are liable, the charge will be at least double what it was before. There is a minimum lifetime net profit of £250,000 but unfortunately that doesn't save me either.

Example:

Let's say you've won £400,000 overall. Previously, as long as you'd generated at least £80,000 (20% of your winnings) in commission, you'd be exempt from the charge. If you were a bit under £80,000, you'd be liable for the charge but there was a £1,000 allowance before you had to pay it, and the amount you'd be liable for would be fairly small.

Now under the same circumstances, if you'd won £400,000 and generated £80,000, you'd be paying Betfair at least 40% of your winnings, and likely 50% or 60% depending on the exact figures, each week. Of course when you have a losing week, there is no rebate so you lose both ways.


My commission generated is about 35% of the amount I've won, so it's got me and there's little I can do to escape. If I open another account under another name, I'll likely to be paying the Premium Charge virtually from the start. If they catch me doing that I'll likely be banned from the site anyway. The only way to avoid the new charge will be to initially lose a large sum and then once my commission generated gets to 40%, win less than I do now. Overnight, I suddenly cannot use Betfair at all as of July 18th. This is particularly true as I use Betfair for hedging other positions and occasionally arbing (which was originally to avoid the PC).

I do tend to use Betfair for hedging long-term football bets on occasion. For example let's say next football season I backed Chelsea to win the league. Victor Chandler and a few others are joint best price @ 11/4. If I stuck £40,000 on Chelsea (to potentially win £110,000), I might decide that I want to hedge my bets slightly if they open up a 10-point lead at Christmas. I could go to bookmakers and back all of the other contenders at best price, but it's much easier and you'll nearly always get a better price by simply laying Chelsea on the exhanges. So in this example, let's say Chelsea are 1.3 at Christmas with their 10-point lead. Roughly speaking, at this point I'd want to be laying £116,000 @ 1.3 to ensure a profit of about £76,000 either way. Let's assume that Chelsea then fail to win the league. I've won £116,000 at Betfair (a little bit less after commission), but then Betfair help themselves to 60% of this amount (£69,600), so in fact when everything is taken into account, I've actually only won £4,000 or so. If Chelsea had won the league, I'd have lost £34,800 at Betfair, thus greatly helping my future Premium Charge position and making it unlikely I'd pay it that week in May, and won my bet at Victor Chandler and thus would be £76,000 up. If I'd actually backed Chelsea at Betfair originally, I'd be screwed either way whether they won the league or not, unless I could find a way to lose about £76,000 on other bets the week that the league title is decided. The position is now that I simply can't afford to win at all at Betfair while I'm below their 40% threshold, and any big wins are suicidal as they'll just help themselves to most of the winnings.



You'll have to excuse all the waffle here, but I'm not the only person today who is absolutely raging. This is a life changing decision for me that Betfair have made today, and has me seriously looking at a career change three weeks from now. I am going to initially attempt to use Betdaq to do pretty much what I do now, but Betdaq are massively inferior to Betfair in so many ways and offer nowhere near the same amount of markets and very little in-play. The amounts of money being traded on most things is massively lower than Betfair, although liquidity in certain markets has massively improved over the past year or so. No bookmakers will take any bets from me, no matter which of my many identities I use, so betting with traditional bookmakers simply isn't an option. Betfair have taken this decision to screw some of their more successful customers because their share price has fallen by 50% since they floated. The chief executive announced he was quitting yesterday, although he is likely being forced out by investors very unhappy with the way the shares have performed. Put simply, Betfair need to generate more revenue and they have decided that this is the best way to do it. I was only saying to some a couple of weeks ago that I was expecting Betfair to increase their charges this summer due to the way the shares were performing. I thought they'd do the Premium Charge first as increasing the base commission rate would probably generate more of a stir. I didn't anticipate the massive hikes that they announced today, it is astonishing that they have decided to do this. I assume they'd maybe increase the charge from 20% to 25% or increase the commission generate threshold in the same way. Instead it's more than doubled.

It won't stop there either. The base commission I would imagine won't remain at 5% indefinitely. They'll be looking for ways to squeeze more money out of people that way too. Betfair used to advertise using the slogan "Winners Welcome". Now, they are just as bad as any bookmaker who won't take any bets. The only people Betfair wants are losers and possibly those who break even. If you win and have the cheek to actually win and take money from the exchange, Betfair will be taking a large slice of that money first. I wouldn't be surprised if Betfair start seeding their own markets to make up for all the market makers and layers who will now go elsewhere.


Final point is that many people reading what I've just written are probably thinking serves you right, I don't care, it won't affect me, or things to that effect (and worse!). I'm well aware that probably no one else here is likely to be affected by the Premium Charge. However from July 18th, if you actually bet on slightly more obscure markets at Betfair, such as perhaps correct score in football outside the Premier League, American Sports, golf (apart from outright winner markets), Scottish football and so on, then don't be surprised if when you go to place a bet, all you are confronted with is a near blank screen with virtually no money in the markets at all, or at least nothing at any sensible price. It's difficult to predict exactly what will happen, but if Betdaq or anyone else get their act together and offer a credible alternative, then Betfair have just signed their own death warrant with what they've done today.

All would be rosy if I could just become friendly with Paul Merson and persuade him to let me use his Betfair account.....

[ayrmad]

blue4578, on 28 June 2011 - 22:20, said:

Betfair today just massively increased the size of their Premium Charge "net", which is now going to catch an awful lot more people and cost those people an awful lot more money. The size of the charge has gone from 20% to 40%-60% and the threshold needed to be hit with the charge has also doubled. New rules apply from July 18th. This doesn't even take into the account commission that you're already paying them, so some people could be paying Betfair 65% of their winnings.

Put simply, previously you had to generate less commission than 20% of the amount you won to pay the charge. Now, you have to generate less than 40% of the amount you won in commission to be liable, and if you are liable, the charge will be at least double what it was before. There is a minimum lifetime net profit of £250,000 but unfortunately that doesn't save me either.

Example:

Let's say you've won £400,000 overall. Previously, as long as you'd generated at least £80,000 (20% of your winnings) in commission, you'd be exempt from the charge. If you were a bit under £80,000, you'd be liable for the charge but there was a £1,000 allowance before you had to pay it, and the amount you'd be liable for would be fairly small.

Now under the same circumstances, if you'd won £400,000 and generated £80,000, you'd be paying Betfair at least 40% of your winnings, and likely 50% or 60% depending on the exact figures, each week. Of course when you have a losing week, there is no rebate so you lose both ways.


My commission generated is about 35% of the amount I've won, so it's got me and there's little I can do to escape. If I open another account under another name, I'll likely to be paying the Premium Charge virtually from the start. If they catch me doing that I'll likely be banned from the site anyway. The only way to avoid the new charge will be to initially lose a large sum and then once my commission generated gets to 40%, win less than I do now. Overnight, I suddenly cannot use Betfair at all as of July 18th. This is particularly true as I use Betfair for hedging other positions and occasionally arbing (which was originally to avoid the PC).

I do tend to use Betfair for hedging long-term football bets on occasion. For example let's say next football season I backed Chelsea to win the league. Victor Chandler and a few others are joint best price @ 11/4. If I stuck £40,000 on Chelsea (to potentially win £110,000), I might decide that I want to hedge my bets slightly if they open up a 10-point lead at Christmas. I could go to bookmakers and back all of the other contenders at best price, but it's much easier and you'll nearly always get a better price by simply laying Chelsea on the exhanges. So in this example, let's say Chelsea are 1.3 at Christmas with their 10-point lead. Roughly speaking, at this point I'd want to be laying £116,000 @ 1.3 to ensure a profit of about £76,000 either way. Let's assume that Chelsea then fail to win the league. I've won £116,000 at Betfair (a little bit less after commission), but then Betfair help themselves to 60% of this amount (£69,600), so in fact when everything is taken into account, I've actually only won £4,000 or so. If Chelsea had won the league, I'd have lost £34,800 at Betfair, thus greatly helping my future Premium Charge position and making it unlikely I'd pay it that week in May, and won my bet at Victor Chandler and thus would be £76,000 up. If I'd actually backed Chelsea at Betfair originally, I'd be screwed either way whether they won the league or not, unless I could find a way to lose about £76,000 on other bets the week that the league title is decided. The position is now that I simply can't afford to win at all at Betfair while I'm below their 40% threshold, and any big wins are suicidal as they'll just help themselves to most of the winnings.



You'll have to excuse all the waffle here, but I'm not the only person today who is absolutely raging. This is a life changing decision for me that Betfair have made today, and has me seriously looking at a career change three weeks from now. I am going to initially attempt to use Betdaq to do pretty much what I do now, but Betdaq are massively inferior to Betfair in so many ways and offer nowhere near the same amount of markets and very little in-play. The amounts of money being traded on most things is massively lower than Betfair, although liquidity in certain markets has massively improved over the past year or so. No bookmakers will take any bets from me, no matter which of my many identities I use, so betting with traditional bookmakers simply isn't an option. Betfair have taken this decision to screw some of their more successful customers because their share price has fallen by 50% since they floated. The chief executive announced he was quitting yesterday, although he is likely being forced out by investors very unhappy with the way the shares have performed. Put simply, Betfair need to generate more revenue and they have decided that this is the best way to do it. I was only saying to some a couple of weeks ago that I was expecting Betfair to increase their charges this summer due to the way the shares were performing. I thought they'd do the Premium Charge first as increasing the base commission rate would probably generate more of a stir. I didn't anticipate the massive hikes that they announced today, it is astonishing that they have decided to do this. I assume they'd maybe increase the charge from 20% to 25% or increase the commission generate threshold in the same way. Instead it's more than doubled.

It won't stop there either. The base commission I would imagine won't remain at 5% indefinitely. They'll be looking for ways to squeeze more money out of people that way too. Betfair used to advertise using the slogan "Winners Welcome". Now, they are just as bad as any bookmaker who won't take any bets. The only people Betfair wants are losers and possibly those who break even. If you win and have the cheek to actually win and take money from the exchange, Betfair will be taking a large slice of that money first. I wouldn't be surprised if Betfair start seeding their own markets to make up for all the market makers and layers who will now go elsewhere.


Final point is that many people reading what I've just written are probably thinking serves you right, I don't care, it won't affect me, or things to that effect (and worse!). I'm well aware that probably no one else here is likely to be affected by the Premium Charge. However from July 18th, if you actually bet on slightly more obscure markets at Betfair, such as perhaps correct score in football outside the Premier League, American Sports, golf (apart from outright winner markets), Scottish football and so on, then don't be surprised if when you go to place a bet, all you are confronted with is a near blank screen with virtually no money in the markets at all, or at least nothing at any sensible price. It's difficult to predict exactly what will happen, but if Betdaq or anyone else get their act together and offer a credible alternative, then Betfair have just signed their own death warrant with what they've done today.

All would be rosy if I could just become friendly with Paul Merson and persuade him to let me use his Betfair account.....

I feel your pain, I would think shares in Betdaq or a n other would be worth a wee punt for the near future.

[mid-table]

blue4578, on 28 June 2011 - 22:20, said:

A long post.

It does seem somewhat naive of Betfair to screw their most successful, and generally highest turnover, customers.
They seem to have forgotten that it is an exchange, and if the winning punters all leave then the losing punters won't have anyone to bet against, in very simplistic terms.
It was a mutually beneficial relationship, betfair need winning punters, winning punters need betfair. One without the other isn't going to work unless, as you suggested, they just become like any other bookmaker rather than an exchange.

[blue4578]

When the Premium Charge was introduced, ultimately everyone is selfish and naturally no one likes paying more money for anything so people were up in arms and many people said they were going to leave Betfair and go and join Betdaq. They mostly didn't. Betdaq's liquidity has improved over the past couple of years, and apparently horse racing is not far behind Betfair now, and Premiership football isn't too bad. The problem with Betdaq is that they offer very little in-play, their platform isn't that stable, the API doesn't work that great, and they don't offer additional markets on a lot of sports that Betfair do (for example frame betting on snooker, game betting in tennis, and all the additional football markets beyond the traditional four or five main ones).

I am not as badly affected as some other people who make their living for example on more obscure sports, or in-running on any sport. Therefore for example, I can do my American sports betting at Matchbook (a very good but basic exchange specialising in North American sports), I can probably get some money matched at Betdaq on football. My tennis betting is going to suffer though. I stuck £20,000 on Andy Murray to beat Richard Gasquet yesterday, the same on Djokovic and Azarenka too. There are just no options to do that anywhere else, possibly the high street if I spread the stake around and am lucky enough that they'll take it all, but what if I want the bet on last minute? Or what if I want to change my position mid-match? Do I really want to be running round loads of betting shops trying to get loads of cash staked? Not if I can help it as the whole process is extremely stressful and time consuming. Tennis pre-match or in-running at Betdaq has little liquidity for all but a handful of matches each year.

Betdaq have a tremendous opoortunity now. They had an advertising campaign when the Premium Charge was originally introduced, calling Betfair "Bet-unfair" and offering anyone with 100,000 Betfair points 1% commission for the rest of the year. That was an excellent offer, just like their current 2.5% commission offer until the end of June. People don't just want reduced commission offers though. They need to improve their site, they need to offer more markets, they need to manage their markets better. Three weeks from now, there are going to be many serious gamblers looking for somewhere to place their bets, and Betdaq will never have a better opportunity to take a large chunk of Betfair's business. And of course it's like a snowball effect; if you suddenly have a lot more liquidity at Betdaq, it makes it more attractive for everyone to bet there and they could grow their business substantially. The average punter won't even take any notice of the announcement today, but the key moment will come if overall liquidity on Betfair suffers. It is going to be very interesting to see if this ends up being the case.

Betfair, from what I have heard, plan to start extensively seeding their own markets. To do this, they'll probably bring in third party market makers who will pay no commission or Premium Charge, with Betfair taking a large chunk of the profit made. They already do this on a lot of markets, and have obviously decided that they can force out a lot of their most successful customers and replace them in this way. This key point is that Betfair want to effectively become a bookmaker where only losing customers are welcome. Sound familiar? They are already doing similar things by massively expanding the games of chance they offer.

I am absolutely raging today though. This could have devastating consequences for what I do. Everything has changed overnight and there's nothing I can do about it. I have been a Betfair customer almost from the start (10 years) and have paid them a huge sum in commission over that time. I don't make obscene sums compared to the commission I generate. I have generate commission of about 35% of what I have won, although the calculation is seriously flawed anyway as it doesn't properly take into account commission you have generated via losing bets. I market make on more obscure sports like baseball so liquidity on those sports has been massively more than it would've been if I hadn't bothered. Yet still they want me out. It's quite possible that in a couple of months I decide that it's no longer practical to gamble for a living and go and do something else. Time will tell.

[ayrmad]

blue4578, on 29 June 2011 - 00:00, said:

When the Premium Charge was introduced, ultimately everyone is selfish and naturally no one likes paying more money for anything so people were up in arms and many people said they were going to leave Betfair and go and join Betdaq. They mostly didn't. Betdaq's liquidity has improved over the past couple of years, and apparently horse racing is not far behind Betfair now, and Premiership football isn't too bad. The problem with Betdaq is that they offer very little in-play, their platform isn't that stable, the API doesn't work that great, and they don't offer additional markets on a lot of sports that Betfair do (for example frame betting on snooker, game betting in tennis, and all the additional football markets beyond the traditional four or five main ones).

I am not as badly affected as some other people who make their living for example on more obscure sports, or in-running on any sport. Therefore for example, I can do my American sports betting at Matchbook (a very good but basic exchange specialising in North American sports), I can probably get some money matched at Betdaq on football. My tennis betting is going to suffer though. I stuck £20,000 on Andy Murray to beat Richard Gasquet yesterday, the same on Djokovic and Azarenka too. There are just no options to do that anywhere else, possibly the high street if I spread the stake around and am lucky enough that they'll take it all, but what if I want the bet on last minute? Or what if I want to change my position mid-match? Do I really want to be running round loads of betting shops trying to get loads of cash staked? Not if I can help it as the whole process is extremely stressful and time consuming. Tennis pre-match or in-running at Betdaq has little liquidity for all but a handful of matches each year.

Betdaq have a tremendous opoortunity now. They had an advertising campaign when the Premium Charge was originally introduced, calling Betfair "Bet-unfair" and offering anyone with 100,000 Betfair points 1% commission for the rest of the year. That was an excellent offer, just like their current 2.5% commission offer until the end of June. People don't just want reduced commission offers though. They need to improve their site, they need to offer more markets, they need to manage their markets better. Three weeks from now, there are going to be many serious gamblers looking for somewhere to place their bets, and Betdaq will never have a better opportunity to take a large chunk of Betfair's business. And of course it's like a snowball effect; if you suddenly have a lot more liquidity at Betdaq, it makes it more attractive for everyone to bet there and they could grow their business substantially. The average punter won't even take any notice of the announcement today, but the key moment will come if overall liquidity on Betfair suffers. It is going to be very interesting to see if this ends up being the case.

Betfair, from what I have heard, plan to start extensively seeding their own markets. To do this, they'll probably bring in third party market makers who will pay no commission or Premium Charge, with Betfair taking a large chunk of the profit made. They already do this on a lot of markets, and have obviously decided that they can force out a lot of their most successful customers and replace them in this way. This key point is that Betfair want to effectively become a bookmaker where only losing customers are welcome. Sound familiar? They are already doing similar things by massively expanding the games of chance they offer.

I am absolutely raging today though. This could have devastating consequences for what I do. Everything has changed overnight and there's nothing I can do about it. I have been a Betfair customer almost from the start (10 years) and have paid them a huge sum in commission over that time. I don't make obscene sums compared to the commission I generate. I have generate commission of about 35% of what I have won, although the calculation is seriously flawed anyway as it doesn't properly take into account commission you have generated via losing bets. I market make on more obscure sports like baseball so liquidity on those sports has been massively more than it would've been if I hadn't bothered. Yet still they want me out. It's quite possible that in a couple of months I decide that it's no longer practical to gamble for a living and go and do something else. Time will tell.

I think you'll find that difficult as most of your time must be spend pouring over form and pricing up markets, it was the cynical nature of Ladbrokes etc that made me see the light, they're only interested in mug punters and ESPECIALLY cumpulsive gamblers, it's quite sad that Betfair appear to be following suit as they offered Joe Punter the chance of some value where previously there was very little, I remember Ladbrokes rejecting £300 on an 11/10 shot many years ago, quite ridiculous considering overound and 9 or 10p in the £ tax at the time.

Might need to look at different markets on other platforms but I'm quite sure you'll find a way of continuing.

This post has been edited by ayrmad: 29 June 2011 - 00:36

[blue4578]

I have a few other options of things I could do if it came to it, the idea of doing something else certainly isn't out of the question. However I do enjoy my lifestyle and really don't ever fancy the idea of working for someone else. It's just a case of seeing how it plays out after July 18th.

My final word on the Betfair "tax" and what makes it even more unfair. Let's say that one week I do pretty well and win £10,000 at Betfair. They will say thank you very much and help themselves to £6,000 of that under the new system. Then the next week I don't do so well and lose £10,000 at Betfair. In betting terms over two weeks I've broken even. However when I lose they don't refund 60% of my losses, it's all very much week to week, even though the fact that you're paying the Premium Charge at all is based on the lifetime of your account. So over this two week period I would be £6,000 down even though I'd broken even. How is this fair? It would be even worse if you'd arbed or hedged using Betfair and won money there, as you'd have corresponding losses elsewhere so you'd be even worse off (as I described with the Chelsea example above).

For a year after July 18th, I could lose £10,000 one week and win £10,000 the next week, and have it alternating each week like that for a year. I almost certainly wouldn't pay enough commission to escape the tax by getting my percentage of commission generated to 40%, so I'll have paid 26 x £6,000 in Premium Charge = £156,000 over the course of the year even though my earnings from gambling were zero. Therefore I'm actually £156,000 down even though I've actually done not too badly to break even. That sort of thing can easily happen, not as symmetric as that obviously, but along those lines. You have ups and downs over the course of a year, some weeks you lose, some weeks you win. This means you get screwed even more. If you actually did break even every single week, even though this is exactly the same, you'd be £156,000 better off. If they had any sense, they'd apply the tax over a whole year, and not week to week. This would of course earn them less money so that'll never happen. The Premium Charge already apparently makes Betfair £10m per year. If people don't leave, it will probably make them £100m per year at least using the revised criteria.

This is a bad analogy, but imagine doing a "proper job" where you're in the 2%-5% income tax band. Then one day the government decide to introduce a new 20% income tax band, but you're quite relieved as you're nowhere near having to pay this higher tax rate, you're just above half way to having to pay it. Then suddenly one day the government decides to introduce a new 62%-65% income tax rate, for which you're liable as you're quite a way inside the threshold. That's basically what's happened to me now. If that happened in real life, there would be mass migration with the ports and airports clogged with people. Sadly there isn't at the moment a really suitable betting exchange to migrate to.


Anyway, rant over. I'm not expecting or wanting sympathy, which is probably just as well. I was merely having a good old rant and letting people know the reason in advance if Betfair's liquidity suddenly dries up in a few weeks.

[Nightmare]

This is ridiculous. Are they actually trying to drive away the customers who make them the most money, or are they just hoping that with no feasible alternative out there, that people like yourself will just stick it out and take the hit to their income? Seems like a risky strategy, if the latter.

[fanny paddery]

blue4578, on 29 June 2011 - 00:00, said:

That was an excellent offer, just like their current 2.5% commission offer until the end of June. People don't just want reduced

This had now been extended until the end of September.

[thepaisleypanda]

blue4578, on 29 June 2011 - 00:00, said:

I am absolutely raging today though. This could have devastating consequences for what I do. Everything has changed overnight and there's nothing I can do about it. I have been a Betfair customer almost from the start (10 years) and have paid them a huge sum in commission over that time. I don't make obscene sums compared to the commission I generate. I have generate commission of about 35% of what I have won, although the calculation is seriously flawed anyway as it doesn't properly take into account commission you have generated via losing bets. I market make on more obscure sports like baseball so liquidity on those sports has been massively more than it would've been if I hadn't bothered. Yet still they want me out. It's quite possible that in a couple of months I decide that it's no longer practical to gamble for a living and go and do something else. Time will tell.

That's the bit I can't fathom. Unlike a high street bookie, you are not taking profit out of their coffers with a large win. If you win you pay a commission. If you lose then someone else has won your money, not a bookmaker, thus THEY are paying the commission. It's win win for Betfair either way.

This seems daft as their objective should be to try and maximise turnover not force others elsewhere
, as they don't pay winners out of their profits unlike Hills etc.

[ayrmad]

thepaisleypanda, on 29 June 2011 - 09:32, said:

That's the bit I can't fathom. Unlike a high street bookie, you are not taking profit out of their coffers with a large win. If you win you pay a commission. If you lose then someone else has won your money, not a bookmaker, thus THEY are paying the commission. It's win win for Betfair either way.

This seems daft as their objective should be to try and maximise turnover not force others elsewhere
, as they don't pay winners out of their profits unlike Hills etc.

This has nothing to do with who wins/loses what, it's just a company now at the mercy of shareholders and looking for any angle to make money for shareholders, this method appears like one devised to create the least noise from Betfair users.

There are lots of people on Betfair using bots to make lots of money through laying, arbing etc and Betfair appear to be pushing them out to make that cash for there shareholders, the only thing that will negatively affect Betfair will be lack of liquidity ie. a very weak market leading to punters struggling to get bets placed at their perceived value(having to take 5/4 instead of 6/4 on a football team or similar..

I'm sure Dave or MT will explain it better but that appears to be whats happening from an outsiders viewpoint.

Don't know how I managed to get Dave from Blue.

This post has been edited by ayrmad: 29 June 2011 - 12:25

[blue4578]

Nightmare, on 29 June 2011 - 04:16, said:

This is ridiculous. Are they actually trying to drive away the customers who make them the most money, or are they just hoping that with no feasible alternative out there, that people like yourself will just stick it out and take the hit to their income? Seems like a risky strategy, if the latter.

Their argument for introducing the Premium Charge originally was that it costs them approximately £100-£150 for each new customer they attract, through free bet incentives and advertising. Therefore, if someone is winning hundreds of thousands or even millions per year, they are taking too much money out of the exchange, and it is costing Betfair a lot of money to replace losing customers, therefore the big winners have to pay for this. Looking at it now, with a 20% commission generated threshold and a 20% tax, this almost seems reasonable compared to what was announced yesterday!!

fanny paddery, on 29 June 2011 - 07:53, said:

This had now been extended until the end of September.

This is excellent, and they give you even better offers if you ask, but what they need to do is improve their service. Betdaq right now need to take a gamble. They need to invest a lot of money now in more/better staff and a much better website, because in three weeks there'll be a lot of potential huge customers there for the taking for them. It's just like if Tesco suddenly announced that they were tripling all of their prices in three weeks; you'd expect all of the other supermarkets to make sure that can handle the extra demand that would inevitably come their way.

thepaisleypanda, on 29 June 2011 - 09:32, said:

That's the bit I can't fathom. Unlike a high street bookie, you are not taking profit out of their coffers with a large win. If you win you pay a commission. If you lose then someone else has won your money, not a bookmaker, thus THEY are paying the commission. It's win win for Betfair either way.

This seems daft as their objective should be to try and maximise turnover not force others elsewhere
, as they don't pay winners out of their profits unlike Hills etc.

See above. Some people are just winning too much for their liking. The previous Premium Charge mainly only got the people who never lost in the many markets, it was aimed mainly at sophisticated in-running traders and people running bots across lots of markets that had a small edge or people scalping prices. Now however it's going to get anyone who has been consistently successful over a period of time.

ayrmad, on 29 June 2011 - 10:41, said:

This has nothing to do with who wins/loses what, it's just a company now at the mercy of shareholders and looking for any angle to make money for shareholders, this method appears like one devised to create the least noise from Betfair users.

That's pretty much the situation. Betfair floated in October 2010. The share price has halved since then. They need to make more money quickly and have decided that this is the least bad way to do it.

[Lazer]

So once you reach £250k in profits over the life span of your account you must have paid £100k in Commission or else you'll be liable to pay 40% on all future winning profits?

Where does the 60% commission from your profit come in? Would I be correct in assuming that you'd have to be paying between 40%-60% commission i.e. between £100k and £150k after your account has reached £250k, where as if you had contributed in excess of 150k you will have already satisfied their criteria and would not pay this rate until your winnings/commission ratio is 61/39?



Not That it affects me (hopefully one day it might ) but the markets being less liquid certainly will!

[blue4578]

It's commission generated, not commission paid. They have a calculation that is weighted in their favour for this; they basically divide what should be the commission generated by two.

If you have won £250,000, you have to have generated £100,000 in commission or be liable for the extra charge. I've no idea how long the £250,000 threshold will last, they might even remove that to catch more people. It's ludicrous really, why should the amount I've won in the past (over 10 years) matter when it comes to how much I may or may not be taking out of the exchange currently? Having this £250,000 minimum amount is just wrong. If you're below £250,000 you're still liable for the Premium Charge in the old form, ie you have to have generated 20% or you'll pay a 20% charge. So if you've only been with Betfair a short time and not had time to win it's much harder to hit you with the charge since the commission generated has to be below 20%, and if you are liabile for the charge it's half or a third of what some people who have won more, and perhaps been an account holder much longer, have to pay. So if you've been a loyal customer for 10 years, been steadily winning but paying loads of commission over time, you get hit with the highest charge. If you're a fairly new customer who may be winning at a faster rate, paying less commission, and taking more out of the exchange, you don't pay any Premium Charge at all.

eg. If you're £1 million up, and have generated £350,000 commission (35%), perhaps over 10 years, they can take 60% of your winnings
If you're £200,000 up, and have generated £40,000 commission (20%), they take none of your wininngs. Fair?

I'm still waiting to have conversations with my account manager about how they decide whether you're paying a 40% charge, a 60% charge, or anywhere inbetween. They haven't made it obvious how this is decided, and I have been waiting for my account manager to call me since yesterday regarding this. No doubt he will have dozens of extremely irate people to deal with at the moment, and since I haven't pressed the issue with him yet, contacting me is down his list of priorities.

[a_n_d_o]

So is this to save the share price? Sounds like quite a gamble, its entire business model revolves around being popular and was probably floated near the peak of its potential. Its obviously profitable but must have been way overvalued, as are most online companies when they are put on the market. Still its a bit ironic that they are trying to help those who lost in the Betfair shares gamble by taking it from those who successfully use the product, and could backfire.

On the other hand if they take more money from the big winners does that mean more free bets for the rare user like me?

[blue4578]

I doubt it, the policy now is to squeeze as much as possible out of everyone. I don't think it'll be that long before they increase the base commission from 5% to 6% as well. If things carry on as they are, Betfair may not even exist at all in a few years.

[watp1873]

Sounds like u need to quit while your ahead