Calling Chrome

[Mark]

Hi mate

My email has flipped out and I've lost all my addresses hence why I'm asking this on here.

What's your take on Betfair SP these days? You wrote that something's going on but did not elaborate. The SP's last Saturday were possibly the worst (from a layers point of view) that I have seen since I started following them. Pretty much negative across the board for almost every race. This on a day choc full of Group races which in the past have been the best.

ps If anyone knows how to recover lost addresses all help appreciated.

[Shaun]

Depending how long ago this happened i would try windows system restore, right click the my computer icon and click properties you will find it in there, you can go back a few days or more this should solve the issue.

In regards to the SP i have seen similar findings, with the sheet i use to place my bets for the rated runners it shows back prices and SP, i have been placing bets about 10 seconds before start time and most times the SP is better than my price and this is not restricted to just the lower priced runners.

[Chrome Prince]

Actually I emailed you last week, this explains why you probably didn't receive it.
You are correct, something is going on.
BFSP turnover has not increased substantially over recent months according to my records.
Neither has it decreased substantially.
There is only one conclusion that can be made from the market percentages, but I'm reluctant to expand.

Suffice to say that I always wondered why layers weren't given the option to lay to payout x amount rather than liability.
Liability, unless you can calculate exactly, means that you are always over exposed on certain runners.
This in turn gives "a third party" opportunity to match the overexposure and then take any old price about outsiders up to and including 100% market.

Without getting too technical, the end result is that horses over a certain price have all been pushed higher, while the overexposed horses remain in the same ballpark.

The average market percentage on Australian races was in excess of 103% six months ago. This has vanished like magic without any turnover variation.
In fact they are now paying below 100% in most cases.

Two other members on this forum are wise to the caper as are a select few on the BF forum.

[Mark]

Shaun, thank you, all addresses are back.

Chrome, no I didn't receive anything from you. I've only noticed a change over the last few weeks, to my detriment as I bet bigger on SP over the carnivals, but stayed right out last Saturday. Last year (from memory) I went in to the tune of around $10000 on the Slipper and cleaned up when it came up around 107%, this year nothing, and it was one of the few races to go a touch over 100. I am reluctant to back SP as that's is not what I do.

Strangely there were quite a few good %'s on Sunday on light turnover.

[jose]

This is exactly what I have noticed.
I have stopped laying double figure horses since CP gave me a few pointers, and the bottom line has improved, albeit slightly, as a result.
If what is happening is what I think is happening, and i have no reason to think otherwise, I reckon it is an effing disgrace.
Greed! How much do these thieving b######s want?

[Chrome Prince]

They got the exchange model correct and people flocked and fluttered to it.
It was a much needed and revolutionary portal, that finally gave some chance of getting set if you're a winner and basically better odds.

Unfortunately they botched the profit and commission business model entirely.
It's actually not a matter of greed in my opinion now, it's a matter of making up for some very poor mistakes and spending money like it's water.

I would hate to guess, but the future looks very bleak indeed.

They still retain a majority market share, but have lost a significant amount of that majority.

Anyone like to guess the amount of money spent on lawyers, applications, licences, advertising, site exchange games, needless beta site, forum improvements etc etc etc.
It's an upside down funnel at this point in time, and they are running out of clients and attracting almost nil new business.

Licence restrictions have seen them out of South Africa, part of America, they will be at least part out of Australia, France, Italy, Spain etc etc.

This is just my opinion, but users are just about fed up, they are sick of increasing fees and charges and losing access to markets left right and centre.

With some foresight and some industry nouse, it could all be repaired, but unfortunately they have already approached it all in the wrong way. They are almost out of options.
The need a complete and transparent fixed business plan of commission structure and industry tax.
It needs to be a guarantee of service to clients and the racing industry for x number of years.
The goal posts have to stop shifting, customers have to have confidence that they are not being taken advantage of behind closed doors with crossmatching and other internal bots.

[Shaun]

So far today just about every SP market is under 100%

[jose]

Yes CP you are probably right re the greed thing and yes they must have spent countless millions on lawyers etc.

Why in the name of fortune the TAB's, or indeed the Race clubs themselves, cannot set up an exchange I do not know.

[Shaun]

because they can see where betfair is going and would rather run a risk free operation.

[jose]

I hope you are wrong Shaun, but I fear you may be right.

Re the below 100% markets. The prosecution rests!!!

[norisk]

So it would seem the general consensus is that Betfair is eventually doomed to fail, at least as far as their coverage of horse racing is concerned?

[Mark]

Hopefully not completely doomed as CP says they can turn it around with a bit of tweeking. Unfortunately there is no viable alternative. Tote betting is for mugs and if you win on the bookies you get banned. Today I had my second a/c banned by Sportsbet.

[norisk]

Also got my fingers x'd they get their act together longterm, as the thought of having to go back to tote only betting makes me kind of ill....

[TWOBETS]

Tote betting is for mugs

Ouch! Thanks for that Mark.

Some of the mugs do very well thankyou at considerably better odds than Betfew can offer.

Maybe your brush strokes are a little broad. My feeling is that the number of angles left in this game is underestimated.

[Mark]

Sorry Twobets, no offence intended. Not knowing the possible return just doesn't sit right with me.

[Lord Greystoke]

Hi Mark,

if you don't mind me asking, what exactly was your 'crime' at SB and is there a way to avoid / delay for future reference?

Cheers LG

[Mark]

I was unfortunate enough to win. And if there is a way around it please let me know.

[lomaca]

I was unfortunate enough to win. And if there is a way around it please let me know.Not sure what you mean Mark, but if you want to avoid winning just follow the tipsters.

Yes I know what you mean and I've graduated from that class some time ago and now I'm betting almost exclusively with the TAB.

Some with BF but not a lot, as I am not a layer and as a backer can't get matched for the amount I want, in the price range I'm operating in, or at least not easily.

[Chrome Prince]

Don't get me wrong, they are doomed as it stands currently.

As I understand it, and I could be wrong, they moved their operation to Malta because of turnover tax in GB, however, they cannot do that here. I understand that the whole reason for the Hobart operation was to be granted a licence. If they move offshore to negate the turnover tax, they cannot offer anything Australian under the Gaming Act.

That's my understanding of it, and I could be wrong.

Betfair have a number of options and those options are either not viable for Betfair, or not viable for clients.

I'm hoping one of the guru lawyers who gets the big bucks can pull a rabbit out of a hat and hey presto :D

[lomaca]

Don't get me wrong, they are doomed as it stands currently.

As I understand it, and I could be wrong, they moved their operation to Malta because of turnover tax in GB, however, they cannot do that here. I understand that the whole reason for the Hobart operation was to be granted a licence. If they move offshore to negate the turnover tax, they cannot offer anything Australian under the Gaming Act.

That's my understanding of it, and I could be wrong.

Betfair have a number of options and those options are either not viable for Betfair, or not viable for clients.

I'm hoping one of the guru lawyers who gets the big bucks can pull a rabbit out of a hat and hey presto :DI'm not even half bottle on the intricacies of the system but how come they can operate on the US races from here and on the UK races from Malta?

Also if they set up business in say Vanuatu, what is stopping them to bet on OZ races?
I was in Europe recently and had no problem betting on the TAB or downloading my form files.

Just wondering if it's only a gentleman's agreement in the end or are the laws enforceable?

[Chrome Prince]

I'm not even half bottle on the intricacies of the system but how come they can operate on the US races from here and on the UK races from Malta?

Also if they set up business in say Vanuatu, what is stopping them to bet on OZ races?
I was in Europe recently and had no problem betting on the TAB or downloading my form files.

Just wondering if it's only a gentleman's agreement in the end or are the laws enforceable?

Yes, I'm not au fait with it all either, but they operate on the USA races from Malta also, we just have access. However, TVG have pulled a legal loophole on them recently which bans them from operating on any USA meeting covered by the TVG network.

The laws are enforceable, as I understand it the gaming act in the UK differs greatly to the Australian Gaming Act. This is why the other exchanges cannot offer Australian races at all. They must be resident in Australia and licenced. I think Vanuatu and Norfolk Island got around this because they had offices in Australia as well as those areas. They paid licence fees but not tax. Betfair is different, their market share means it is worth the Clubs going after them.

Maybe they can do something similar, but I doubt it because judgements have already been made, and that's the crux of the problem now.

[Chrome Prince]

After a little research, it's the Interactive Gambling Act that is the problem.

Here are some snipped passages which may provide a little more insight.

To operate on Australian race meetings, bookmakers and betting exchanges need to be licensed with the various state racing authorities. As well, betting on sport and sporting events needs licensing agreements with the sports.

Licensing agreements with racing bodies and sporting codes ensure the betting agencies pay a fee for the right to use the racefields and fixtures but also agree to co-operate fully with authorities if they become aware of any suspicious betting patterns or unauthorised sports people or officials placing bets.

a $60,000 fine every day an unlicensed agency bets on racefields

[norisk]

As posted in another thread, Racing Victoria has announced they will move to turnover based fee model 'based on 1.5% of turnover, increasing to 2% during the months of October and November'.

Expect QLD et al will follow shortly.

[Bhagwan]

I wonder how many years the licences are good for.

Like any business dealings , there is usually a memorandum of understanding.

If new taxes want to be imposed , that would usually be at the end of the original licence agreement rather than during.

Anything that changes could make the original agreement void.

Like we have seen with the Aust Soccer Federation where that Sports Group with a 20 year licence, have claimed the Federation has not delivered on their part of the deal and now wish to hand back their licence rather than lose any more money.

That 1.50% is a massive whack .
If betting stayed the same , that would produce billions of dollars.

I feel the authorities have zero understanding how the betting industry functions & the small profit margins that they work with.
They must see it as a small cost on top, like the Mining Tax, which it isn't, its a massive cost on top.

[Chrome Prince]

How on earth is this sustainable for any Betfair user?
It simply isn't.
If one backs or lays more than one horse in a race, it becomes a massive hit.

I just did a realtime example @ 5% commission over a certain timespan.

Turnover $44,296.62
Profit $710.81
POT 1.60%
1.50% turnover tax -$664.45
Nett Profit $46.36
So POT drops to 0.10%
And if it goes to 2%, -$175.12, or LOT 0.39%

It cannot be successful.

So will they apply the levy to backers only, layers only, split between matched bets, or perish the thought.....both!!!!

[garyf]

Over the years isn't this exactly what Peter v Landys,
Mission in life has been.

To kill off all competition from corporates betfair bookmakers,
In general so that everybody is forced to the Draconian method,
Of betting on an individual tote.

This started years ago with this bloke.
This time "UNFORTUNATELY" a huge nail,
In the coffin has been delivered against competition.

I have never seen any one person fight so hard,
And for so long to achieve this backward step.

Cheers.

[norisk]

How on earth is this sustainable for any Betfair user?
It simply isn't.
If one backs or lays more than one horse in a race, it becomes a massive hit.

I just did a realtime example @ 5% commission over a certain timespan.

Turnover $44,296.62
Profit $710.81
POT 1.60%
1.50% turnover tax -$664.45
Nett Profit $46.36
So POT drops to 0.10%
And if it goes to 2%, -$175.12, or LOT 0.39%

It cannot be successful.

So will they apply the levy to backers only, layers only, split between matched bets, or perish the thought.....both!!!!


Doesnt make for good reading...

Surely to be fair(ish) the 1.5% would be split between the matched bets? Although 0.75% still has a massive effect on your scenario Chrome Prince.

Guess we will find out soon enough

[AngryPixie]

I'd put money on the winner paying the full 1.5%.

[Chrome Prince]

Actually I would too Angry Pixie.
But then there's a world of trouble.
I lay 5 horses.
Lose marginally on the race, but 4 out of 5 lays are successful.
I pay additional 1.5% on 4 out of 5 of the successful lays.
I'm now losing a massive chunk rather than a small amount.

Strangely Betfair have been very quiet at this point, which may or may not be a good thing.

First cab off the rank, pull naming rights and sponsorship off Betfair Park, and pull all race sponsorship would be my retaliation. I'm not sure what it's worth to Racing Victoria, but I'm sure it would be a fair amount.

[Chrome Prince]

Did Sportingbet Park fall through?
I thought from Jan 1st 2012 it was going to be Sportingbet Park, but apparently not????

[Raven]

A bit of scare mongering going on here. Those of you that do high volume / low margin trading/laying or whatever, for sure the goal posts have been dismantled. But I'm not sure Betfair will be sorry to see the back of them. But for old-fashioned pure speculators that back their opinion & lay / backand earn a higher margin, say 20% after comm, this will decrease their profit, but a good profit will still be made.

I'd much prefer a 1.5% fee plus 5% comm on each winning wager and do away with this PC nonsense altogether.

[norisk]

think it is

http://www.melbourneracingclub.net.au/the-races/sportingbet-park

[Chrome Prince]

A bit of scare mongering going on here. Those of you that do high volume / low margin trading/laying or whatever, for sure the goal posts have been dismantled. But I'm not sure Betfair will be sorry to see the back of them. But for old-fashioned pure speculators that back their opinion & lay / backand earn a higher margin, say 20% after comm, this will decrease their profit, but a good profit will still be made.

I'd much prefer a 1.5% fee plus 5% comm on each winning wager and do away with this PC nonsense altogether.

Raven of course it is going to impact various types differently.
Worst will be traders and high volume low margin backers or layers.
But, 1.5% does not sound much under your scenario, but if every winning bet has an additional 1.5% commission regardless of your end profit, it's still a massive hit.

For example the difference in profit between 4% commission and 5% commission is enormous even with larger margins when calculated not on your profit, but each winning bet.

This isn't going to impact the Saturday recreational punter too much who picks out a few good things, but the more you use the exchange the worse it will be.

I guess my reaction could be seen as a bit over the top to position takers, but people like myself and Mark (and a few others) who derive almost full income from the exchange, it's a severe blow.

[Shaun]

A bit of scare mongering going on here. Those of you that do high volume / low margin trading/laying or whatever, for sure the goal posts have been dismantled. But I'm not sure Betfair will be sorry to see the back of them. But for old-fashioned pure speculators that back their opinion & lay / backand earn a higher margin, say 20% after comm, this will decrease their profit, but a good profit will still be made.

I'd much prefer a 1.5% fee plus 5% comm on each winning wager and do away with this PC nonsense altogether.

This is where you have it a bit wrong this will be just added to the lot, PC is here to stay and may even grow larger.

[norisk]

Yes, doubt the PC will be going anywhere in a hurry as the 1.5% is a totally separate issue.

[moeee]

PC nonsense?
I'm sure it doesn't stand for Personal Computer.
At the moment I have Politically Correct as my top selection , but I wouldn't back it.
I have made up one called Profit Commision.
Could someone put me out of my misery please?

[lomaca]

PC nonsense?
I'm sure it doesn't stand for Personal Computer.
At the moment I have Politically Correct as my top selection , but I wouldn't back it.
I have made up one called Profit Commision.
Could someone put me out of my misery please?"Politically Correct"?
You read too many blogs moeee.

It stands for Premium charge, ie. you win more than others you pay extra!
Nothing in this game is free it seems my friend, Or should I say FAIR?

[moeee]

Lol
Thanks Lomaca.

[Chrome Prince]

Had another thought while I was in the shower, best thinking done there :P

If BF have to supply turnover figures and thus the calculations of what 1.50% should return to the various raceclubs on a regular basis.

a) will they not include their crossmatching and skimming bots in those figures?
b) will they only declare customer transactions?
c) might they cease and desist this practice altogether?

The thought occurred to me that turnover is turnover, no matter where it originates from, thereby rendering those practices unprofitable.

We live in interesting times, it's like watching the evolution of betting in fast reverse.

[The Ocho]

I seem to do my best thinking on the bog, which might explain why my betting bankroll keeps going down the toobes. :(

[norisk]

As part of their ruling the High Court would have had a thorough examination of Betfair's books to establish where & how they generate profits, & the ruling would seem to suggest that the imposition of a turnover tax would/should not render their business unprofitable & that with some tweaking, they could continue on as before.

That said I wonder if their review also looked at the issue of the impact on Betfair clients, profitable or not? I would assume one couldn't be done without the other, as clients leaving in droves tends to be bad for business;)

Perhaps we might be jumping the gun on this one.

[lomaca]

As part of their ruling the High Court would have had a thorough examination of Betfair's books to establish where & how they generate profits, & the ruling would seem to suggest that the imposition of a turnover tax would/should not render their business unprofitable & that with some tweaking, they could continue on as before.
Hardly likely norisk, courts concern themselves with the rights of the plaintiff not what effect it will have on the defendant.


That said I wonder if their review also looked at the issue of the impact on Betfair clients, profitable or not?
as above, extremely unlikely, why should they?
It's the business of BF to make it work under the rules.


Perhaps we might be jumping the gun on this one.Maybe so, but it will end in tears for some punters on a low POT.
As a backer I'm not fond of bots making it difficult to bet against them by constantly changing the odds they would accept, but if there are no layers there will also be no chance for backers.

Time will tell but one thing is certain, as with new taxes there is only the end user who is going to pick up the bill.
The question is as CP has posited, can you afford to pay that bill?

[garyf]

Picked this up on another site.

How many shop owners hang the closed sign up when they have people at the counter with money in hand waiting to buy their product? Not many, right?

If they do then they are either idiots and will likely go broke, or they have an agenda.

I have been asking myself why Racing NSW consciously imposed a tax law on the giant global betting exchange Betfair, when they knew that their business model would never survive such a hit.

Many observers may consider Betfair (BF) are just another bookie and who cares anyway, but they are not a bookie as they facilitate bets between two punters when one bets to win and the other lays to lose. BF survive by collecting a 5% (or less) commission from whichever punter wins his investment. Racing NSW should be collecting their fair whack from the profit that Betfair makes from their winning members, but in a staggering affront, they have demanded a 1.5% tax based on the turnover.

I asked trader Tony Hargraves for a print out from his trades today and you can quickly see that Betfair have no future in the exchange business as a partner with RNSW.

Tony worked on ten races and as usual won on all of them, but importantly he turned over $16,754 and made a profit of $320 which yielded BF $6.40 Gross Profit on Tony's trades, but because RNSW want 1.5% of the turnover, BF lose $251 from the business.

OK got it!

Betfair generate incremental income for the racing industry as their unique fun model has attracted many players to the fold, and thousands of "retired" punters have flocked back to the industry as they love Betfair. The BF business creates millions of dollars of exotic bets and bet backs for corporate bookies including the TAB.

Tony had $8,200 in bet backs that stemmed from his trades today, which RNSW also grab 1.5%.

So we have proved that Betfair cannot survive under the RNSW tax and that they attract incremental revenue and participants to the industry. So given that very clear and obvious statement is some government watch dog going to ask why?

Racing Minister George Souris must ask RNSW why have they actively killed off a cash cow? We all would like to know the answer.


CHEERS.

[TheSchmile]

Hi Garyf,

My first instinct is because the TAB effectively runs racing NSW and this model suits them just fine, they'll probably increase takeout to 20% and the mug punters won't notice a thing.

TheSchmile

[garyf]

Hi T.S.

When it comes to Peter v Landys and Racing N.S.W.
Anythings possible.

Cheers.
Garyf.

[Shaun]

Picked this up on another site.


Tony worked on ten races and as usual won on all of them, but importantly he turned over $16,754 and made a profit of $320 which yielded BF $6.40 Gross Profit on Tony's trades, but because RNSW want 1.5% of the turnover, BF lose $251 from the business.

OK got it!



Nothing against the guy for finding what works but this is the reason betfair have failed, traders work the market and pay little, that's why they introduced the PC.

[garyf]

Glad it's not me who bets like this for a living.
But feel sorry for those who rely on this method.

Got to remember why and who is responsible,
For all of this it's one mans personal crusade to,
Effectively quell all competition.

It's not the first time Racing N.S.W. have been,
Emroiled in court cases just this is the first one,
They have effectively won.

Betfair didn't do this to themselves and didn't,
Change the terms of betting it was forced on to them.

Nobody elase seems to have mentioned this.

cheers.

[TheSchmile]

Hi Garyf,

I still remember Vlandys on the racenet punters show and how good his rebuttals were.

Great mullet too....or am I imagining things?? :D

TheSchmile

[garyf]

L.OL.


Cheers.

[Chrome Prince]

Australian racing administrators either just don't understand the exchange concept or they want them out completely.

The TAB and bookies make money on turnover, exchanges make money on commission from winning bets.
Either way, I can adapt by utilising foreign markets more, but I think it's sad that in the end Australian racing will actually suffer rather than gain from a turnover tax.

If it weren't for an exchange, I certainly wouldn't be looking at GB, SAF, UAE, USA markets etc.
I'm quite sure that people from those countries wouldn't be looking at AUS racing either, except for maybe a handful of races each year.
So in the end, AUS racing will be the loser.

[Chrome Prince]

In response to the decision of Racing Victoria to move from a funding model based on gross revenue to one based on turnover, Betfair Australasia’s CEO Giles Thompson stated: “We are extremely disappointed that Racing Victoria has ignored the economic analysis and evidence which clearly demonstrates that a fee based on gross revenue is in the best long term interests of Victorian racing.

“Racing Victoria engaged Peter Yates and PWC to conduct a widespread review to find the optimum funding model for racing and it was found that a fee based on gross revenue ensured the greater returns to racing in the long term whilst continuing to foster competition. This was the same conclusion reached by the Productivity Commission.

“Betfair has always paid race fields fees to the Victorian racing industry. A fee based on gross revenue ensured all types of wagering operators could compete and offer their services to punters to bet on Victorian racing.

“A gross revenue model has been in place in Victoria for over 3 years and in that time the racing industry has continued to flourish with competition driving sponsorships and increased services to punters. Betfair has been at the forefront of that competition. With over 4 million customers worldwide, Betfair provides the Victorian racing industry with the opportunity to tap into a global market place that local operators can’t provide.

“A fee of 1.5% of turnover equates to 60% of Betfair’s revenue generated on Victorian racing and this will increase to 80% of revenue during October and November. No business can sustain costs at that level and clearly we will need to consider our response.

“By offering punters the experience of a betting exchange, we are providing a unique platform for them to engage with Victorian racing. A betting exchange relies on liquidity and is therefore a high turnover operator by definition. The fee being proposed by Racing Victoria seriously hampers the ability to offer such a product on commercially viable terms.

“The racing industry is dependent on funding it receives from punters and racing bodies should be doing everything in their power to ensure they are provided with choice, customer service and competitive prices. A fee based on turnover seriously limits competition and will only hurt racing in the long term”.

I concur.

[norisk]

Hardly likely norisk, courts concern themselves with the rights of the plaintiff not what effect it will have on the defendant.




lomaca, this was an appeal by Betfair and Sportsbet & as part of the appeal they would have needed to demonstrate how the introduction of a turnover tax would negatively impact their businesses.

"Betfair argued that the payment of a fee calculated on the basis of turnover was unconstitutional because it imposed a greater burden on its profit than it did on the New South Wales totalisator operator, TAB Ltd (TAB). This was viewed by the Full Court as being the case because its business model is based, in part, on smaller margins and requires higher turnover to achieve equivalent revenues when compared with other models (i.e. bookmakers or totalisators). The primary judge dismissed this claim on the basis that, while Betfair had demonstrated that the use of a turnover benchmark was discriminatory, it had not demonstrated that it was of a protectionist kind."

[lomaca]

lomaca, this was an appeal by Betfair and Sportsbet & as part of the appeal they would have needed to demonstrate how the introduction of a turnover tax would negatively impact their businesses.

"Betfair argued that the payment of a fee calculated on the basis of turnover was unconstitutional because it imposed a greater burden on its profit than it did on the New South Wales totalisator operator, TAB Ltd (TAB). This was viewed by the Full Court as being the case because its business model is based, in part, on smaller margins and requires higher turnover to achieve equivalent revenues when compared with other models (i.e. bookmakers or totalisators). The primary judge dismissed this claim on the basis that, while Betfair had demonstrated that the use of a turnover benchmark was discriminatory, it had not demonstrated that it was of a protectionist kind."In this case I was wrong, sorry.

[Chrome Prince]

The primary judge dismissed this claim on the basis that, while Betfair had demonstrated that the use of a turnover benchmark was discriminatory, it had not demonstrated that it was of a protectionist kind.[/I]"

Well, I guess on the basis of the objection (discrimination) he could not rule in their favour, but clearly on the basis of percentage of profits it is unfair.

It's how I went out of business selling computer parts.
The impact of GST was discriminatory for me because anyone who sold parts bought from Australia and ended up paying GST on profit only because they could claim the GST paid on the purchase.
As I purchased my parts overseas which were GST free, I had to bear the cost of GST on the entire transaction.

[Bhagwan]

I find it hard to believe that Betfairs legal representatives went for the discrimination angle.

I also cant believe the Betfair managers allowed that angle to be played

That's plain crazy & totally without foundation.

It just wasted every ones time not to mention the massive expense in legal fees.
I would want my money back if that's the best legal advise available.


One - You have to prove it, which means they have to give evidence of being singled out from the others which would not be so, seeing that its a broad based tax.

I feel they could of taken an angle similar to a co-op operational business.
Run by the members, for the members.
This is what makes it distinctively different to a point where a Turnover Tax on the Betfair model of operation would render it untenable.

To enforce a turnover tax on a business that does not profit from turnover would then maybe argued that their position should be looked at differently & therefore taxed differently.

They could have argued more successfully by stating that their business model is totally different to TABS & Bookmakers.

Betfair's turn over is based on lots of five percents, after the outcome, not prior to outcome ,therefore Tax should be based on 1.5% of 5%.
e.g. 5% = $100,000 income x 1.5% = $1500 Tax to be paid.

Because the business structure is based on the ebb & flow of Back & Lay transactions, unlike Bookmakers where their profit percentage is built into the price being sold.


Does the Tax wish to be applied to the Lay bet turn over or does one Tax the Back bet turn over only or do they wish to Tax both Back & Lay which would then make it a form of double taxation if a punter where to Back & Lay the same runner.

I don't believe the learned parties where totally abreast of how an exchange actually works when it comes to Back & Lay betting.

Why is all the thinking left up to me around here.

[norisk]

Well another point of view may be that the High Court, which I assume now has intimate knowledge of how BF makes a crust, concluded that the 1.5% could successfully be absorbed by BF etc & they could continue on business as usual...

We shall see

[moeee]

The Racing Industry had made it very difficult for Betfair to operate in Australia.
The Racing industry is now making it very difficult for Betfair to continue operating in Australia.

I see it as the Turnover Operandus is irrelevant.

It is no coincidence that Victoria followed NSW example.
I see it as the Racing Industry simply want Betfair out.

I don't quite see the motive , but feel that the Recent New Contract with TAB that mentions the possibility of TAB operating as a Betting Exchange may be at least part of it.
Part of the motive may or may not be a drift of TAB Punters to the Exchange Operators , and that may not be a good thing for the Australian racing Industry.

Like I said , it's not about Betfairs Turnover , but Betfair itself.

[UselessBettor]

The racing industry has made their point clear. They want betfair out.
In the end unless their is an exchange running here I think most exchange participants will move offshore and trade the UK markets.

The tab's will not operate an exchange. They would have to bear the same costs which betfair is now facing. Not to mention the liquidity would be a lot less then that currently on betfair (look at betdaq for example).

In the end the educated punter loses out unless we move our money off shore into the UK market.

That revenue which would have gone to the racing industry in NSW and VIC is now lost.

Hopefully other states do not also adopt this stupid policy.

Its funny how the politics between different people in any business are usually to the deteriment of the business. In this case the politics are internal in the NSW and VIC racing industries and is a childish play to exact revenge on betfair. Its a "I'll show you" decision and unfortunately the punters are the ones who suffer as usual.

[Dale]

The Racing Industry had made it very difficult for Betfair to operate in Australia.
The Racing industry is now making it very difficult for Betfair to continue operating in Australia.

I see it as the Turnover Operandus is irrelevant.

It is no coincidence that Victoria followed NSW example.
I see it as the Racing Industry simply want Betfair out.

I don't quite see the motive , but feel that the Recent New Contract with TAB that mentions the possibility of TAB operating as a Betting Exchange may be at least part of it.
Part of the motive may or may not be a drift of TAB Punters to the Exchange Operators , and that may not be a good thing for the Australian racing Industry.

Like I said , it's not about Betfairs Turnover , but Betfair itself.


Agreed, hidden agenda.

[moeee]

That revenue which would have gone to the racing industry in NSW and VIC is now lost.


Or like me , they now go to the corporates , the TAB Fixed Odds Betting or Totalisator.
Punters bet as healthily when Betfair wasn't around as they do now I figure.

I only bet Overlays so I don't care who provides it.
Just means there will perhaps be lesser betting opportunities.
Easily overcome by increasing my bet size.

[norisk]

yeh, nah, not convinced yet the impact on BF is a deathknell, lot of smoke & mirrors going on IMHO.

[The Ocho]

Or like me , they now go to the corporates , the TAB Fixed Odds Betting or Totalisator.
Punters bet as healthily when Betfair wasn't around as they do now I figure.

I only bet Overlays so I don't care who provides it.
Just means there will perhaps be lesser betting opportunities.
Easily overcome by increasing my bet size.
Only problem with the corporates is that they allegedly ban you if you are successful (not that I'd know anything about that :rolleyes: ).

And of course, all lay bets would be off.

[moeee]

Only problem with the corporates is that they allegedly ban you if you are successful

Yeah , I wish I was banned :(
Maybe one day.
Maybe even you get banned one day Ocho - but probably would be for using a bot :)

[UselessBettor]

And of course, all lay bets would be off.
Technically no, but they would cost a lot more. You can back every other runner.

[Chrome Prince]

In the end the educated punter loses out unless we move our money off shore into the UK market.

That revenue which would have gone to the racing industry in NSW and VIC is now lost.


That is exactly what I'll do.
I'm not desperate to find an Australian betting medium and in fact would deliberately avoid any exchange set up here by the TAB on principle and liquidity. Plus there would be additional setup costs etc for me and it's too complicated as I'm basically an automated layer.

They are forgetting that Betfair makes a significant contribution to Australian racing as it is without a turnover tax and that contribution will be lost.
The Australia racing industry can ill afford to lose money for the sake of "we want more".

[partypooper]

yeh, nah, not convinced yet the impact on BF is a deathknell, lot of smoke & mirrors going on IMHO.

HEAR HEAR!

[Chrome Prince]

Of course we have to wait and see what the response is from Betfair, but surely when the model is commission on profit on a race from one half of the transaction, a turnover tax can't be sustainable.
If Betfair pass on the tax, which they have to to be profitable, then after doing the sums in my situation, it's impossible for me to make a profit on Australian racing, traders, market makers and multiple backers and layers in the same race.
1.5% turnover tax equates to almost double commission.

[norisk]

Found the below article on another site, fingers crossed the approach described is adopted


Another option in the turnover tax debate

By David Nolan

When punters bet on any event they are competing against each other and it is the money wagered in various amounts on the competitors inthat event that creates the market. Bookmakers essentially act as aconduit for people wishing to wager on an event.They frame markets withan overound which gives them the mathematical advantage that allows them over time to retain a percentage of the money wagered. Bookmakers,Totes, and Betting Exchanges all are are conduits for punters to competeagainst each other. The punters aim is to back the winner. The bookmakersaim is to manage the money bet through him as effectively aspossible. Hence the term "bookmaker". In order for him to do that he has at times to trade the monies bet with him through other agencies (other bookmakers,totes or exchanges) to offset his liabilities. He may takebets of say 100k on an event but to limit his liabilities to anacceptable amount may need to trade a significant portion of that figure to balance up his book.

All bookmakers large and small, trade to offset liabilities. Eachbookmaker will operate to different business models regardingrisk/liability but all will have to trade to offset liability at somestage.

When I was involved in bookmaking in the UK through the seventiesand eighties a turnover tax was levied.To prevent the turnover tax being paid twice or more all hedged bets were deducted from the dailyturnover totals.

This is the only fair way to levy the tax. If a punter stakes 10k on a runner and the bookmaker hedges 5k of it with another agency he onlyhas a turnover liability of 5k. The other 5k is now with agency used forthe hedge.That agency may subsequently decide to hedge 3k of that withanother agency. The liability for the tax rests with the final agency.

The turnover tax for ease of collection is levied by the taxingauthority against the layer who may then offset it by levying acomparable tax on the backer.This used to happen in the UK where apercentage deduction was made on winning bets to offset the tax.In thecase of the proposed 1.5% turnover tax here in Australia that surelywill be absorbed by most agencies and offset by increasing the overoundin general or simply accepting that it will decrease profits.The taxtherefore is levied only on the LAY side of the book

If this system is applied to the exchange (Betfair) there should be no problem accommodating a turnover tax other that the obvious one of it being a tax andtherefore unpopular.A exchange trader may make multiple trades on anevent -accepting a liability and then offsetting it over and overagain.If for example he he takes 10 individual bets of $100 at 2.00 andthen offsets his liability 10 times at 2.10 he has traded successfullyto remove his liability and guarantee a profit of $50 by then accepting a final lay bet of $50 at 2.00. At each stage he has offset his liability and passed it on to another party except for the final lay bet of$50.It is this $50 that the turnover tax should be levied against asthat is the final destination for that $50.The other $1000 has beenpassed on and the tax should only be levied where it finishes.

The exchange (Betfair) needs traders to provide the liquidity itneeds to function effectively.The turnover tax will still be levied butonly on the real amounts that have been laid. When the exchange (Betfair) shows a "matched" figure on an event it is so totally misleading as tomake it virtually irrelevant as a huge amount of it is traded moneygoing back and forth.

The exchange (Betfair) has totally changed the betting landscapewherever it operates and allows player a range of options previouslyundreamt of. To say that it has stimulated competition would be anunderstatement it has been revolutionary in lowering margins in generaland has given the average punter not just the pro's a realistic chanceof finishing on the right side of the ledger. All serious punters use itat some time, some almost exclusively now as they have migrated fromconventional punting to trading. It's main negative here in Australia ispoor liquidity but that surely will improve over time.

The racing authority has had it's day in court and the tax is now adone deal. It is now time for the racing ministers in each state to stand up and show some leadership.It's in everyone's interests that we have a strong and vibrant racing industry here in Australia.That industry istotally reliant for it's future on the punting dollar and that ingeneral comes from working Australians.If we are going to be paying forit every time we have a bet then surely we have a right to have someinput into how these massive sums of money are distributed and the terms of trade that generate them. The racing ministers need to remind the racing authorities of whose money they are spending and asking them howthey intend to repay their chief benefactors by producing a product that will keep them engaged both now and in the future.

Competition is good for the consumer - the only ones opposed to it are the vested interests that benefit from the lack of it.If the exchange(Betfair) is forced out of the racing business here in Australia it will have a hugely negative impact on Australian punters and only benefitthe opposing vested interests.All the states racing ministers must bemade aware of what the Australian punting fraternity expect ofthem.There is no valid reason at all why the exchange (Betfair) cannotbe allowed to continue and contribute to Australian racing as I haveshown above.If it is forced out it will be because the other vestedinterests have had their way at the expense of the Australian punter.The racing ministers are elected representatives and need to be made awarethat we are watching developments and that we also have a vote and thatthere are a lot of us.Where I live in Far North Queensland the mostpopular male pastime is fishing. The wild rivers policy of the previousLabor government was hugely unpopular with anglers here.A common sightup here is the car sticker which reads "I Fish and I Vote". Punters need a voice here in Australia to protect their interests.

As I said at the beginningall punters are essentially competing against one another and inaccepting that, getting general agreement amongst them is probablyharder than "herding cats". Surely keeping the betting landscape openand competitive is one thing we can all agree on.



The exchange (Betfair) because of it's relatively low commissionstructure probably cannot absorb a 1.5% turnover model and retain it'scommercial viability. Some vigorous arm twisting by the ministers mightproduce a compromise that could be accepted as having merits all round, for example:

Betfair increases its commission on Australian racing by 1% acrossthe board ie the base fee rises to 6% the lowers proportionately to 3%.The other 0.5% is absorbed by Betfair

Betfair waives all of it's outrageous "premium charges" for businessconducted through the Australian wallet.This would make the Australianproduct attractive to the big hitters overseas and increase turnover and liquidity

David Nolan

[Mark]

Unfortunately this relies on polticians having commonsense.

[TheSchmile]

Definitely not going to happen then Mark!! Ha ha

The Schmile

[norisk]

True Mark, a few of them do like a punt tho so lets hope at least one in a position of influence loves his/her BF account & despises the TAB's ;)...but wont be holding my breath...

[Chrome Prince]

The problem is that traders and scalpers are then advantaged and backers or layers of multiple horses in a race are disadvantaged again.

There is no way Premium Charges will be dropped anyway.

If anything there will be PC 4 or super duper premium charge to accomodate the levy.

This is only my opinion, but they need to start from scratch with commission and premium charges and restructure the entire method of fees which will fairly impact on all types of exchange users.
However, I don't think this will happen.

Very strange no further announcements forthcoming.
Perhaps they are going to try a different strategy based on the board meeting.

[norisk]

Deafening silence from Betfair since the High Court decision...why do I get the feeling the bomb will be dropped any day now...

[norisk]

although I found this paragraph from the ruling very interesting (enlightening?)

In the course of the litigation Betfair abandoned its contentions that the burden of the fee is such that it cannot continue profitably to offer wagering services on New South Wales thoroughbred racing and harness racing and that it is likely to exit from that market. Indeed, in cross-examination, the Chief Executive Officer of Betfair, Mr A J Twaits, agreed that Betfair had not reduced the number or type of horse races in New South Wales upon which it seeks wagers, nor had the licence fee affected the odds offered; changes by Betfair in its business strategy had not been driven or impacted by the introduction of the fee. Perram J made the following findings[22]:

"The respondents alleged that as at September 2008 and at the time of the trial Betfair would continue to take steps to expand its betting exchange system in relation to many different kinds of events. Mr Twaits accepted this in cross-examination and I find it to be the fact.
The respondents alleged that it was likely that Betfair would conduct its business with a view to building a customer base and increasing goodwill across the whole of that integrated business and, again, Mr Twaits agreed that this was so and I so find.
The respondents alleged that Betfair would consider which decisions to make in response to the race fields fee and, again, Mr Twaits agreed that this was so only if, however, Betfair was unsuccessful in these proceedings. I so find."

[Chrome Prince]

Yep, the silence is almost eerie.
It's like the calmn before the storm.

Although I have noticed some definite market changes recently, perhaps they kicked their bot into overdrive to compensate.
Wouldn't surprise me in the least.

[Mark]

Yes, the SP's last Saturday, although mostly negative were not as bad as the week before. The Doncaster, which last year I went into for something around $5000, but this year chickened out and only went in for $200, returned 113%. Very good but annoying.

[norisk]

Are you guys still managing to trade profitably?

[Bhagwan]

Hi Mark,
Are you annoyed that it returned 113% or because you were Chicken.
Blak , Blark
It was only $5000.
LOL

[Mark]

BOTH !!!!

Get your amounts right @113% for $5000 means around $650 jumps in.

[mattio]

Just got the email - base commissions going from 5% to 6.5% on ALL Australian racing!

[Chrome Prince]

The nail in the coffin for me. :(

[norisk]

extract from statement issued -

"In order for us to continue to offer an Australian racing product to customers, it is necessary to implement an increase to prices on all Australasian racing markets," Betfair announced in a statement issued late on Friday.

"From May 1 2012, Betfair's market base rate on all thoroughbred, harness and greyhound races in Australia and New Zealand will increase from 5% to 6.5%.

"Customers will still obtain Betfair Points on these markets in the ordinary manner and will remain eligible to receive a discount on the commission payable in accordance with their discount rate (the maximum discount rate remains 60%).

"This price increase does not apply to any sport or overseas racing markets.


Had to happen & still much better than the alternative, feel for the traders tho,

[Shaun]

it does not effect traders unless liquidity drops as they are on a low percentage anyways and pay little commission, that's why they pay PC

[The Ocho]

That's a 30% increase in the commission. :mad: :(

[moeee]

thank you for that NoRisk

Up a whole 1.5%
WOW - I'm shaking at the knees - How on earth am i ever going to survive.

They could have gone up 20% and I reckon I would still be doing better at Betfair than I am with a tote system that continually drops well over 100% after the race has started.
Thats the greyhounds , don't know about you horse people.

I wish they had of increased it to 10%.
How the ******** will I be able to mentally work out 6.5% :(

[norisk]

then I dont feel for the traders...

[Chrome Prince]

I'm not sure everyone understands the difference an extra 1.5% makes when applied to every single winning bet, no matter how little you end up winning overall.

[Shaun]

From what i have seen if you are on lower commission you will not have to pay the 1.5% it will be staggered just like it is now, those on 2% might pay 2.6%

[norisk]

It certainly will have an impact Chrome - for example my commission for the last few days is $139, estimate it would have been $194 under the new structure.

The suppose the impact appears extreme as I mainly back or lay on 1 or 2 runners a race, but regardless still much better off than having to move back to the TAB's.

[partypooper]

The nail in the coffin for me. :(

Well, Chrome I won't say it, I would love to say it but I won't but I will say that I would love to say it but I won't hee hee!

[Chrome Prince]

Well, I woke up to a rude shock.
Endora doesn't like Derwood, so suddenly my commission jumped from 4.40% to 5.72%.

Saaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaam!!!!

[AngryPixie]

Well, I woke up to a rude shock.
Endora doesn't like Derwood, so suddenly my commission jumped from 4.40% to 5.72%.

Saaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaam!!!!

Your old! :D

[jose]

2012-05-01
16:52 1937758872 2012-05-01
16:49 AUS Town (AUS) 1st May / 16:49 R7 1200m Hcap
Comm Charged 5.46% On Net winnings of AUD


2012-04-30
17:03 1936233688 2012-04-30
16:33 AUS Dubb (AUS) 30th Apr / 17:00 R7 1000m Mdn
Comm Charged 4.16% On Net winnings of AUD



Much the same story here CP. 4.16% to 5.46%.

May have to have a rethink about my whole strategy now.
************.. damn...poo......blast mumble mumble

[norisk]

could be worse fellas, could be back to


http://upload.wikimedia.org/wikipedia/commons/thumb/7/70/Tab_can.jpg/220px-Tab_can.jpg ;)

[jose]

Sad but true Norisk.

[norisk]

The way I am approaching all of this is the same as any event which eats into the bottom line - a tax hike (probably be dead & buried before another one of those comes around considering the state of the planet;)), power hike, rego hike, child support:o & on it goes...

Although one starts to wonder on occasion who one is actually busting a gut for...

[jose]

" Although one starts to wonder on occasion who one is actually busting a gut for... "

Have been going down that track a bit myself lately NR.
Used to be that we worked

1 day for the tax man
1 day for the bank
1 day for the housekeeping etc
and the rest was ours.

Now it seems that the whole week is for someone else.
No easy answers, but I'm all ears if anyone has any suggestions.

[Mark]

2 average days in, have gone from 4.3% to 5.6%, and paid roughly an extra $9. Could have been worse, ie no Betfair at all.

[norisk]

Yeh looks like business as usual with solid turnover today.

[garyf]

Picked this up on a racing website i look at from time to time.

Anyone else heard this for all you Betfair users(not me),
I certainly hope this does not happen.


BETFAIR STUNNED BY NEGATIVE REACTION

An insider tells us that Betfair is so stunned by the negative reaction to their increased commission to cover the race fields levy they may be forced to abandon Australian Racing altogether.

Cheers.

[norisk]

link?

[garyf]

Recieved this morning in an email,

Amongst other things.

www.horseracingaust.info (http://www.horseracingaust.info)

Or i can send you the original email.

Cheers.

[garyf]

Just spoke with the proprieter it's not on the website,

It's an information thing that's passed out to members(via email)
Will send the email if you want for verification that i actually,
Recieved it

There are some articles not this one on the proffessional punters diary,
That may interest some regarding overseas bookie William Hill.

Cheers.

[Chrome Prince]

I didn't realize I had such an impact ;)

I have abandoned AUS markets completely in protest.
I used to have bets in every race including the trots, so turnover wise, I wouldn't say my contribution was small, although profit was.

As Mark indicated, traders and market makers will not worry one bit, but it becomes totally uncompetitive with Best Tote on the types of horses I back and for backers or layers of single horses.

It has even had an impact on those horses under $10, not just first and second favourites.

So I have moved my betting to UK and USA and have taken up AUS sports betting so my commission remains without the levy :D

I was just joking about my impact, my contribution is probably very small by average standards, but if I've done it, surely the bigger bettors will or have moved on, because of the greater impact on the profit.
It's only a matter of time.

[Chrome Prince]

Now to the bigger picture.
As a precedent has been set, what's to stop the AFL, or any other sport demanding a levy to publish the games and bet on them.
The AFL gets the turnover levy and is distributed to clubs after a percentage for the administrators and regulators of the sport?

[Shaun]

I know for the last week i have moved everything to bookies and have not used betfair.

[norisk]

Sports administrators would be derelict in their duty if they don't follow suit.

[TWOBETS]

I didn't realize I had such an impact ;)

I have abandoned AUS markets completely in protest.

So I have moved my betting to UK and USA

Been fiddling around with USA markets just recently myself CP, but what I can't figure out is how do you know when they're gonna jump? Is there any way we can get current knowledge?

Found a website that streams but of course it has the dreaded delay factor.

A couple of days ago. Indiana was jumping up to 5 minutes ahead of schedule. It does your head in!

[Chrome Prince]

Yes, Indiana often jump well before advertised start time, a few days ago it was at least 20 mins prior to schedule for each race!
I generally use Betfair live streaming (flash version) and as soon as they start loading the first horse into the actual barrier, you know they'll jump in seconds.
They say the delay is 15 seconds, but depending I think it gets up to at least 30 seconds at times.
Sometimes I've been caught out with a large field not one horse loaded and they're off, so I actually think the delay varies up to 60 seconds depending on the track.
I usually stick to first horse in, they're about to fly the gates.

[TWOBETS]

Many thanks for that tip CP, I'll give it a whirl.

Pimlico is the offending venue this morning. Grrr!

[Mark]

TWOBETS, try http://espn.go.com/horse/liveracing08.html

Their delay is generally less.

[Merriguy]

TWOBETS I find the "running late" at some tracks is far more annoying. After a while you get used to the delay.

[Chrome Prince]

Yep I've used twinspires myself, sometimes you can toggle the two and get untelevised races from one or the other.

At twinspires CCleaner is you're friend ;)

[TWOBETS]

Thanks Mark. ESPN was the site I had been using and yes I agree the delay is quite a bit less than Betfew. Still, as CP says maybe one will have a venue while the other doesn't, so it's all helpfull stuff. Ta again.