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“Turnover fee”?
“Turnover fee”?
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Replies: 88
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back bet turnover is correct - traders is what will stuff them up - easy fix, ban traders
filthy traders  |
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Any one that thinks what you are risking in a lay bet is your turnover is wrong, think of the bookies you are no different to them.
This is how you work out turn over no matter if you back or lay ((Returns - Outlay) / Outlay) They can only tax on one side because for every backer there must be a layer of equal value if they taxed both sides they would be double dipping. |
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The easy fix for traders is to separate back and lay in to 2 markets, this won't effect people laying or backing multiple horses but will effect traders.
Back 200 @ 3.00 lay 203.39 @ 2.95 Back Comms 20.00 Lay Comms 10.16 This would stop traders overnight because the profit on this would only be 3.39 yet min comms would be 10.16 |
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So if I ring up a bookie and ask what price can I back the next 3/1 fav to lose and he quotes me 1/4. And I say I'll have 400 on it........... What is then considered the bookies turnover to pay tax on.?
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i think betfair will add an extra % levy on all win bets
not lays and possibly a levy on traders. lets say first lay or bet on any horse or dog attracts commission as it is now but multiple bets or lays on the same dog or horse attracts some sort of surcharge. |
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Ok, the question here isn't weather the TAB 's and racing boards want Betty out......we already know this,it is quite apparent. Possibly one state may hold the line , however there is a reason NSW and PVL charged into fray, and not the others.
What they ( NSW) are defending is the heinious "turnover tax model". The price of punting is too much now , they won the battle but will lose the war to....pokies , sports ,keno etc . Well done Establishment , enjoy your sandcastle while it lasts...won't be long now |
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$1 million on black caviar @1.04
corps pay the punter $40 000 and $15 000 levy. like you you think thats gonna happen? more like offering $1.02 about something that should be $1.04 the shorter the price ,the more distorted it becomes |
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u got it aachen, now transfer that model to the BF back and lay model and BF r out of business.
hopefully only the back/side will be liable to pay the fee, and then i'm sure BF will come up with a formula, that the punters will pay for in the end. but at least they will continue |
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Would mean the end of in-running unless they can work something out
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at the end of a race betfair obviously already work out who wins what - wouldn't it just be 1.5% of any winnings?
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if thats the case maybe Betfair slug us an extra 1%
in that case if you were returned $100,000 over the year you would pay an extra $1,000 which is good because it's important the Gerry Harvey's of the world have than money for their prizemoney it's very important to me that people like Gerry stay in the game |
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Craig, it doesnt quite work like that. My commission generated over a year is close to 17%. Thats is b/c you pay on every winning market. You dont get a refund of commssions paid for every losing market.
You would be surprised but a 1% increase in commissions would have a big impact on your profit over a year. In fact the no of punters that win over a year would reduce significantly. |
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you may have have win markets of 1.5million and loss markets of 1.4 to win the 100k
so you are paying an extra 15k hence 15% in actually fact craig |
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i was talking about collecting $100k and maybe losing $90k - so yes agree the $1k is 10% different to the overall profit and loss
obviously you guys bet bigger than me  |
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because all these speculations are filled with 'who knows' and 'what ifs' ... wouldn't you think that at some point .... in the bf case before their worships ... that this dilemma would have been brought to their worships
all i remember reading was how bf felt they were hard done by ... because of some imaginary retsriction of trade based on cross border interstate business ... ffs i can see how the corps turnover situation was easily decided upon ... but why didn't bf see the writing on the wall ... and explain clearly ... why turnover is 'clouded' in their model ... and NOT THE SAME .. as the decision based on the corps situation ? |
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ken callendar in todays Daily Telegraph wrote the following
One of Australia's foremost legal minds said the racve may not be over between Racing NSW and Betfair He went on to say Betfair might still have a case to go the ACCC claiming it's customers are disavantaged or even to go a step further and mount a challenge in the Federal Court under the Trade Practices Act - he said hope not i say hope so although I hope they mount a better case - maybe they need Kye and a few others from here onboard |
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The ACCC option was considered when they lost the Federal case:
http://www.heraldsun.com.au/businessold/sportsbet-betfair-must-pay-race-fees/story-e6frfh4f-1225954967866 But not sure why it hasn't been mentioned since...perhaps they were waiting for this point. |
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Craig they cant go any further with the arguement already used or ruled on, this is the end of the line. it has been ruled upon that Racing can charge for the use of their product, nothing can change that.
the big hurdle now is to determine what constitutes turnover in Betfairs business model, and who makes that call. If the racing bodies push that both the "back and lay" in the BF business are turnover then it is the death of betting exchanges in Australia But if they determine that only the "back" side is to be taxed (which seems to be the common view) I have done some quick calculations and i came up with: BF only need to add .5% comm to affected races and they will be no worse off. Of course, us the punters get it in the neck again and its the end of 101% markets on the back side and 99% markets on the lay side, but the market place will work it out only time will tell. |
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actually i am wrong in my calculations so completely disregard the .5% add on.
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If Betfair move offshore can they avoid the turnover charge?
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There will be some offshore companies who will avoid paying, but for a myriad of reasons, Betfair will not take this route.
For starters, their licence to bet in Aust,is 50% controlled by James Packer, the owner of Crown and Burwood casinos. There is no way he would jeopardise, his status as a good corporate citizen. |
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I see. They moved the servers for UK customers to Gib without tarnishing their reputation. Most of the big UK bookies are there and are free to not pay the UK racing levy for their online business. These companies still have a presence on every high street in the UK.
A 1.5% turnover tax will make Betfair unusable for NSW races. If the other states follow then I cannot see how they will make it work going forward. |
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Froggy
In a submission in an earlier court case, Betfair stated that paying 1.5% on turnover, was the equivalent of paying 60% of gross profit. So, Betfair is still making a profit on NSW racing, albeit a much reduced one. I'm guessing they will wait until the dust settles, and see what the other states, plan to do. |
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i good run down of the whole situation by the guys on the punters show yesterday - worth watching
http://www.puntersshow.com.au/index.php?_a=videos&videoId=288 Marc is spot on, black out NSW racing and show them what the real effect is - it has to happen imo the examples of traders are crazy stuff - Betfair is out of pocket every time a trader gets a trade right - it's only on punters that they can wear the 1.5%. Other alternative, that has been highlighted here, is to charge traders differently My call, wait until the the end of the autumn carnival and pull the pin for a bit ACCC / Trade Practices Act are options but going back to court will look terrible for the company |
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castiron, i'm not their accountant but they may be making a gross profit however after admin, advertising costs etc etc they would making a significant net loss on NSW racing.
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Castiron,
I dont know about those figures. Just looking at my figures for last week on Aust racing (dont have NSW split): Total back stakes: ÂŁ262,383.60 Total commission paid : ÂŁ129.53 If racing wants 1.5% of backed stakes Betfair would have to pay them ÂŁ3936 on my bets when they only got ÂŁ130 from me. A 'turnover' charge will have the affect of massively reducing 'turnover' on here. If 'turnover' drops so too will liquidity. The more illiquid Betfair becomes the less people will use it. This will lead to an ever downward spiral. The figures you see under 'total matched' on here have never really told you much. Its just a general guide to the amount of liquidity in the market. Anyone who wanted to damage Betfair could just self-match bets on NSW racing and thus giving them a 1.5% liability on the backs with no commission if the bets are scratched out. This charge is likely destroy Betfair as we know it and end up producing racing less income not more from exchanges. |
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obviously unsustainable Frog - question is, how much extra would you be willing to pay???
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Wombleoz, a turnover charge completely destroys exchanges. A punter who is a straight backer on 2% commission betting on even money shots pays about 1% of turnover in commission. Bet on odds on shots and it is much lower. To cover betfair costs commission would have to massively increase on straight backers and traders would have to go. The only way to do this is to have commission based on turnover not net winnings per Market. Do this and about 80 to 90 perc of liquidity goes overnight.
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sounds spot on Frog - and is possibly why they are increasing fixed odds services - i.e. Tote Extra - so they can offset the two against each other but in the end it's just not sustainable a turnover basis
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And it's precisely why a very shrewd (I can think of another word) Racing NSW brought this legislation in back in 2008. It was to destroy Betfair.
Betfair argued its case on S92 of the constitution...and as very much a 'layperson' the anti-competitive provisions of the ACCC would appear to me to be a better avenue. But I don't know if their last bolt is shot... |
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In the fair dinkum department BF's turnover is only the % they take !! A bookie takes the whole amount when someone loses. BF get a %. To tax them on the whole amount is against the constitution, its aginst the you know.... just the VIBE... should've had Dennis DEnuto on the case.
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Agree with wombleoz, pull the pin and lets see the figures. Just figured why Dominic only did Caulfield this week. Throw some money at Dallas and get some official punters representation going. Wasted a whole lot more on lawyers so far.
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RVL's figures suggest a turnover tax would raise only 1 million extra over a profits tax. They must be using a different method of working out turnover than NSW then?
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I think that's spin Joel...or their modelling isn't too good!
Great pick up Harry re Dominic B. That doesn't bode well...it's only a small thing, but it now looks a lot, lot bigger to me... |
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And let's not forget the CEO left earlier this year.
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For anyone interested, some of Dominic Beirne's thoughts for Rosehill Saturday at www.rsn.net.au/downloads Winners Thursday 5th April.
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I think the fact that RVL actually seem to like Betfair these days is a good thing, they would probably work something out with them to ensure it's benificial to both parties. I think SA's & QLD's relationship is not bad either. Not so sure about WA but if they can continue to operate, just without NSW it wouldn't be so bad.
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agree Joel. only thing that worried me was Rob Hines saying that whilst they support Gross it would be good for uniformity if the same approach was national...and then going onto say BF may have to change its model...or words to that effect.
I guess it's all speculation till we hear what's going on behind the scenes. Not much fun though waiting. |
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any chance they pull the pin .. just before the races start tomorrow?
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dont think so Nick.
That would stuff us {their customers] around too much. I want em to do it.But we need some notice. |