Betfair Premium Charges Unplugged

[jfc]

Guess it's up to me to dedicate a thread to this immensely important development which threatens all honest, informed and responsible punters.

First, let's get the official quote correct.

Betfair claims this new premium charge affects:

"less than 0.5% of active customers"

Now what is an active customer?

From Betfair's material we can infer that any customer who places at least 1 bet in a particular week is considered an active customer for that week.

So someone who simply has 1 minimum bet a week on the West Coast Eagles (say) would be counted.

when I google news for "Betfair" I get 2,366 matches.

Trouble is that 797 of those matches happen also have "cashback" in the text.

Clearly there is a massive industry promoting a free money scenario at Betfair based on one bet per week.

So you have the opportunity for individuals to open accounts in as many names as they can muster merely to bonus binge. Then withdraw money from their account.

Can these people really be considered active customers?

[Moderator 3]

Now what is an active customer?

From Betfair's material we can infer that any customer who places at least 1 bet in a particular week is considered an active customer for that week.

You have inferred this. Moderators do not have time to be running back and forth to Betfair's site to see that fair comment has been made. Please substantiate your comment and provide the quote from Betfair that supports this.

Moderator 3.

[jfc]

You have inferred this. Moderators do not have time to be running back and forth to Betfair's site to see that fair comment has been made. Please substantiate your comment and provide the quote from Betfair that supports this.

Moderator 3.

"At the other end of the scale if we look at just a week then clearly the number of customers who’ve placed a bet will be less, but then so will the number of those who would be affected by the charge in the period, and the proportion is still about 0.5%. Any customer who doesn’t bet with us during a period isn’t included in the active number."

http://site.forum.betfair.com/jive3/betex/ForumsFrameset.jsp?forumID=95&forumName=Forum+Chat+&schatname=

[jfc]

As we can see Betfair avoided defining an active customer until pressed. Then it responded in a roundabout fashion.

The criterion of at least one bet that week, is hardly what reasonable people would consider active.

It includes freeloaders, once-a-year'ers and many others whose turnover is so inconsequential that they are a loss-making segment for Betfair.

If instead Betfair had chosen a more meaningful group say "regulars" with a disclosed criteria of say 100 markets a month, then we would be in a position analyse Betfair's claims.

But obviously that sensible move would result in a figure far in excess of that 0.5%.

That figure of 0.5% received a thorough caning on the Betfair forum, since a very high percentage of posters found themselves affected.

And common sense suggests that Betfair would not bother tackling such a minor percentage - unless of course there was some far more significant statistic it was not disclosing.

Yet for some reason we find people actually going in to bat for Betfair, quoting that questionable statistic as if actually signified something.

[Chrome Prince]

As we can see Betfair avoided defining an active customer until pressed. Then it responded in a roundabout fashion.

The criterion of at least one bet that week, is hardly what reasonable people would consider active.

It includes freeloaders, once-a-year'ers and many others whose turnover is so inconsequential that they are a loss-making segment for Betfair.

If instead Betfair had chosen a more meaningful group say "regulars" with a disclosed criteria of say 100 markets a month, then we would be in a position analyse Betfair's claims.

You are arguing against yourself here, the figure also includes the traders, the arbers, the punters who bet every race every day. It also includes the bookies laying off huge amounts on the exchange.

But obviously that sensible move would result in a figure far in excess of that 0.5%.

Clearly there is some degree of misinterpretation here. The 0.5% figure relates to people affected, the rest actually pay no premium charge because they already have paid their share of commission. Many quite large investors on various forums have queried their account statements and done a premium charge reconciliation, finding they are not affected at all. Possibly in the future they may be affected, but this would be a one-off circumstance.

That figure of 0.5% received a thorough caning on the Betfair forum, since a very high percentage of posters found themselves affected.

a very high percentage of posters claimed to find themselves affected, a very different thing.
They are scared that they will pay in the future. The number of posters claiming to be affected does not tally with all analysis of winning customers.
It is clear that people are inflating their own capabilities to mount an effective argument.

Yet for some reason we find people actually going in to bat for Betfair

It's not a matter of going into bat for Betfair, it's a matter of getting some accuracy.
Betfair did not cause a mass exodus from the markets, punters overreacting caused it. The whole announcement has caused confusion and controversy because they did a very poor job of explaining it fully.
I will be affected because I don't pay commission unless I win on a market, therefore I don't currently pay as much commission as a punter.
However, I'm far from throwing in the towel to another exchange which has it's own problems.
There are ways to get around things, almost always.

[crash]

I find it mind boggling that Betfair seems to be up to their armpits in ambiguous rules, or am I wrong?

[jfc]

Mainstream long-term winners don't win every week.

The charges don't immediately apply in losing weeks, which is of little consolation, because even if Betfair garnishes you only 1 week in 10, it can slug you for up to 20-something% of all your profits for the past 60 weeks. So it will get you in the end.

Say that affected customers average 50% winning weeks.

If the 1st week reels in 1,000 the 2nd would also get ~1,000. But in week 2, 50% of the previous customers would lose and get a temporary reprieve, and 50% that lost last week would now win and get slugged.

So you would expected the cumulative affected customers in successive weeks to be:

1,000
1,500
1,750
1,875

until eventually 2,000 is reached.


But Betfair is claiming that its 0.5% figure is constant irrespective of how big the sample period is.

Considering my example above, that constant 0.5% claim is staggering.

If that claim is actually true then Betfair has withheld some other important relevant statistics from us.

[Chrome Prince]

There is no cumulative figure.

The Premium Charge only affects customers who are in profit over a 60 week period and have not paid full commission on winnings and is calculated weekly.
If you are losing other weeks, you are already paying enough commission.
This is why only .5% of customers are affected.
There is so much misinformation being bandied about, it's done Betfair more harm than the actual charging process.
I do find it unbelievable that Betfair have done very little to correct or explain the situation fully, and remarkably stupid that any client cannot have instant access to the 60 week report.

[Mark]

Chrome, have you received the email............and even worse, the dreaded phone call??

[Chrome Prince]

Yes I have, I cannot risk the multiple account thingamy - they know and are watching for this I was told :(

[jfc]

Now consider the effect of that ~$2,222 initial charge allowance.

The very convenient consequence for Betfair is that it conveniently allows it to understate the true % of customers affected by the charges.

Without that allowance there could easily be say 10 times the number affected.

But as that allowance is only a once only offer, more customers will blow it forever week after week and the % affected will soar and soar.

One more reason to question Betfair's claim of how few will be affected.

[The Elk]

Hi, this is my first post on this forum so am prepared for all the flack that may fly my way :D

Each customer will also have an allowance in each 60 week period of £1,000 against the Premium Charge. This means that every customer considered for the Premium Charge will be exempted from the first £1,000 of the charge in each 60 week period. I get the impression from JFC's comments that the $2,200 allowance is a one off and reduces if any is used, my interpretation is that it is for "each 60 week period"

i.e Period 1-60 week, next week it would apply to week 2-61...etc

[Michal]

Hi Chrome,

You seam to have some grasp on the subject. What do you mean have not payed full commision? How can you not pay a commision when you win? Or is it that they give you a 3% discount for large volume and then take 20% of your profit ??? I really strugle to understand how someone could not pay commision, and what is the level of commision that is right? I thought it was 5 to 2% ???

Michal

[The Elk]

This wouldn't all fit on the one post so did 2

These are for the past 12 weeks and profits for $1: (my 12 weeks have been good)

Bets...459
Wins...130 (S/R 28.3%)
Place..326 (S/R 71%)
Gross Profit Win......$82 (17.8%) before 5% commission
Losing win bets.......459-130=329

Gross Profit Place....$110 (24%) before 5% commission
Losing Place bets.......459-326=133

Extrapolate these figures out to 60 weeks (BetFair period)
Bets...2,295
Wins...650 (S/R 28.3%)
Place..1,630 (S/R 71%)
Gross Profit Win......$410 (17.8%) before 5% commission
Losing win bets.......1,645
Gross Profit Place....$550 (24%) before 5% commission
Losing Place bets.......665

I then calculated the Premium charge in 2 separate types Win & Place bets to see how each affected me:

BFPC - Win only
20% of $410 = $82 (this is the figure I need to be greater than so that I do not qualify for BFPC calculations)
Actual commission on win collects (410+1645)*0.05 = $102.75
Implied commission on losing win bets 1645*0.05 = $82.25
BFPC calculation (102.75+82.25)/2 = $92

My BFPC ($92) is greater than 20% of gross profits ($82), hence no BFPC no matter what my bet size is


BFPC - Place only
20% of $550 = $110
Actual commission on place collects (550+665)*0.05 = $60.75
Implied commission on losing place bets 665*0.05 = $33.25
BFPC calculation (60.75+33.25)/2 = $47

My BFPC assessed figure for $1 on place only is 110-47 = $63

Using $20 bets
63 * 20 = $1,260

$35 place bets
63 * 35 = $2,205 (takes care of the 60 week allowance allocated for EACH 60 week period)

By betting win & place the bet could be increased over $40 before I would expect to donate to BFPC using the above figures
What would $40 Place only mean:
$550 * 40 = $27,500 less $2,430 (commission on place collects) = $25,070

If this became a problem for me, I have several choices:
a) move from Betfair
b) keep my bet sizes below $40 (happily doing that now)
c) Win only or each way betting
d) plan more holidays ( loving wife has put a big tick next to this one)
e) pay the BFPC


All that is needed is a bit of thought - apply some common dog-@#$% - do some simple calculations.
Basically the figures show thatwith a normal 10% POT then there is no worries about BFPC,
where the S/R is high and POT is over 20%, it then boils down to the bet size

How many do over 2,000 bets/year and average over 20% POT - according to BetFair, only 0.5% of their customers
I have no reason to disbelieve this figure.

[jfc]

Hi, this is my first post on this forum so am prepared for all the flack that may fly my way :D

I get the impression from JFC's comments that the $2,200 allowance is a one off and reduces if any is used, my interpretation is that it is for "each 60 week period"

i.e Period 1-60 week, next week it would apply to week 2-61...etc

Very interesting user name.

Now, having dredged through that material I am so confused that I am prepared to concede that you may be correct about the allowance applying to a rolling 60 week window, instead of only applying initially.

So presumably after 60 weeks are up, for every subsequent week Betfair credits your allowance by ~$37 = (2222/60).

Pity Betfair didn't bother spelling that out to eliminate confusion.

Anyway imagine those who manage to stay completely within the allowance by averaging pre-allowance charges of $37 per week.

From week 61 that changes.

If 50% stay below $37 then they escape charges.

But the other 50% who exceed $37 will get charged!

In essence anyone slightly below the allowance should now start getting charged upon encountering an above-average run.

So the proportion of affected customers will increase.

An important fact that Betfair has failed to disclose.

[The Elk]

So presumably after 60 weeks are up, for every subsequent week Betfair credits your allowance by ~$37 = (2222/60). That is not the way I interpret it - whatever your figure was for Week 1 would be added to the amount and Week 61 would be deducted - not necessarily $37

BF will be advising of our actual Premium Charge status so that we all will know where we stand on a weekly basis...and if in the event that a person does pay a fee, this is also taken into account when calculating future Premium Charges

I really can't see how it will affect the majority of the punters

The username was a nickname give back to me in my footy playing days :D

[jfc]

Post deleted.

Generalised allegations such as "X did not properly disclose its fees to me and caused me distress" etc. are not appropriate in this place.

Our standard response to these types of posts is to see Consumer Affairs, see a lawyer etc. if there is any substance to the allegations.

From the Forum Terms of Use:

The following types of postings are not acceptable.

Potentially defamatory or libellous. This especially relates to the identifying of businesses, racing products, racing personalities or other individuals in a context that could harm reputations, even if justified.

Moderator.

[Chrome Prince]

Hi Chrome,

You seam to have some grasp on the subject. What do you mean have not payed full commision? How can you not pay a commision when you win? Or is it that they give you a 3% discount for large volume and then take 20% of your profit ??? I really strugle to understand how someone could not pay commision, and what is the level of commision that is right? I thought it was 5 to 2% ???

Michal

Michal it gets extremely confusing for everyone actually, including Betfair - even they can't explain it, so how do they expect their members to understand it?

What I mean by full commission is not the commission rate, nor the actual dollars paid at the end, I mean something a bit different.

Punters pay commission on losing winning bets, traders do not.

Yeah it sounds weird but I'll try and explain it as I understand it.

Punter A has 100 bets of $100, turning over $10,000
He makes $2,000 profit.
He does not pay 5% commission on just the $2,000 he won, he pays commission on every individual winning bet along the way.
He might have a lot of winning bets, but still only win $2,000.
So he's paid probably $200 in commission at the very least.

Trader B has 100 trades of $100, turning over $10,000
He makes $2,000 profit
He pays commission on his winning trades only, so probably $100 in commission because almost all his trades are winning trades, but small dribbles of profit every trade (nearly).

The punter has paid "full" commission, the trader will probably pay half commission plus a very fat premium charge now.

I hope I explained it enough, it's hard to put into words, but they have everyone running for cover, and most are not even hunted.

[Crackone]

What I mean by full commission is not the commission rate, nor the actual dollars paid at the end, I mean something a bit different.

Punters pay commission on losing winning bets, traders do not.

Yeah it sounds weird but I'll try and explain it as I understand it.

Punter A has 100 bets of $100, turning over $10,000
He makes $2,000 profit.
He does not pay 5% commission on just the $2,000 he won, he pays commission on every individual winning bet along the way.
He might have a lot of winning bets, but still only win $2,000.
So he's paid probably $200 in commission at the very least.

Trader B has 100 trades of $100, turning over $10,000
He makes $2,000 profit
He pays commission on his winning trades only, so probably $100 in commission because almost all his trades are winning trades, but small dribbles of profit every trade (nearly).

The punter has paid "full" commission, the trader will probably pay half commission plus a very fat premium charge now.

I hope I explained it enough, it's hard to put into words, but they have everyone running for cover, and most are not even hunted.Yep under stand that Chrome

Trader A would pay $600 (at 5%) commission he would have to win $12000 , all bets in different races.

Trader B has his bets in one race wins the same amount as trader A $2000 and only has to pay $100 commission

So what Betfair are saying is that Trader B isn't covering the cost that is incurred on Betfair for his 100 bets, this is why the new charge.

[Chrome Prince]

Yes, you put it better than I did Crackone.

It seems that something else has happened which has gone un noticed by everyone caught up with Premium Charges.....

Australians are now allowed to bet in running on international horseracing events.

They lifted the ban last night :D

Last night we lifted the restrictions on IP blocking that prevented customers in Australia from betting in-running online on horseracing events. Customers will now be free to bet on markets which offer this functionality i.e. UK horseracing.

[partypooper]

For an absolute LAYMANS view here it is: I always thought it was too good to be true (remember the old adage?) but it didn't affect me as WA was excluded so I couldn't indulge anyway.

They changed the rules ..... BUT:

Then the main thing was 1 & 1/2% deposit charge......... NO WAY!, I deposit EVERY DAY AND (USUALLY WITHDRAW EVERY DAY)

Now all this bulaaaa, I think I'll just stick to what I know, and steer clear of all the crap!!

[jfc]

If you are losing other weeks, you are already paying enough commission.

.

I am affected by the charges.

Yet I have had losing weeks in that period.

So how on earth can you justify your extraordinary modification to Betfair Premium Charges?

If losing weeks provided a loophole to escape the charges then imagine what would occur between colluding customers.

[jfc]

So what Betfair are saying is that Trader B isn't covering the cost that is incurred on Betfair for his 100 bets, this is why the new charge.



Actually Betfair are not saying anything remotely like your claim.

You apparently have missed the part where Betfair reveal what covering the cost really means.

Now if you study the situation there is no valid reason to suggest that Trader B costs Betfair more than Punter A.

Loser C who very rarely gets a bet matched but wastes tons of resources might actually cost much more.

[Michal]

Party,
That 1.5% is credit card only I used Bpay and never pay a cent. If I remember correctly NSW TAB charges 3% or was it $3 ? Either way its the method you choose you obviously need the instant funds so this isnt for you.

Chrome thatnks for trying to explain, as you said its hard because they are trying to plug something and the band-aid is not that good. Yes but generaly if you make a profit grinded out from POT then most likey you are ok. If you have a high strike rate or you trade your position then you are effected. I suppose people then need to make the choice if the betfair 'advantage' is worth it to them if they are punters or just cop it because they are traders and there is nowhere real to go.

Thanks

Michal

[Mark]

I won't pretend to understand how the new charges work, all I know is I will be affected. I have been with BF since they started betting on our races and have been happy to recommend them to all and sundry. But not any more. This is simply a money grabbing exercise that all monopolies succumb to. Why?, because they can. I have been told (over the phone) that I can always go elsewhere for my lay betting. This is their attitude. The other thing that really irks me is that people who place bets less than $6 are receiving emails threatening to close their accounts, however if the bets are placed via a bot, then that's ok. See the difference? They even advertise this fact on the BF site !!!

To the moderator, if you want proof of the threat I can send it through.

Party, why do you need to deposit every day ???

[jfc]

If this became a problem for me, I have several choices:
a) move from Betfair
b) keep my bet sizes below $40 (happily doing that now)
c) Win only or each way betting
d) plan more holidays ( loving wife has put a big tick next to this one)
e) pay the BFPC


All that is needed is a bit of thought - apply some common dog-@#$% - do some simple calculations.
Basically the figures show thatwith a normal 10% POT then there is no worries about BFPC,
where the S/R is high and POT is over 20%, it then boils down to the bet size

How many do over 2,000 bets/year and average over 20% POT - according to BetFair, only 0.5% of their customers
I have no reason to disbelieve this figure.


Elk,

if you spend some time watching how UK horse markets build up, then you should eventually realise that most long term Betfair winners bet in a different way than you do.

Essentially you are not availing yourself of all the best options in a market. Had you done so your 12 week streak would have reaped far bigger returns.

However since your figures are not representative of the aforementioned winners, your strategies and conclusions would not necessarily apply to them.

Personally, I comfortably play over 2,000 markets in far, far, far less than a year. And don't even bother trying to calculate POT, but would be surprised if it was over 1%.

Yet I am affected by the charges.

[AngryPixie]

Mark, I find the tone of the "marketing" equally as annoying as the charge. It has a real "these people are cheating all you battlers" feel to it. I've not been contacted about the charge. I suspect the backing side of my ledger pop's me over the threshold.

Elk, thanks for your example. What a shame Betfair couldn't have done the same thing.

[Chrome Prince]

I am affected by the charges.

Yet I have had losing weeks in that period.

So how on earth can you justify your extraordinary modification to Betfair Premium Charges?

If losing weeks provided a loophole to escape the charges then imagine what would occur between colluding customers.

jfc, it doesn't work on one or two losing bets or one or two marginally losing weeks, it isn't about the actual losing, it's about the ratio of profit to turnover.

Losing isn't a loophole, but the way in which you win is.

[Chrome Prince]

Actually Betfair are not saying anything remotely like your claim.

You apparently have missed the part where Betfair reveal what covering the cost really means.

Now if you study the situation there is no valid reason to suggest that Trader B costs Betfair more than Punter A.

Loser C who very rarely gets a bet matched but wastes tons of resources might actually cost much more.

I don't believe Betfair are telling us accurately the reasoning behind this, I don't believe that one customer costs Betfair more than another generally.
They are already set up, they already have their staff and software.
The previous costs have been offset by transaction charges (loads on their server and processing volumes of single bets from one customer etc).

The premium charge is just another area to raise revenue.

In fact it's quite ingenious when you think about it...possibly dastardly ;)

Losing customers are generally not affected, so keep betting.
Winning customers will keep betting because they are winning.

It's the traders, arbers and bookmaking punters who are the worst off.

They don't care if they lose these clients, because the premium charge from those that stay will more than make up for those who leave.

All that suffers is liquidity, but where short term people leave, there are replacements always waiting to have a crack at it.

A lot of people think that the droves leaving and decrease in liquidity will put Betfair out of business, in fact I think it will create more effective advertising than any planted garden or race sponsorship could do.

I can guarantee that this time next year, a lot of regular winners will have moved elsewhere or changed the way they do things, but that Betfair's liquidity will be better than ever.

[Crackone]

Actually Betfair are not saying anything remotely like your claim.

You apparently have missed the part where Betfair reveal what covering the cost really means.

Now if you study the situation there is no valid reason to suggest that Trader B costs Betfair more than Punter A.

Loser C who very rarely gets a bet matched but wastes tons of resources might actually cost much more.Quote from the link you posted in your first Post

"The Premium Charge will only apply to customers who pay us less in commission than it costs for us to service them. The reason they do is because a) many of them use the Betfair infrastructure extensively, or b) they drain liquidity from the exchange by withdrawing their winnings faster than new funds are added back by other existing or new Betfair customers, or c) both of the above. Overall, these customers are a cost to Betfair, which means ultimately that they are a cost to the entirety of our customer base."

Trader A and B cost the same, 100 bets each. Trader A pays $600 commission betfair happy. Trader B uses same amount of resources pays only $100 commission.

[jfc]

Quote from the link you posted in your first Post

"The Premium Charge will only apply to customers who pay us less in commission than it costs for us to service them. The reason they do is because a) many of them use the Betfair infrastructure extensively, or b) they drain liquidity from the exchange by withdrawing their winnings faster than new funds are added back by other existing or new Betfair customers, or c) both of the above. Overall, these customers are a cost to Betfair, which means ultimately that they are a cost to the entirety of our customer base."

Trader A and B cost the same, 100 bets each. Trader A pays $600 commission betfair happy. Trader B uses same amount of resources pays only $100 commission.

Firstly, that is not the full story from Betfair. Dig further and you'll find more.

Secondly, Betfair's claim here can easily be challenged.

I provide considerable liquidity and commission to Betfair.

My infrastructure consumption per market would be much lower than that of many losers. Particularly since I could not indulge in in-running markets.

And until now I rarely withdrew any funds.

So according to Betfair, the Premium Charge should not apply to me.

But it does in spades.

So how can Betfair's claim be correct?

[jfc]

Note also that it costs Betfair next to nothing to service me. I avoid having contact with it.

That is I never now contact its service segments or managers because I know how slim the chances are of getting anything rectified.

Yet I generate considerable commission for it.

So Betfair are way, way, way ahead in their servicing of me.

[Chrome Prince]

So how can Betfair's claim be correct?

It isn't a claim, it is an excuse by the sharp minds in Betfair Towers to generate revenue without actually increasing commission structure for losers who are attracted to better odds, so it will help with the price of the IPO.

Unfortunately, the finance team forgot to talk to the marketing team.

It's not a very good implementation, but the sharp minds at Betfair have outdone themselves with brilliance.

I don't support it in any way, and it will probably drive me away quite soon, but it is brilliant.

Hundreds of thousands of dollars pushed through the exchange on every UK race, yet effectively Betfair are making a flat 5%.

Now they'll be making a cumulative 5%.

The bottom line is enormous.

[jfc]

"The Premium Charge will only apply to customers who pay us less in commission than it costs for us to service them.



To save some time for all, here is Betfair's real reason:

Charming.

"Servicing customers also includes the cost of replacing liquidity that has been taken out by customers with an extremely high success rate. Unfortunately, the cost to acquire and retain new customers continues to increase and we want to ensure that the Betfair exchange continues to thrive by being vibrant and liquid."


Winners are blamed for losers disappearing! Why is it our fault?

If I knew whether I was matching a winner or a loser life would be so much easier. But I don't.

[AngryPixie]

I don't support it in any way, and it will probably drive me away quite soon, but it is brilliant.
But go where??? :( :(

[schonegg]

But go where??? http://www.propun.com.au/racing_forums/images/smilies/frown.gif http://www.propun.com.au/racing_forums/images/smilies/frown.gifDillema for most. Betdaq aren't in a rush on adding aussie races, and I thought Robert Nason was not surprisingly very disappointing on Racing Retro last Sunday. The question was asked 'would Tabcorp consider implementing a betting exchange'. It's not on the radar, as well as his head-in-the-sand comment about still having reservations of the 'integrity' of it all http://www.propun.com.au/racing_forums/images/smilies/rolleyes.gif

[Chrome Prince]

But go where??? :( :(

I'll probably have to go back to the bookies I think.
I'll also have to change my whole modus operandi.

But I won't be going to BDaq unless they can offer something apart from reduced commission that value adds to what I do now.

[partypooper]

Michaelg and Mark, I wish I could *scream* it from the rooftops,.../.. but I can't sorry; I just cant risk having the door SLAMMED shut, I'll just say that I fly FIRST CLASS, and stay in 5 star................ for free!

PS And I'm nowhere near as successful punter as many here!

[jfc]

Consider this gem from Betfair support (from the allowance thread at the Betfair forum).

"However, the 1000 allowance would have already come into play around 59 weeks ago."

Now if this is true, it means that many customers who were historically not affected by the charge, and have nearly used up their allowance will get charged on the 1st live week. All they need to get charged is an above average week.

So the proportion of affected customers will immediately grow.

I can hardly wait until tomorrow when customers' charges will be revealed, to find the furore from formerly unaffected customers now getting slugged.

[jfc]

A number of flaming comments. Post deleted. Moderator.

[Chrome Prince]

You are correct jfc, I had it just confirmed over the phone.

The $1,000 allowance is already used up and is a 60 week rolling allowance.

Riddle me this caped crusader.....

How can I use up something that never existed historically????

<font size=40>?</font>

This will do far more damage than the announcement of the introduction of the charge imho.

People will withdraw funds to avoid the first charge and then never redeposit because they'll be charged.

I want to know if Betfair are paying VAT on this....might be worth an overseas call to the Gambling Commission :D

[partypooper]

Sounds like BF were offering a "free lunch"? (after all)

[AngryPixie]

Would be interesting to get the Tasmanian Gaming Commissions or even the ACCC's perspective.

This reads to me as if the Tassie government would have to give permission, but I'm no lawyer.

76ZDD. Betting exchange commission

(1) A Tasmanian gaming licence with a betting exchange endorsement entitles its holder to such commission in respect of brokered wagering as the Commission from time to time authorises in writing.



(2) Authorisations under subsection (1) (http://www.thelaw.tas.gov.au/tocview/content.w3p;cond=;doc_id=94%2B%2B1993%2BGS76ZDD%2FGs1%2FEN%2B20060206000000;histon=;prompt=;rec=;term=#GS76ZDD@Gs1@EN) may be of –(a) general application; or


(b) specific application, with the result that different rates of commission may apply in such different circumstances (whether as to time, wagering category or otherwise) as are specified in the authorisations.

[AngryPixie]

Betfair claims this new premium charge affects:

"less than 0.5% of active customers"

Now what is an active customer?

JFC, bit of a blast from the past but it looks like under the terms of the Act an active player is one that has placed a bet witin the past 2 years.



76ZP. Remitting funds of inactive player

If no wager has been recorded on behalf of a registered player for a period of 2 years, the licensed provider – (a) must remit any funds held on behalf of the player; or

(b) if the person cannot be found, must deal with the funds as unclaimed moneys under the Unclaimed Moneys Act 1918 (http://www.thelaw.tas.gov.au/tocview/index.w3p;cond=;doc_id=13%2B%2B1918%2BGS1%2FEN%2B20060206000000;histon=;prompt=;rec=;term=).

[jfc]

(1) A Tasmanian gaming licence with a betting exchange endorsement entitles its holder to such commission in respect of brokered wagering as the Commission from time to time authorises in writing.



(b) specific application, with the result that different rates of commission may apply in such different circumstances (whether as to time, wagering category or otherwise) as are specified in the authorisations.




In the just concluded Waterhouse case, the judge spent a massive amount of resources to figure out what "publish" means.

Imagine the amount of legal resources required to determine whether a "charge" is a "commission".

[jfc]

JFC, bit of a blast from the past but it looks like under the terms of the Act an active player is one that has placed a bet witin the past 2 years.




So if I drop dead tonight, I'll still be considered an active player for another 729 days.

[AngryPixie]

Yes and you'll have to haunt them so they can find you, otherwise they'll keep it :)

[jfc]

Onto the fanciful notion that this charge is somehow good, because it will be easier to win once the big winners have moved elsewhere.

This flies in the face of well proven and documented strategy for such capers.

Considering this is a sub-zero sum game, a key strategy of the top echelon is to crush all potential competitors. Even if that involves sustaining short term losses.

While it makes dollar sense for these leviathans to transfer some action to BETDAQ, they have adequate resources to still be active on Betfair. And ensure that no one gets a leg up.

And if by some miracle the reduced leviathan action gives you a marginal advantage, rest assured the retrofitted Betfair Premium Charge will end up leaving you worse off than last week.

[Chrome Prince]

Considering this is a sub-zero sum game.

Actually, that is true.
It is a zero sum game if we didn't pay any commission, add on Premium Charges and transaction charges and bot tax and we have a very large minus game.

Pay only commission, and still it isn't a zero sum game!

[Michal]

One thing that most people miss that Betfair causes quite a large demage to profit even with the normal commision. The commision payed on every win has a snowball effect. The normal punter might take 20 wins to increase his bank by 10% those wins are charged a commision, however a loss isnt aforded a refund so the next win that actually only places you at the same level that you were before, has cost you 2 commisions, so you could be 10% better off in just 2 wins. This movement and constant commisons is what costs, and ensures that sucessfull a punter pays far more in excess of 20% in commision due to this.

A person that hardly loses does not reuse the funds, they move forward, tharefore they do not re-pay the commision. Well they do now, all being equall this is 'fair'. While 'fair', it ensures that no one esscapes the 20% tax on gross profit be it that you pay it in small amounts or large lump sum. What needs to be done is to have this factored into your betting strategy.

Will you still be better off ? Is the batfair advantage that great to offset the money grabed in exchange for the services provided? Diversification of betting accounts is probably the best policy. There will be people whose strategy requires laying a horse be it in trade or straight out . They have nowhere else to go. Those that bet straight out need to reases the situation.

Lets asume that we place $2 bets in TAB and BEtfair and we get $2 win divs every time (for ease of calculation)

Bet TAB Betfair
1 $2 $2 Win
2 $2 $2 Loss
3 $2 $2 Win
4 $2 $2 Loss
5 $2 $2 Win

Sumary, Each account has same risk that is 5 x $2 = 10
TAB account has a profit of 12 - 10 = $2
Betfair has 12-(6x0.05) -10 = $1.7 profit you are 15%
behind the TAB.

The more you use Betfair the greater is the gap that you need to fill I would suggest that the 20% is a nice round and realistic figgure. As long as you have a reasonable strike rate but your divs arent 20% greater then the next commision free betting facility, over all you are not going forward as fast as you would like or COULD.

There was an interview with a well known punter who said something to the effect that you cant beat the Betfair takout, he was, I realise more right ten I thought then.

I have been meaning to write this for some time but never quite found the right words and example, I hope that I have now. This isnt meant to be defamitory its meant to serve as a help in developing a better bet placing strategy I would say that if you arent getting 15% better you are infact loosing more then you realise.

Michal

[Chrome Prince]

Very well put Michal.
I saw that interview too and was wondering how he could make such claims.
All has been proven in the long run.

I now also understand why Australian liquidity will never even be close (by ratio of population) to that of the UK, and why arbing and trading is so attractive.

I haven't done the simulation myself, but I'd guess that the average punter is laying and backing horses at prices where he cannot win long term because of commission.

Traders and arbers could win if they were good enough, but now the only winner is Betfair.

They have effectively shut the door on an edge.

[jfc]

This drama shows little sign of subsiding.

Various players are now detailing their charges on the Betfair Forum, revealing the difference between Betfair's claims and reality.

How about this customer:

"I have just payed my first premium charge and after adding the commision I had payed during the week, the whole thing equates to 24.7% of my overall profit."

I've just wasted more time trying to figure out these charges, and have ended up more confused than ever.

[partypooper]

Hey Moderator, how are we going in the defamatory stakes on this topic???

[Mark]

I'd love to know who "the well known punter" was. What a silly statement, "you can't beat the BF takeout". Funny thing is I've had my best week in ages as the bots appeared to be asleep early on in the UK markets. Or have some moved on?, suits me fine if they have.

[Crackone]

I'd love to know who "the well known punter" was. What a silly statement, "you can't beat the BF takeout". Funny thing is I've had my best week in ages as the bots appeared to be asleep early on in the UK markets. Or have some moved on?, suits me fine if they have.I think it wasSean Bartholomew

[schonegg]

Post deleted. If you believe there is a "scandal" then alert the appropriate authorities. Do not make such accusations here. Moderator.

[Michal]

Crackone, thank you yes that was the guy.


Mark, good on you that you had a great week, what you are refering to is your ability to win, you may have had the best week, if you didnt have to pay the commision you would have had a better one.

I dont belive that the statment was silly, I certainly didnt understand it untill much later and for the most part I dont think that many have understood. HE wasent refering to the fact that you cant win money, he was refering to the fact that you cant beat the over all percentage against you , that you lose any benefit or edge. He was also talking about betting straight out not laying or trading .

Michal

[Mark]

Deleted. Potentially defamatory. Moderator.

[Chrome Prince]

I'd love to know who "the well known punter" was. What a silly statement, "you can't beat the BF takeout". Funny thing is I've had my best week in ages as the bots appeared to be asleep early on in the UK markets. Or have some moved on?, suits me fine if they have.

Mark, he meant the takeout from paying commission on all win bets, the winning ones as well as the losing ones.

One may have cumulatively won $20,000, but only cleared $2,000 in profit.
So based on 5% commission, paid $1,000 in commission.
That's 50% of the nett profit gone!

No punter can win paying 50% of winnings back to the provider.

Now as a trader, bookmaker or market maker, you might make $2,000 profit and this is cumulative.
You've effectively paid $100 in commission or a miserly ;) 5% to the provider.
Most certainly any successful market maker can win paying 5%.

That's the basic but mammoth difference.

SB combats this commission by arbing.

So SB is paying the same commission rates as you.

He was implying that unless he did it this way, it would be impossible to make a profit due to the cumulative effect of commission.

I think you may have had a good week and will have a good week next week also, because many players have shut down their autobots after being stung on Wednesday with their Premium Charge. I have also noticed the price chasers aren't there like before.

I have to wait another 3 hours and 20 minutes for my big race at Dundalk to go off. They should pay me a Premium Discount for providing liquidity when I should be asleep :D

[stebbo]

Mark, he meant the takeout from paying commission on all win bets, the winning ones as well as the losing ones.

One may have cumulatively won $20,000, but only cleared $2,000 in profit.
So based on 5% commission, paid $1,000 in commission.
That's 50% of the nett profit gone!

No punter can win paying 50% of winnings back to the provider.

I have heard this argument many times, and at one time (for a short period of time) actually thought this myself. However this is a very simplistic view of the situation. It is only the fact that the commission is paid post-collect that makes this argument appear to be valid, however it is not necessarily the case.

In the case you cite above, let's assume the punter in question has bet $18,000 and returned $20,000 for his $2,000 profit. If commission were factored into the dividend (as it is with bookies and the tote) then he would have bet $18,000 and returned $19,000 for a $1000 profit and he may consider himself to be a reasonable punter.

If we can agree that over a very large number of bets, the better dividends will be where the market takeout (including commission) is the lowest, then if that same punter had put that same $18,000 into the totes (if a horse racing punter) at 17% takeout, then the $18,000 bet would have only resulted in a return of something like $17,000 and they would be in a loss situation. Regardless of whether the $1,000 in commission is paid before or after the collect, $1,000 profit is still better than $1,000 loss.

If the punter in question was a sports punter, and were betting on a book with a percentage of around 8%, then the difference would not be so great, but would still be there. Regardless of whether the commission is paid before or after the fact, they would still be ahead by paying the 5% commission - as long as the dividends received were better at BF than elsewhere.

I am a punter and not a trader. By my calculations I don't pay any commission. My software displays the betfair dividend "post commission". I record all my bets with this post commission dividend. The commission is irrelevant to me. If I put a bet on at $2.00 (assuming a 5% commission), I consider this a dividend of $1.95. I only put this bet on if the $1.95 available is better than what I can get elsewhere. If I put $100 on that $2.00 shot, my profit is $95. The fact that they pay me $100 and then take back $5 is totally irrelevant and confuses the issue.

The above argument suggests that I've "lost more" by paying that extra $5 in commission. If the $1.95 was better than what I can get elsewhere then I'm far better off.

I suppose what I'm trying to say is that if that selection was a true 50% chance, then the 5% commission (net $1.95) is far LESS significant than a tote takeout of 17% which would show that selection at something like $1.85.

No punter can win paying 50% of winnings back to the provider.

They most certainly can.

[Chrome Prince]

I have heard this argument many times, and at one time (for a short period of time) actually thought this myself. However this is a very simplistic view of the situation. It is only the fact that the commission is paid post-collect that makes this argument appear to be valid, however it is not necessarily the case.

In the case you cite above, let's assume the punter in question has bet $18,000 and returned $20,000 for his $2,000 profit. If commission were factored into the dividend (as it is with bookies and the tote) then he would have bet $18,000 and returned $19,000 for a $1000 profit and he may consider himself to be a reasonable punter.

Not necessarily, the assumption is that he'd still be winning after commission were paid on every single winning bet, not just net profit.

If we can agree that over a very large number of bets, the better dividends will be where the market takeout (including commission) is the lowest, then if that same punter had put that same $18,000 into the totes (if a horse racing punter) at 17% takeout, then the $18,000 bet would have only resulted in a return of something like $17,000 and they would be in a loss situation. Regardless of whether the $1,000 in commission is paid before or after the collect, $1,000 profit is still better than $1,000 loss.

The dilemma being -
a) longer odds on Betfair do not necessarily equate to better value, in fact all studies reflect that Betfair prices are a better indicator.
b) You're assuming that a profit on Betfair is equal to a loss on the tote.

By my calculations I don't pay any commission.

Really?

I just don't agree that paying 17% on everything is the same as paying 24% and up to 50% on everything.

By default, Betfair's biggest mistake with the premium charge was not in implementing it, but rather opening some punters eyes as to how much commission they were really paying.
It's not 5%, never has been 5% for most punters.

Traders, arbers, book makers yes, punters - no.

This is exactly why some punters cannot believe they still aren't winning when 12% better off.
There are heaps of systems that are close to breakeven at tab prices, yet with another 12% they are still losing.
Surely it is money for jam??

Nope.

I see what your point is however, that if you are getting better odds after commission, that you are better off regardless of commission.
That's true in theory, in practice it's quite different.
Money is a far better indicator on betfair.

I know a couple of people who are currently doing extremely well looking for horses that are below TAB prices on Betfair, and taking bookies odds.

But your point is noted.

[Memsie]

Originally posted by Stebbo - "I suppose what I'm trying to say is that if that selection was a true 50% chance, then the 5% commission (net $1.95) is far LESS significant than a tote takeout of 17% which would show that selection at something like $1.85."


It should be noted that TAB's Commission on Win Pools in Australia are on average 14.5% and not 17%.

[Memsie]

A "true even money chance" on a TAB pays $1.70 not the $1.85 Stebbo has stated.

If the TAB were betting on Two-Up and I had a $1 on heads and Stebbo had a $1 on tails then the pool is $2, the TAB take 14.5% commission (29c) and the winner collects $1.71, recuced to $1.70 after rounding.

[Bhagwan]

I have a program that totals the TAB divs percentage for the whole field with a percentage total at the bottom.

It always comes to 18.5% on UniTAB because of the rounding down.

That is a big difference to the 14.5% the TABs state that they load it at.

They try to not tell the truth where ever they can & wish to stop others if they dare to make a better offer.e.g. Betfair.

I compare TAB prices all the time with Betfair & for the life of me , I can not see why any serious punter would line up to take the consistantly terrible fluctuating prices.

One would not want to do Dutching with the TABs
One could get seriously burnt with the ever fluctuating prices even after they jump.

One would not not wish to be betting to price either.

Cheers.

[Memsie]

Bhagwan, it can't always come to 18.5%. You might be confusing Market Percentage with the Commission and even Market Percentages vary.

TAB Win Market Percentages (at 14.5% commission) will vary from 117% to 119% depending on the effect of rounding, the total commission deducted including the rounding component will vary from 14.5% to say 19% if a $2.09 (rounding down to the $2.00 divi adds another 4.5%).
You cannot work out what the total commission is on the TAB's after rounding because we don't know the actual dollar amounts invested on each runner, but a guess is that rounding adds another 1.5% commission to win markets and more to place markets because of the lower dividends and greater affect of rounding.

[Shaun]

The VFG real time odds has the percentages at the botton of each betting pool take a look to see what the amounts are, i will i will list a random race from yesterday.

Gosford Race 7
Betfair 100.49%
Stab 119.37%
NSW 118.47%
QLD 117.35%

[Jack]

How is the VFG Real Time Odds accessed?

Regards

[Shaun]

virtualformguide.com/cgi-bin/tvf/access.pl

On the right hand side drop down box select RTO for the race you want.

[jfc]

Further to the fanciful notion that this charge is somehow good, because it will be easier to win once the big winners have moved elsewhere.

In contrast to normal winners, these big ones will typically find it very easy to evade the Premium Charge.

If you open an account in your spouse's name, the Betfair will treat the 2 accounts as linked.

BUt the leviathans with their staff and extensive international contacts can easily find ways of opening other accounts that cannot be linked back to them.

Presumably until now they used a sole account to maximise bonus points and minimise commission.

So they'll beat the charges while other regular winners will have to bear the brunt.

How on earth can such a situation be good for mainstream punters?

[thorns]

As others throughout this thread have said, I cant get my head around this Premium charge, but thought I'd bump this to see how it all panned out? Have many people been charged with this? Or is it something that very few people have been stung with?

[Mark]

As JFC eluded to.....open several accounts.

[jfc]

As others throughout this thread have said, I cant get my head around this Premium charge, but thought I'd bump this to see how it all panned out? Have many people been charged with this? Or is it something that very few people have been stung with?

Betfair has designed the Premium Charge specifically so that no one can get their head around it.

And in trademark style, once the initial 60 week window had elapsed Betfair then changed the rules to a lifetime window. Wouldn't surprise me if that snared more people.

And of course, it changed commission generated to an imaginary 3%, being extremely favourable for their most Premium customers who then get slugged less than the proletariat.

The Betfair Forum has regular accounts of people (who don't present as overly-capable) getting slugged.