General Betting
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Has the PC made betting on Betfair as a serious proposition (i.e. to either make a living or make consistently good profit/side income) unworkable, or at least not worth the effort (in comparison to how it would have been with only commission to factor in)?
Would be interested to know people's views on this, especially those more experienced with the site.
Would be interested to know people's views on this, especially those more experienced with the site.
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PC is supposed to hit big winners who take money out too fast. By and large it doesn't, since they are sharp enough to get around the charge one way or another (although inevitably betfair make more commission from their avoidance activites so they are happy).
Instead it actually hits the smaller winning punters comparatively a lot harder, like all taxes of its ilk. However, of all the customers that pay it, not one would be missed by betfair for more than a few days if they went away permanently. IMO. If tax rates go up 20% does it mean its not worth working anymore? No, it means you either 1) get a better job 2) work harder 3) Move abroad/elsewhere 4) Throw toys out of the pram. All 4 have analogies on here. |
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I make a living on here and I have not yet paid it.
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why does the portal thing come and go, should just leave it up all the time has useful information on it
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pc mostly paid by ir horse players imo... vast majority not getting round it and those that hv might expect a call at the door one day if they dodged it illegally (imo)
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cat u make a living and dont pay it
didnt think that was possible |
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Treble_Underscore 30 Mar 14:20
PC is supposed to hit big winners who take money out too fast. By and large it doesn't, since they are sharp enough to get around the charge one way or another (although inevitably betfair make more commission from their avoidance activites so they are happy). It's certainly not aimed at big winners, unless you think someone that wins £10k in a year is big? In fact the real big winners that pay PC will be better of because the commission generated calculation works in their favour. I believe this is not by accident, but by design. It makes it far easier for low commission payers to devise avoidance strategies, although their total costs will still be far higher than there were prior to the PC. Instead it actually hits the smaller winning punters comparatively a lot harder, like all taxes of its ilk. Very true However, of all the customers that pay it, not one would be missed by betfair for more than a few days if they went away permanently. IMO. I don't buy that at all. First of all the fact that someone pays PC means they now are paying their 'fair share' according to Betfair, so they are just as valuable (if not more so) as a successful bettor who generates just over 20% commission and thus just misses having to pay the PC. Second, let's say hypothetically that the gambling commission ruled that the PC was unfair and could not be implemented (not realistic but bear with me). Do you really think Betfair would have opted to close successful accounts instead? If tax rates go up 20% does it mean its not worth working anymore? No, it means you either 1) get a better job 2) work harder 3) Move abroad/elsewhere 4) Throw toys out of the pram. If the UK decided to increase income tax by a very high % for high earners (as they did do in the 60s) many people would (and did) move abroad. So the question becomes 'how can we raise the most tax, bearing in mind that people do have other options.' The same would apply to Betfair (although the other 'options' are lagging far behind). I think the introduction of PC has worked out well for Betfair as the small exodus of customers has had only a minor effect, whereas the premium charges have boosted betfair's bottom line significantly. While it's true that they have lost a great deal of goodwill from customers, not everyone is against the charges. I'm not too worried about PC. The thing I'm worried about is that it has set a precedent, and Betfair could get greedy in the future, and decide to change the threshold from 20% to 30, 40, 50 or any number they choose. In this case it could indeed mean that 'it's not worth working anymore, or at least it's time to change jobs'. |
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freddiewilliams 30 Mar 16:44
cat u make a living and dont pay it didnt think that was possible Only a small % of winners pay regularly. |
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It's certainly not aimed at big winners, unless you think someone that wins £10k in a year is big? In fact the real big winners that pay PC will be better of because the commission generated calculation works in their favour. I believe this is not by accident, but by design. It makes it far easier for low commission payers to devise avoidance strategies, although their total costs will still be far higher than there were prior to the PC.
You misunderstand what I wrote slightly (through no fault of your own when I re-read what I wrote). I've been told OTR by people at BF that the reason why it was introduced was absolutely because of big winners, a handful of people making serious numbers AND not paying their "fair" 20%. The INCIDENCE of it may well be hitting the smaller guy much more than the bigger guy, but I don't believe they gave that a single thought. I don't think for a second that its had exactly the impact that they predicted that it would. However, of all the customers that pay it, not one would be missed by betfair for more than a few days if they went away permanently. IMO. I don't buy that at all. First of all the fact that someone pays PC means they now are paying their 'fair share' according to Betfair, so they are just as valuable (if not more so) as a successful bettor who generates just over 20% commission and thus just misses having to pay the PC. No. They aren't. They are the least valuable customers to betfair. They STILL take money out of the system too quickly on too regular a basis and do not churn funds, which is all that betfair is interested in. I'd be interested to hear any argument for a PC punter being MORE valuable. Its just not the case. Second, let's say hypothetically that the gambling commission ruled that the PC was unfair and could not be implemented (not realistic but bear with me). Do you really think Betfair would have opted to close successful accounts instead? Pie in the sky. The GC can't even exercise the power to tie their own shoelaces. Any discussion down that route is a waste of time and energy hypothesising IMO. If the UK decided to increase income tax by a very high % for high earners (as they did do in the 60s) many people would (and did) move abroad. So the question becomes 'how can we raise the most tax, bearing in mind that people do have other options.' Indeed. The question is how to maximise revenue. You don't maximise revenue by having tax at 100%. However its extremely unlikely that 20% is the optimum level of such a tax. In fact, they could do worse than tier the system EXACTLY as the tax system is tiered. The same would apply to Betfair (although the other 'options' are lagging far behind). Depends what you bet on and how you bet. Position takers who bet sports other than horse racing have plenty of choice (IMO). Appreciated that's a small percentage of bettors on here (and PC payers). If you are a trader or a horse guy, or a botter, you have basically no alternative. Granted. But "the same" implies that its easy to move "abroad" in this case. For the majority its basically impossible. The only realistic conclusion to draw from that would be that the optimal tax rate here is in fact higher than the tax system because the alternatives are thinner on the ground. I think the introduction of PC has worked out well for Betfair as the small exodus of customers has had only a minor effect, whereas the premium charges have boosted betfair's bottom line significantly. While it's true that they have lost a great deal of goodwill from customers, not everyone is against the charges. I am not aware of any effects of the "exodus". Perhaps some market makers have been dissuaded (I think its been discussed before), but essentially if they desire market makers they can always offer various breaks to people. I haven't seen any figures or evidence that volumes are trending anywhere but upwards - although I'd be happy to be proved wrong. Goodwill is worth nothing since as I say, betfair is in a position where their PC-paying customers need betfair a million times more than betfair needs them. Goodwill and gambling, its a tough concept to marry IMO! If a new platform had been launched one month before BF with 1% commission and double the liquidity of here, with a fully functioning API, this site would have been dead within a week. There's no loyalty. I'm not too worried about PC. The thing I'm worried about is that it has set a precedent, and Betfair could get greedy in the future, and decide to change the threshold from 20% to 30, 40, 50 or any number they choose. In this case it could indeed mean that 'it's not worth working anymore, or at least it's time to change jobs'. Absolutely the natural course of action. However they have already demonstrated their interest in "stealth taxing" people. increased rates of decay, less betfair holidays/commision breaks, more points needed to get down from 5% to lower rates, and finally PC. They haven't as yet (IIRC) made a price increase in the same fashion more than once. Perhaps in october or whenever that time will come. I'd like to see it tiered when it finally does go up again since at least there would be some form of equity for the smaller people who pay PC. |
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No. They aren't. They are the least valuable customers to betfair. They STILL take money out of the system too quickly on too regular a basis and do not churn funds, which is all that betfair is interested in. I'd be interested to hear any argument for a PC punter being MORE valuable. Its just not the case.
___________ While it's not a case , a regular winning punter paying pc can still have a positive impact . 1. Offering decent odds/prices where very low value or worst of all ,no prices were on offer previously. (no interest, therefore a potential player may bugger off elsewhere) 2. Adding volume to a little used market and thus createing more interest . 3. By notifying others of your own success, you are in effect creating a flourishing marketplace of albeit losing punters, who otherwise might have ventured to the bookies (everyone likes to challenge a system see if they can become succesful aswell) |
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Quoting Treble Underscore ^^
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no, it hasn't made it unworkable.
but it has made me go from loving betfair to seeing them as a necessary evil. |
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No. They aren't. They are the least valuable customers to betfair. They STILL take money out of the system too quickly on too regular a basis and do not churn funds, which is all that betfair is interested in. I'd be interested to hear any argument for a PC punter being MORE valuable. Its just not the case.
The things is that not all PC payers do. Personally I've only paid a nominal amount int 2010 so far, but in 2009 I paid it in well over 30 weeks. I've actually deposited more than I've withdrawn. Rather than taking my profit I added to it in order to be able to make even more. It's only in the last three months of 2009 that I started withdrawing, until that time I had compounded my bank and even added to it. As I understand it, I am the exception to the rule here and hardly any PC payers operate like this, but I haven't actually taken ANY money out of the system. The only withdrawals I have made were my own deposits in the first place! If I lost 100% of my balance today, my lifetime profit would be wiped out. Ok a PC payer being more valuable is probably not the case. What is the case is that a PC payer would be better of reaching 20%+ commission generated, as commission payment gives you something back (points that lead to a discount), whereas premium charges are just paying money for nothing (as are all the others, data request, transaction etc.) Paying enough commission to offset all other charges is always preferable. |
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Paying enough commission to offset all other charges is always preferable.
Preferable to the customer. But if the customer is successful in this, it means he saves money and thus betfair loses out on profit. Which leads me to the conclusion that this customer was more profitable to betfair as a PC payer than as a PC avoider, hence the argument that a PC payer could be better for betfair. |
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While it's not a case , a regular winning punter paying pc can still have a positive impact .
1. Offering decent odds/prices where very low value or worst of all ,no prices were on offer previously. (no interest, therefore a potential player may bugger off elsewhere) As a rule they use market makers so that isn't the case. They may or may not be PC payers. The two aren't mutually exclusive. 2. Adding volume to a little used market and thus createing more interest . No different from any other punter - but with their winnings, rather than by churning to make BF more money, they withdraw it as a rule. 3. By notifying others of your own success, you are in effect creating a flourishing marketplace of albeit losing punters, who otherwise might have ventured to the bookies (everyone likes to challenge a system see if they can become succesful aswell) Not going to rubbish the argument outright. But the effect that that would have to be extremely negligible. Also bear in mind I am not contending that none have a positive impact on betfair whatsoever. What I am saying is that they are right at the bottom of the xmas card list, from betfair's point of view. |
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The Investor 30 Mar 18:30
Paying enough commission to offset all other charges is always preferable. Preferable to the customer. But if the customer is successful in this, it means he saves money and thus betfair loses out on profit. Which leads me to the conclusion that this customer was more profitable to betfair as a PC payer than as a PC avoider, hence the argument that a PC payer could be better for betfair. If I win 100k in a year, after commission, and I can do so paying 8k in commission, I'm liable for PC. If I win 100k in a year, after commission, and engineer other "methods" to make sure that I pay 25k+ in commission and thus no PC - where has betfair lost out on profit please? This is the initial flaw in your argument. I'm fairly sure all PC avoiders - and I don't mean those swapping between accounts, who almost always get caught out anyway and in fact end up paying more commission since they start new accounts paying 5%, I'm talking about those who come up with low/zero yield strategies to generate commission primarily. I'd expect the former group to be a much larger group of players in number but much smaller in terms of bets matched/comm paid than the latter group. You are quite correct in your assessment in your above post - you aren't at all typical of a PC payer. Or you are, but one who has not been at the game for a long time, and is still in the bankbuilding phase. Your situation (should you continue to be successful) will be different no doubt in years to come, when your account balance is sufficiently high enough. |
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1. Offering decent odds/prices where very low value or worst of all ,no prices were on offer previously. (no interest, therefore a potential player may bugger off elsewhere)
As a rule they use market makers so that isn't the case. They may or may not be PC payers. The two aren't mutually exclusive. . . . . . . . . . ......... .. . . . . . . . Not many players pay the charge to start with so we can cancel that out , secondly ...as you know ,some markets are completely dead where no markes exist . ______________________________________________________________ 2. Adding volume to a little used market and thus createing more interest . No different from any other punter - but with their winnings, rather than by churning to make BF more money, they withdraw it as a rule. . . . . . . . . . . . . . . . . . . . . . . . . . . . . I disagree, a bigger player with a bigger bank can lay high odds ,something most regualr punters are unable to do. ____________________________________________________- 3. By notifying others of your own success, you are in effect creating a flourishing marketplace of albeit losing punters, who otherwise might have ventured to the bookies (everyone likes to challenge a system see if they can become succesful aswell) Not going to rubbish the argument outright. But the effect that that would have to be extremely negligible . .. . . . . . . . . . . . . . Neither you, nor I know that for certain . |
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If I win 100k in a year, after commission, and engineer other "methods" to make sure that I pay 25k+ in commission and thus no PC - where has betfair lost out on profit please?
I'm referring to legitimate methods as your are (low yield or zero yield strategies). The reason Betfair loses out on profit has to do 1. with the commission generated calculation and 2. with the fact that PC offers no benefits. Let's say someone is paying 2.9% commission + a hefty premium charge which outstrips commission payments. If a zero yield strategy is successfully employed to reduce PC to zero, the total charges this person pays will have decreased and this customer will be receive a higher commission discount to boot (I'm referring to a gross zero yield as the losses through commission will be smaller than the gains through reduced premium charges). Unless you factor in the other people (that you're betting against with your zero yield strategy), the resulting decrease in profit for Betfair is fairly obvious. I believe the other people are already factored in by way of the commission generated calcs. |
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The only reason that you have not answered however is the upside part of the argument.
Your argument assumes that you can fine tune your legitimate method to ONLY take you to 22.5% of gross paid. Of course this is not the case, and also in order to insure against future PC increases etc there is also an incentive to work on further such strategies and build up an improved all time figure over and above 22.5%. Indeed - I dipped to 20.08% and am now at many hundreds of percent. I know others who have done similar and are nowhere near the 20% threshold now. My commission paid has gone up a serious amount (obviously) and the amount of bets and volume I am matching has as well (of course) Also - the biggest payers I am considering are already comfortable 2% punters. So there's no further loss of earnings to betfair in commission discounts. I'm obviously talking about real world situations that I have experienced, some first hand, some second hand. Perhaps you are too. But I can't buy into any argument of PC avoidance strategies (that we have discussed) costing betfair money c.f. people just paying premium charge. They still get their pound of flesh, if not more. |
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Unless you factor in the other people (that you're betting against with your zero yield strategy)
I think its got to be factored in, hasn't it? |
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Perhaps you're right, I would have thought it's factored in by way of commission generated, but perhaps not.
Another thing I 'd like to bring up: Goodwill is worth nothing since as I say, betfair is in a position where their PC-paying customers need betfair a million times more than betfair needs them. I could argue that the same could apply to any consistently highly profitable customers, not just PC payers. For instance someone arbing across markets with a tiny edge repeatedly could make huge profits very consistently and still pay a high level of commission. If such a person has an annual GP of £200,000 and pays 25% of this in commission and Betfair decide that anyone earning over £100,000 need to pay at least 50% they would be just as unlikely to leave as the PC payers. Sure this customer is far more valuable to betfair, but someone making a lot of money with (relatively) little effort isn't likely to give up because of high charges. |
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You could argue that, but what weight would it add to this discussion?
Depends what you mean by highly profitable. If I make betfair 1.5 million a year in commission and win 500k myself, does that make me highly profitable? Where's the grey area? The above matters very little anyway - the basics of what I said still applies. Introduce a new platform, with lower commission, and more liquidity, and that player wouldn't be seen for dust, just like the rest of them. And that's central to what I was saying. Goodwill means nothing in this business. To lose the goodwill of a handful of talented traders/gamblers/arbers/whoever means literally diddly squat. |
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Imv bf do not need winners, esp. not winners of the pc paying variety. They only need winners' tissues.
I think it took them a long time to realise this. |
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I thought perhaps losers were the most important punters to Betfair? I mean if the total of everyones accounts is say 100 million pounds, and punters swap money all week resulting in most accounts being level or slightly down, Betfair would soon gobble up the whole lot by constantly taking 5% from the total, unless losers deposited much needed new money into the system to keep it topped up.
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Treble_Underscore, I wasn't referring to goodwill, just to the fact that highly profitable customers could be charged more (almost) regardless of the % of commission they pay.
Someone that makes a consistent profit and earns say half a million in a year, is likely to stick around if they 'only' earn 400,000 the next year because betfair have decided on an extra charge. This would be true whether this person's total charges are 25% of GP or 50%. The concept of 'fairness' that others have mentioned, is completely irrelevant. Effectively PC payers are charged a % of gross profit. If the commission generated calculation was dropped and they simply looked at commission paid, then commission would literally become irrelevant to a PC payer, and he can simply state '20% of my gross profit goes to Betfair'. It's a slight simplification, but it's close to reality. Effectively then, he is no longer paying commission at all, but simply handing over a fixed% slice of the profit There's really nothing to stop Betfair to introduce any kind of new charge they like as long as they are confident it will not have a negative impact that outweighs the increase in revenue. |
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One thing it has done is stopped me being lazy or loyal.
If I can get a slightly better deal elsewhere, whereas before it was both convenient and polite to keep the bet with betfair, now I take the better deal. It's also stopped me laying in minority markets as I'm not happy with the arrangement where I can get stuck with +1 on half the field and -1 on the other half and pay out 20% on the +1, effectively rendering my lay as a huge gamble. I realise that in the long term I could well offset this against future charges, but with the game getting harder and myself taking some action elsewhere, I won't be paying charges forever (in fact I haven't paid them for some time now), so the last 20% I pay will never come back. |
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iThe problem with PC is that its not about the short term gains betfair have undoubtedly made from 'efficient winning punters'.
Yes, many of them will carry on, though my understanding is that costs are rising and profits dwindling.. PC renmember comes off the 'top line' profit not the 'bottom line' as taxes do.. It is the fact that the whole of the Betfair concept as a massive concept to beat conventional bokkmaking with 'better odds' etc has been damaged... A mixed message of 10% better odds(its never really been 20% better if you took decent odds) but with 20% deducted if successful, is never going to attract the masses. Its not that those punters would probably pay the PC , its that they all naively believe they can be winners.... |
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It is the fact that the whole of the Betfair concept as a massive concept to beat conventional bokkmaking with 'better odds' etc has been damaged... A mixed message of 10% better odds(its never really been 20% better if you took decent odds) but with 20% deducted if successful, is never going to attract the masses.
But has it? Has it really? It's not like the ASA has stepped in and made BF add a rider to all their pie-in-the-sky advertising on better prices. PC is paid by a very small % of the active accounts on here. Its not advertised, apart from by those who pay it and are not happy about it, and quite a few who pay it don't fully understand the charge. The whole 20% better odds is pure spin anyway. P1nny advertise something similar on some markets (as they are entitled to do). The advertising of "best prices" is going on a lot, presumably to confuse the mugs about best price guaranteed, etc etc. If you shop around (I'm talking football), I think its fair to say that even using books that allow professional action, its EXTREMELY unlikely even on 2% commission to get a better price on here by more than 3-4%. If you back rags in horse races, I'm sure you could argue that the percentage is more like 50%. This is where the majority of the "better prices" come from - just like the BFSP spin. regularly its below industry SP after the 5% is borne in mind on any fancied horse - but because of the general constriction at the top of the market, something sent off at 20/1 in the last at lingfield at 80s on here that wins makes a contribution of a 300% better price, even though if you had actually wanted to get on it, your bet would have made a (possibly significant) difference to the SP. The point though is mugs don't shop around. Its a one stop shop and they can feel happy that they are bleeding to death more slowly because of the higher prices (if they even understand that argument, which most of them don't, inevitably). I simply can't buy the argument that the PC is going to stop them attracting new punters. Very few new customers are going to find any discussion of PC anywhere before they set up an account, and a very small % of those will ever be charged it. |
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I think you're wrong on that treble, though I'm not bloody-minded enough to be sure you're wrong.
Basically everyone I know gambles and they know what I do, and they'll often ask me where they should bet, or how I do it, or whatever. A few years ago my answer would immediately have been Betfair along with something saying "You've simply got to use Betfair, you're betting against other customers and the prices are always close to what they should be, so you're only losing your 5% commission on average" or whatever else made sense to them Now, with the combination of PC and also more competetive prices elsewhere, I may still recommend betfair to some of them, but I point out that if they DO end up beating the game, they'll have to pay large chunks of their money out in PC every week and that they're likely better off playing the field. For some of the others obviously there are bookmakers or exchanges that do the job better for some sports. Now, while I don't have a large circle of friends (people who stay indoors gambling every day and talk in numbers tend not to have), I'm reasonably sure that this pattern will be repeated amongst many of the 1500 or whatever it is PC payers, as well as the 1500 people who nearly pay it. I doubt many people recommend betfair more highly because of the PC. |
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I appreciate your points Lori - they do say word of mouth is the best advertising.
Personally my advice to anyone who asks me about betting is for them not to bother! Mine are largely £1-£5 punters, so the min bet would keep them away more than anything else. Can't say before or after PC I would ever have steered them towards betfair, for worry of them getting eaten alive by the sharks. |
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Sound advice... I spent 14 hours a day for 10 years in casinos, so most of mine are a bit larger and more hopeless cases than that ;)
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Ah - tbf the only major advice I have ever given anyone who insists on gambling after not heeding the first warning is find the best price for your bets whatever you do....
indirectly that means for any who are winners that they have to bear PC in mind now of course. Enjoyed the arcade emergency maintenance thread btw, rare to get a real LOL from this forum anymore! |
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I guess the Pr charge has changed me from an enthusiastic advocate of Betfair to something lukewarm.... The exciting 'better for all' message has gone...
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Treble Underscore Mar 31 11: 13
Its not like the ASA has stepped in... Do they ever " step in " if no-one has made a complaint ? |
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Lori 31 Mar 11:59
Sound advice... I spent 14 hours a day for 10 years in casinos, so most of mine are a bit larger and more hopeless cases than that was you doubling up on red :0 |
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Something like that :D
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I keep having to pay PC even though I only win on average £130 a week. Anyone any idea how I can avoid it?
One idea was to just do pure gambling and then I'll obviously end up paying much more than 23% of my total winnings to betfair. Have tried doing that by backing and laying correct scores in football in English league matches Just £2 bets to see how it goes. So far I've made 878 bets and am up £481.88 (£582.19 before com). Obviously that's very good, but on the other hand I was up around that amount after 480 bets. So for the past 400 bets I have made no progress. So don't know if the amount I've won suggests any upward trend or is just purely down to luck. Wish I knew more about stats. |
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One thing that continues to amaze me is the constant whingeing about this.
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Yep, it's amazing that people should moan about betfair taking 20% of their winnings.
I think it should go up to 40% and slapped on anyone who has a winning week. |
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It's approximately 23% of my winnings. I'm not complaining about the PC charge as such. It's the commission rate of 5% which is a killer. Anyone who does pure gambling and comes out ahead in the long term will most likely be paying betfair between 50-100% of all their profits. This is why people need to trade to make a profit.
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