Premium Charge Question

One question though Lori.  If you could make money at 2% why don't you?

I do, I just don't need to donate thousands a week to betfair for the privelege of getting the same prices that are freely available elsewhere. So I stay on 4.8% or something on here and take the 2% bets to the 2% sites (and the 1% site for some sports of course)

As a low margin, small bankroll player myself it just doesn't make sense, even in the mid/long term.
I'd be blowing off a chunk of money just to get to where I'm at anyway.

I don't hate Betfair like I probably come off that I do. I use the site daily and some of my 15235325 posts even discuss gambling on specific events. As a trading in-running platform it's far and away the best out there (although it is slowly being caught by some of the major bookies but only on a tiny number of events) and will be for some time to come.

They're just killing markets that they don't need to kill because they can't compete on 5%.

I was a market maker pre-PC and now I'm not because it's not a viable strategy anymore. On 2% I would be a market maker and I wouldn't need to pay PC either. Many of the markets I used to price up are now empty. There are similar markets that I didn't make that I used to try to bet on that are now also empty, presumably for the same reason.


Do you really think betfair haven't thought of these in the 10 years thay have been going?

Hard to say. Worldwinner has been around longer than Betfair and haven't worked out that their equivalent of PC (levels that they introduced some years ago) completely destroyed their business model.


I actually see no reason why they can't have different commission charges for different states of the game (pre off, in running) as it's the pre-off they are getting uncompetetive on.

Worldwinner, gameaccount, they all thought they knew best. Although, software cheats played a part in driving customers away.

I remember people using algorithms to get impossibly high scores in the game where you click on 3 or more of the same coloured balls, being able to view hidden cards and even being able to get 'what if' lines appear to help them take pool shots. The worst one though was where some people were able to freeze your screen in 2-player mode until your timer ran out and you had to forfeit the game (and entrance fees).

Some interesting thoughts there, Lori.

The idea of having rates vary per market or state is good.  That way they could promote areas where activity is low and cash in more on those where it is high.  I can imagine it might get a bit confusing for the users though and would undoubtedly stimulate some vigorous 'fairness' debates on here ;)

Perhaps something they could pilot?  Let's hope they are watching...

Lori
Am I correct in saying that if you trade out on an event with a profit, you get no implied commission credit.
So if you made a profit of 100 units, paid commission of 5 units, for PC purposes you would be deemed only to have charges paid of 2.5 units ( 5/2), on gross profits of 100 units.
So irrespective of whether you are a high or a low commision payer you would be very vulnerable to PC, unless you have a lot of other trades that go badly to  bring your overall profits down from 100 units to 12.5 units ( 5*2.5) in this example.
That is, if you are trading at a very low success strike rate,that is many more losing trades than winning ones, you might not incur PC, but if not then you're toast.
And those presumably who can and do trade at very high strike/success rates are " abnormal" ( Don't you just love that word ?)

Out of curiosity, what do you do for a living frog hair? You never seem to go to work....

I'm always up for something new to whine about, it's been a while, so I'm all up for it.

(and yes, we'd have to eat 6% in some states/markets... possibly like in running soccer premiership matches. If that meant we got 2% in running darts correct scores and it seemed like they were balancing commission and raising income, it would be a good debate)

2% pre-match darts correct scores of course :)

You're right about the last bit.
Retired at a very young age on an obscene amount of money.
All legal, but not hard earned.

How did u get the money frog?

ok, that makes sense.

Can't go into too much detail as I'm still subject to confidentiality agreements.
But I invented someting, patented it and the rest is history as they say.

You're correct to a degree froggy. The bit you're missing is that my patterns would be able to change.

With a 2% commission level I could place bets that I would have no intention of bothering to trade out of, on mid/low liquidity markets where in running action is sparse. Those markets at the moment have bookmakers operating off about 2% anyway, so there's no way I could have the bet here.

If I could have the bet here on similar rates then I would (moving money around a zillion bookmakers in several currencies isn't the most efficient of beasts)

In that case, my betting pattern would represent "gambler/punter" more than "trader" and my commission level would rise as I'd get credit for my winners and losers, both of which would be bigger than my current winners and losers through trading. (As most events hit a point at some point where the market is "about right" and so you level up the book )

At the moment the "punter" in me (which is a significant portion of my gambling) rarely uses Betfair. That's not beneficial for them, and it's actually not much fun for me either.

frog do u play the football markets?

Only them in fact.

Avocardo, what price do you think you would be to pass a Turing test?

me too

do u do match odds?

*Avocado.

What's a Turing test?

But I play them dispassioately.
I don't care who the teams are or what the prices are within reason.
I have developed an algorithm that takes all the guesswork out.
That fact, plus the benefnit of not having to work for a living, explains largely why I seem to be on this forum at all times of the day.
I sleep and play at all times of the day, according to my own desires. No restrictions at all ( except of course for entertaining my wife as necessary- which is not a chore).

* dispassionately

You got the answer from A that I'm sure you wanted Lori.

Do u bet in play frog?

Sure did Frog!

Nope.
Can't work out how to do that successfully at all.
Not even theoretically, let alone practically.
Don't have the computer programming skills to do quick response betting.

Try to attack it with preparation, rather than with instant reaction FAFH. I certainly can't do it with computer programming (I use the standard interface for instance!)

You mean try to model in advance various outcomes/scenarios, and then have appropriate reactions prepared and pre-planned.
Nice in theory.
But I'm a believer in the statement " If you want to make God laugh, tell him your plans "

yes to all :)

Management his comment just shows his ignorance.

Does anybody think that spreading business around due to PC may make your PCs worse?

If you only bet here when the highest value is here then that makes you even more efficient here and liable to be charged.

Lori Joined: 20 Apr 04
Replies: 23637 15 Oct 10 10:37   


You're correct to a degree froggy. The bit you're missing is that my patterns would be able to change.

With a 2% commission level I could place bets that I would have no intention of bothering to trade out of, on mid/low liquidity markets where in running action is sparse. Those markets at the moment have bookmakers operating off about 2% anyway, so there's no way I could have the bet here.

If I could have the bet here on similar rates then I would (moving money around a zillion bookmakers in several currencies isn't the most efficient of beasts)

In that case, my betting pattern would represent "gambler/punter" more than "trader" and my commission level would rise as I'd get credit for my winners and losers, both of which would be bigger than my current winners and losers through trading. (As most events hit a point at some point where the market is "about right" and so you level up the book )

At the moment the "punter" in me (which is a significant portion of my gambling) rarely uses Betfair. That's not beneficial for them, and it's actually not much fun for me either.

So what value would you put on immediate access to a 2% account with no threat of the PC?

So what value would you put on immediate access to a 2% account with no threat of the PC?

stick it up on ebay and we'll see

certainly upwards of 50k seeing as you'd be able to stay in the game for good

I'd give my left testicle for an account like that.

good idea actually -
betfair want to raise money for the shareholders so they could sell some 2% accounts with no pc
different rates for yearly/lifetime purchases

FINE AS FROG HAIR Joined: 12 Mar 07
Replies: 742 15 Oct 10 10:37   
Can't go into too much detail as I'm still subject to confidentiality agreements.
But I invented someting, patented it and the rest is history as they say.

Was it a comb suitable for amphibians?

Avocado
Joined: 06 May 10
Replies: 2855 15 Oct 10 12:32   
I'd give my left testicle for an account like that. 

You mean half an avocado pair?

Avocado Joined: 06 May 10
Replies: 2856 15 Oct 10 12:32   


I'd give my left testicle for an account like that.

Email me at havealuke at g00glemail . com and see if we can sort something out.

Anything that made people punt rather than trade wd surely be good for bf.

But imv liquidity wd suffer terribly if comm. went to a flat rate. Bets that big liquidity providers and market-makers find profitable at 2% wd no longer be there at the price at 5%. And I do not think the gap wd be filled in its entirety by people like Lori content to bet a bit more.

Would there be enough people out there able and willing to fill the gap?

"Anything that made people punt rather than trade wd surely be good for bf"

More total cobblers spouted. Without traders there would be much less money for punters, why can't you grasp that remarkably simple concept?

Also, think about it logically. Would betfair rather just have gamblers, who by their nature will have lots of variance, they could win a load and leave, or lose a load and go bust, neither of which is good for betfair.

Contrast that with traders, who are much less likely to have huge swings, they may win a little or lose a little depending on how good they are, with betfair picking up a small consistent percentage.

I know which customer I'd rather have given a choice between the two.

Now see if you can actually understand this idea, although I won't hold my breath, as you seem to have picked up Feck's barmy ideology of "gamblers are good, traders are evil"

turtleshead Joined: 01 Jan 05
Replies: 3619 16 Oct 10 00:57 

More total cobblers spouted. Without traders there would be much less money for punters, why can't you grasp that remarkably simple concept?

You seriously believe that??!!

Out of interest does anyone other than turtleshead really believe this?

turtleshead Joined: 01 Jan 05
Replies: 3619 16 Oct 10 00:57

Without traders there would be much less money for punters......

Traders provide liquidity. Punters should be willing to pay a small slice to traders for this altruistic service because without them no bets would ever be matched on betfair. It's a beautiful symbiotic relationship and betfair are seriously jeopardising it with this premium charge

turtleshead, someone else seems to agree that the 'liquidity' provided by traders only intervenes between two bets that position takers could have had between themselves. It's only liquidity if you mean 'liquidity at any point in time'.

Winnning gamblers will pay a higher % of their profits in comm. than winning traders. They cd go on a hot streak and withdraw or retire, but imv it's more likely that they go on betting. It may be that gamblers' greater variance knocks losers out of the market more quickly, though again this cd keep the fish playing for longer.

I wd guess that more important than a gambler/trader difference here is the expectation on each of their bets e.g. if an insider knows that a fancied horse will break with usual tactics and be ridden from the front, then it doesn't matter much whether they trade off their liability. Their bet is still of the sort that will drain the pool too quickly. The pc goes a little way to addressing this, tho' imv bf shd still take a stronger line with those persistently winning on one type of e.g. lay bet.

Betfair was conceived as a mirror image of the Stock Exchange, were horses prices would be traded:  Hence the description of Betfair as a BETTING "EXCHANGE".  Just as in an old fashioned stock exchange, a few market makers would, from making early estimates of a horse's price, trade a horse's price with a bet and a lay price.  These traders would then hope that supply and demand balanced each other out, and that there was, on average, a net profit at the end of the day.  This was (originally) beneficial to gamblers (and one off layers) because the efficiency of the markets were so high and charges were fairly low.
There is no point blaming traders for anything, because they are part of the fabric of the whole thing.  Take away the trader, and the bettor will find that the store is empty.  He will put up his bet on an empty market and hope that someone with a completely opposite view matches his bet. It may or may not happen.  If the PC drives away all the traders, this is what will happen.

It's really quite scary how utterly clueless some on here are. "Winnning gamblers will pay a higher % of their profits in comm. than winning traders." - what utter tripe. Anyone who is good will have a higher than average number of successfull wagers, if they take a guaranteed profit or loss to reduce variance (yes, funnily enough, they will lose some, according to some on here all you have to do is "become a trader" and lots of money flows magically into your account with no effort or skill required whatsoever ) then they are just as likely to pay commission as gamblers, as the only determining factor is the strike rate!

Put simply, good gamblers win, poor gamblers lose, in the same way that good traders win and poor traders lose. Remarkably easy really.

Marksman seems to understand this, unlike most others on here. Where do you think the 20k suddenly appears on Nadal to beat Federer at a particular point during a tennis match? Here is a clue, it comes from a trader. As does the vast majority of money bet on sporting events, especially in running!

"Take away the trader, and the bettor will find that the store is empty.  He will put up his bet on an empty market and hope that someone with a completely opposite view matches his bet. It may or may not happen.  If the PC drives away all the traders, this is what will happen"

Spot on, couldn't have put it better myself. Fine, carry on and drive people away from here because of the pc, it's become very noticable that lots of smaller markets which people specialize in have become virtually empty as there is very little incentive to put money up when you have to pay pc on it. Common sense tells you that no-one pays the pc if they just bet on the likes of Liverpool v Man United each weekend, however a lot of the minor markets are like ghost towns...

Glad you understand what I am saying Turtleshead.
I will give you an example of why traders are useful: Above all (before the pc), I was mostly an antepost layer in the horse racing markets.  There were occasions when I would want to lay a horse (due to finding new info on the web, forming opinions based on interviews with trainers etc.).  Sometimes there would be money, up there, waiting to back a horse.  This could only be from a trader, because no sane (non trading) backer would leave up a back bet in an antepost market.  So I would take his bet and become a position taker (layer)on that market.  I would be hoping that that horse didn't run, or got beaten if it did.  The trader has now made his profit.  I don't resent it. He got there first and turned a quick buck.  He was just doing his job, as I was doing mine.  The trader was useful to me.  In turn I would now help the ante post bettor, who had been checking the prices on oddschecker, and saw that the best value available was on Betfair.  So he benefited,too.  Betfair got commission on every times a horse was backed or layed.  So, in those days before greed set it, they were happy too.  The only people who didn't like it were the traditional high street bookies.  But they really were ripping you people in those days.  Nowadays the antepost markets on Betfair have fallen apart, no one really wants to take any risk, because of the PC. The bookies have been let off the hook.  Betfair is no longer competitive with them in this area.

The P.C also has a negative affect on the sub-conscious,IE, if I win too much I will lose on higher commission..It made little sense for bet-fair to introduce this..Now they are going to float on the stock exchange,it becomes clear.To show their higher profit margins will increase share value..What the share buyer doesn't know,is that,this profit margin was extracted unfairly and another company may usurp Betfair in the long haul..Then Betfair would have to drop PC under competition..This is a though market to break into though and liquidity is king,but sheer greed is the undoing of many a profiteer..Its never to late for redemption and betfair should go back to the pure exchange model.

turtleshead     16 Oct 10 12:26 

It's really quite scary how utterly clueless some on here are. "Winnning gamblers will pay a higher % of their profits in comm. than winning traders." - what utter tripe.

Turtleshead, it's not tripe. A winning position taker would be likely to pay a far higher percentage of their gross profit in commission than a trader of a similar ability.

Take a winning position taker on a commission rate of 3% and a winning trader of a similar ability on a commission rate of 5%. Presume that they are both able to consistently obtain a price of 2.1 on selections that have a 50% probability of winning (correct price 2).

If the position taker placed 100 * £1000 such bets that ran exactly in line with the true probability at the time of bet placement, he would win 50 and lose 50 of those bets. He would make a gross profit of £5000 (55000-50000). He would pay commission of £1650 (0.03*55000) and make a net profit of £3350. 

Presume that the trader also placed 100 * £1000 such bets at 2.1 and was able to lay these bets of at an average price of 2.  Whilst the trader may have losing trades he would also have trades where he was able to lay off at a price below 2. Given the original price obtained and the true probability of each selection winning, the average lay-off price should be approximately 2. Assume that on average he layed off £1050 at 2 for an equal pre-commission profit of £50 on each selection.

The trader would also make a gross profit of £5000 (100*£50). He would pay commission of £250 (0.05*5000) and make a net profit of £4750. I have excluded any possible premium charge payments as you made no reference to the premium charge in your post above.

The position taker would pay 33% of his gross profit in commission, whilst the trader would pay only 5%. The statement that you derided as tripe actually appears to be fairly accurate.

It's absolute nonsense to suggest that traders are somehow less worthy users.  Anyone who places bets adds to liquidity and this can only be to the benefit of pure gamblers.

catfloppo,

Perhaps I'm missing a subtle reference to an earlier post as I don't believe that I suggested any such thing.

i am a trader sometimes i will price a market up fairly on less liquid events that might have no money in them at all guess what they may have been empty for days as soon as i price it up the copycats appear who have no ability to do this for themself.but to get back to my point there was no money in the market before i put money into it so i am not only supplying liquidity for someone to have a bet,i am also helping betfair by doing this as it makes their site better as people can then bet on lesser events.i do not always get all options green so i am taking some risk yet there is still people who claim traders add nothing of value to the site,am i missing something here?

Indeed, I wasn't referring to your post at all :)

Traders, although worthy should still pay commission. I don't believe betfair ever had the intention of targeting people with a particular betting pattern, just those not paying enough commission.

Yes I agree.  The implementation was poor.

"Agreed - although more accurately it targets WINNING customers that THEY have decreed do not pay enough commission"

I'd agree with that to an extent, although I would add that it can easily hit overall tiny winners, and, in some cases, people who can lose!

Any company that genuinely cared about their customers would, given this, have scrapped it and come up with something better and fairer. The fact that they didn't tells you all you need to know.

in some cases, people who can lose!

See Chris Rodgers for details.

I think it depends what type of trader.  Two examples, from Golf:

1) Somebody who lays the entire field in the hope of laying a book of more than 100% and locking in a profit.  It could be said that, effectively, he is just matching up opposing views of other punters and taking a bit for himself, but if he wasn't there Punter A would want to back Woods and Punter B would want to back Mickelson and there would be no money to back.

2) Somebody who waits for a popular tipster to publish his weekly tips, takes all the available money at top price and lays it off at a slightly lower price.  I think we can say in this instance that the two sides would have matched each other anyway, all he's done is taken a bit for himself at the expense of one or both of the other users.

So I'd say example 1 is a trader adding liquidity and example 2 is the more 'parasitic' type that Feck likes to seethe about.

KR, you in the first category by any remote chance

No neither, I don't do any 'trading', I just bet.

allybabe Joined: 23 Nov 05
Replies: 7 15 Oct 10 13:40   


Avocado Joined: 06 May 10
Replies: 2856 15 Oct 10 12:32   


I'd give my left testicle for an account like that.

Email me at havealuke at g00glemail . com and see if we can sort something out.


I find it amazing that so many people are unhappy about paying the PC or change theird prefered betting patterns to avoid it, yet I only received emails from two people interested in the possibility of having a 2% PC free account. Maybe it is all hot air and nobody really pays it!

People seem to talk about traders and market makers as being the same thing.
Are they ?

Traders in the outside financial/commodities are those who trade in and out of positions on a short term basis, rather than holding them for medium/long term. Thet trade on what they as temporary price aberrations.
Shouldn't the same definition apply here.

*--they see as temporary----"

"I find it amazing that so many people are unhappy about paying the PC or change theird prefered betting patterns to avoid it, yet I only received emails from two people interested in the possibility of having a 2% PC free account. Maybe it is all hot air and nobody really pays it!"

Or maybe people aren't too keen on giving their details to a random stranger on a betting forum who has barely posted before in five years of being on, but suddenly claims to have the answer to their problem?

allybabe, sounds very dodgy, and a quick way to get your account suspended.
If Betfair actually allowed such a transfer, I would quite happily pay a few thousand for it.

FAFH, I do not see full bookers as traders. For me they provide copper-bottomed liquidity, as do arbers who put up lays after having taken a price off-site. The people who take/offer prices based on strategies where the price will on average be worse for their counterparties seconds later surely offer bettors the least.

If you bet at equilibrium moments, you tend to be betting your opinion and exposing yourself to a liability. Just like yr financial traders correcting aberrations, this is just what many successful IT traders don't do.

But I am not interested in demonising traders. Imv they are just rational bettors given bf's comm. structure. Thanks to jt49 for setting more clearly than I wd have how trading minimises comm. For horse players like me dealing in bigger prices, the effect is even more marked.

Imv they are just rational bettors given bf's comm. structure.

This pretty much sums it up. The optimal strategy on here is determined by the pricing structure. In a sporting event where there are many points to get off and on, the optimal strategy will almost certainly NOT be taking a straight position, particularly when the price movements are fairly predictable.

Don't worry wrong end of the stick. I'm certainly not'selling' an account.

What are u offering then?

Bayes
The optimal strategy will be the one determined by hindsight most likely.

havealuke at g00glemail . com . I assumed you were one of the 3 (now) that has emailled me.

Sounds like a website for pervs.  The sort of things that the police would set up to catch people who look at child pornography.  By emailing, you will have incriminated yourself.

So allybabe is offering disgusting and illegal child porn? No thanks.

Tell you what allybabe, why don't you get a job instead of trying to flog illegal betfair accounts.

Sick and stupid people

No I was being very sarcastic and I regret saying that. Sorry.

Its not big and not clever to joke about things like that.

Allybabe you're calling people stupid but you're the one on here trying to flog an account. You're desperate and also you shouldn't trying to be selling accounts, especially not on the forum.

allybabe Joined: 23 Nov 05
Replies: 11 17 Oct 10 12:20   

Don't worry wrong end of the stick. I'm certainly not'selling' an account.

No sale OK!

Let's leave it I have enough interested in my propostion who will be giving away a lot less than their left testicle.

I'm reporting you to betfair and the police.

Do you mean the BF police or the real police.
Btw it's generally illegal to trade in body organs also Avocado.

I mean the Betfair Secret Police. If they find out about customers using false accounts they hunt them down and wipe them out.

This thread's got very untidy...

yes and the crime is i only want to bet at evens on the footy but   cant   oh hgetting 25 to 26%   it all ??? to me

SEPTEMBER 2001

Joe Punter: Twenty tenners please.

Betfair Bob: You would be better off putting that on Betfair rather than this betting shop, It could be as much as 40 on there, less 5% comm, gives you over 37/1.

Joe Punter: Really? I will have a look at that.


SEPTEMBER 2008

Joe Punter: Twenty tenners please.

Betfair Bob: You would be better off putting that on Betfair, it could be as much as 40 on there, less your commission, which is your net winnings multiplied by the Market Base Rate, after your Discount Rate is converted from your Betfair Points Total, and applied to the Market Base Rate, unless of course, you have taken a Betfair Holiday, when your Betfair Points will not be credited, so your Discount Rate will remain the same, but you won't be subject to a 15% decay in your Points Total at the end of the week.

However, if you win you may qualify for the Premium Charge of up to 22.5% which is dependant on your forthcoming weekly profit in relation to the commission payable for that week or on a rolling 60 week average, which is when your commission and implied commission is calculated and divided by two, which is ok because it can be offset against the £1000 Premium Charge allowance, and at the end of the week you find out what price you got.

Joe Punter: Twenty tenners please.

I like it.
Moral?
If you can't fly with eagles, go peck sh!t with the chickens.

chrisblues,

I am willing to bet avocados remaining testicle that Joe Punter would never get anywhere near paying premium charge

^
that's not the point.
I'd say this was the most famous post ever made on the betfair forum. Armida I think the guy was called.

i am very much a Joe Punter when it comes to betting on footy  so there fore  the bets are eslewhere due to bad value

have worked out the odds on the footy markets pc payer v bookie odds liquidity wise oh just join the mug punter club  and bet with the bookie  sad i know   but the odds   are beeter  when paying 26%     it all  ????????????????????????????????????????????????????????????

just trade   nowdays    buy + sell  while before  was  betting like there no tommorrow

just like lippy      who said it too     and  he  dont post any more   so i better sssssshhhhhhhhh

before  was  betting like there no tommorrow

Same here.  And now I just wish I had a job and could walk away from all this.

Whatever happened to Lippy.
I had forgotten about him.
Gone back to being a full time postman ?

Lippy got banned.  He is a good egg - posting on the purple last time I had a look there.

Knight Rider,

Have you considered the following: On a day that you are not betting, offer a prices of say evens (or whatever fair odds are) for an over 2.5 goals market, and put up say £50k
Match it on another account. You simultaneously win £50k and lose £50k.
You pay £1k in commission. Commission generated is £1.25k representing a 0.25% return (250 profit over £100k as you have paid £1k in charges, and saved £1.25k in charges)
Do Betfair allow this?

It might seem like peanuts, but imagine you were going on holiday, you could simply log on 5 minutes every day, do such a transaction, and save a few grand in PC over a few weeks, while at the same time negating the effect of the weekly points decay.

Unfortunately that will immediately fall foul of Betfair's money-laundering regulations and you would receive a phone call the next day politely asking you not to do it again.