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.

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.

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

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

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

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

Deleted. Potentially defamatory. Moderator.

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

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.



They most certainly can.