HOW MANY NOW PAY THE TAX

As has been previously pointed out to you, it isn't a tax.

The number of people who think you work for purple is higher than the number of people who have stopped playing here because of PC.

Do you work for Betfair Fred?

betfair is the best thing since sliced bread. No, I don't work for betfair.

It's blindingly obvious that the smaller, less popular markets which people specialize in (and are therefore likely to pay PC) have much less in liquidity in recent times.

Now why do you think that is?

It doesnt help turtleshead but its just one of a few reasons

As has been previously pointed out to you, it isn't a tax.
.Well FREDDYBOY.Should you ever be clever enough to pay it,what would class it as,a bonus i suppose.

.

Other factors do contribute Clydebank, but the pc is certainly the biggest. Why would anyone put up prices acting as a market maker and risk having to pay up to 20% plus in tax should they have the cheek to have a good run. Of course Betfair are too stupid to see that 5% of a decent amount is better than up to 20% of next to nothing.

I don't buy it turtleshead. Imagine you were making 95k a year then new charges were brought in and now you're only making 78k a year. Would you really stop/reduce your betting on the little markets you specialise in, the markets where your largest edge is at ?

luloo, it certainly would be a bonus, I would be quite happy to pay only 20% of gross P&L in charges!

I was making money from side markets Fred and I stopped in many of them (still operate in some)

The difference is that if you're paying 20% on the small money you can get matched laying a poor liquidity side market instead of 5%, then you can actually get better value at other places (not just exchanges). Value that you'd have no chance of getting if you were only paying 5%.

Betfair is far less viable in low liquidity markets under the PC as you risk having an unbalanced book. A risk that used to be worth the reward but now is not.

I've kept the PC at bay for nearly a year now, but have decided that the time and effort to ensure I don't pay it, isn't worth the bother and I will close my BF account shortly.

As a result BF will see a significant reduction in liquidity in the markets I operate in.

Fred you dont make that sort of money playing low liquidity side markets unless your definition of low liquidity is way different to mine.  Dividing those figures by 10 is much more realistic.

turtleshead they suffer mostly because of parasites, then competition on here, then bookies, then PC charges, and then the recession imo.

I've been doing a particular low liquidity side market off and on for the best part of 8 months.  Without me offering up prices generally the market dies a complete death and nothing but ridculous prices are offered.  If I do the spadework to offer up prices along comes johnny parasite almost straight away and not even one parasite, there will normally be a couple.  That far outweighs any concerns about PC.

Then there is competition, there is more of it.  If you offer prices on low liquidity markets often the market doesnt guide you.  If they were easy to price up generally they wouldnt be low liquidity.  There will likely be another person equally skilled in the market, unwilling to stick up prices because of parasites but ready to pounce if you do and make a mistake.  That far outweighs any concerns about PC.

If you are paying PC it in effect reduces your turnover by 20% (it's calculated on a profit basis but the practical reality is its turnover based) so if you pay PC and play in low liquidity markets, liquidity is even lower.  This obviously means you are less likely to offer prices for them.

FWIW CB, I think the parasites across the entire site are probably only a few people and I think they're making huge amounts of money.

I've found that I can take pennies off them by deliberate mispricing but they're very well built bots and taking more than literally a few quid seems impossible. (As you say, there's too many clever folk about waiting to pounce if you stray more than a fraction out of line. I salute whoever the snooker guy was that helped do over the bot this year though, there were at least 2 and possibly 3 of us in the market not taking fractional edges except off the bot)

Unfortunately though I can't come up with a good moral reason why they shouldn't do what they're doing, but as you say it does put people off pricing up a market and will ultimately kill their income source.

Agree with the above

I used to price up a few low liquidity markets - the market might have nothing in it for 20 minutes, practically the second I put some money up, some bot goes 1 tick higher for the same stake. If I adjust, so do they.
If that happens I just can't be bothered and take all the prices down.
I look back in 10 minutes and the screen is blank

Makes you wonder who's operating these little pests, I know what my guess would be

Can someone explain PC or give me a link to somewhere that does?

Rommie, it's a little further down on a thread called Quick question.

Great, thanks :)

By the looks of it, only traders are ever really going to pay the tax.  It would be impossible to generate less than a 20% fee:profit ratio in the long term by punting wouldn't it?

No it's not. More difficult as a punter or position taker, but certainly not impossible.

And if I may add. You must be among the smartest people on the planet if you managed to read, digest and form an opinion on the charge and then post a reply on it within 3 minutes of me guiding you to the explanation. [:o]

Not particularly smart.  But I am a long-term profitable 'punter' and have a rough idea of what my fee:profit ratio is and it's way above 20%.  The only way I could imagine getting it that low is by trading.  Obviously I knew there were better punters than me out there, I guess I just never realised before how *much* better.

Lori, what bot do you refer to on the snooker?

The tiny correct score one. I've mentioned before that I thought it might be one of yours and I remember it wasn't.
I found a way to get it to price up badly, though I'd rather not post that.

The big match odds guy is another story... I remember you saying that he was very helpful to you laying stuff off. I can now replicate his prices precisely, which is fun. (Though given I do everything manually, it's not as helpful to me as you might think. !)

FWIW I think I probably took you on a few times on close scores. Someone Someone certainly had a view on those that I wasn't in agreement with.

Ah, I very rarely look at the correct scores. Just the match odds and the frame betting generally. I can replicate his prices too, but I don't often agree with them. I didn't do that much of it this year,anyway, as I was away on holiday but there were some very juicy prices available at times.

Fred!
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As has been previously pointed out to you, it isn't a tax.
[...]

Just curious as to how this has been pointed out. It's obviously a 'compulsory contribution', so I think calling it a tax is not unreasonable.

Personally I choose to view it slightly differently: If you are paying less than 17%-27% of GP in commission (depending on your discount rate), you effectively enter into a profit share agreement with Betfair. For practical purposes you could say you stop paying commission altogether. At least if you're on 3% commission or less.

If someone is on exactly 3% commission, they pay exactly 21.5% of GP to Betfair (for all other discount rates the 'profit share' fluctuates within a band determined by the ratio of total market winnings to total market losses). For this person every additional pound of commission paid, reduces Premium Charges by the same amount, as well as giving points that lead to future discounts (no discount points for PC payments).

I've changed my mind a few times on whether the PC is good for Betfair's profitability, and I think it is. Whenever I find flaws, there seem to be good reasons they exist. To point out a couple:

1)
improvement: If PC was deferred until profits were withdrawn, the real issue of 'taking too much money out of the system too fast', would be tackled at the source. Of course a person that makes massive profits and pays a small proportion of GP in commission can't be said to be draining liquidity, if they are constantly redeploying 100% of profits back into the markets and compounding.

Draining of liquidity takes place only when profits are withdrawn, or if they are left in the account unused (which probably doesn't happen much). Furthermore, someone that is compounding profits will become a big customer, and Betfair will make more if they grow faster (PC slows down growth). When I started paying PC in 2008, I was paying about £20 a week in commission. In 2011 I paid more than £250 a week, and in the first quarter of 2011 I was paying nearly £400 a week. Had there been no PC, my profits would have compounded faster, and I would now be paying more commission.

downside: If customers were able to defer large PC payments, there would be two major risks for betfair. The first would be that it would become a little easier for people to 'cheat' and use elaborate schemes to 'lose' money, and the second is that a PC payer might actually have a legitimate massive loss, wiping out the profit Betfair would have made.

2)
improvement: Give commission discount points for PC. As you don't get discount points for PC payments, it would make sense if possible to make 'voluntary commission generated contributions'. A tenner commission generated is worth more to me than a tenner of PC paid, as PC gives no added advantage, whereas commission gives a discount. Anyone that pays a substantial amount of PC, might want to 'convert' this to commission by churning their funds in breakeven (or if possible better) strategies that they would not otherwise use. Pre PC my funds were split 90-99% Betfair 1-10% everything else. Currently it's almost all in Betfair as I'm on about 22% generated, but when I was paying PC, the split was 80/20. The more my charges with Betfair increase, the more I will look for other ways to make money. That is the same for everyone of course, PC payer or not.

downside: It seems many PC payers won't bother with elaborate strategies to minimize costs that have a fairly small overall effect on profitability. Betfair don't 'need' to give discount points for that reason. Data request charges is another weird one. Anyone paying a substantial amount is doing something seriuosly wrong I think, as the factor of commission payments being favourable weighs far more heavily here, and it makes sense for everyone to avoid this as the payoff is huge.


Fred!
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I don't buy it turtleshead. Imagine you were making 95k a year then new charges were brought in and now you're only making 78k a year. Would you really stop/reduce your betting on the little markets you specialise in, the markets where your largest edge is at ?

luloo, it certainly would be a bonus, I would be quite happy to pay only 20% of gross P&L in charges!


There are a couple of important factors to consider here. The first is what would you make doing something else (if you are betting full time). Some might be happy with £10k a year or less, others wouldn't bother if they made less than £100k.

What's also important to remember is that many big winners will have big costs associated with their betting. Someone that is making £500k a year, might not just be sitting behind a laptop on his sofa placing a few bets. He could be employing people, and spending a small fortune on technology. If someone makes a £500k GP on betfair and has £300k of costs other than comm/pc, you can see how massively PC could cut into profits.

Of course anyone is going to say 'I would be quite happy to pay only x in charges if they are paying more than x! I would be quite happy to pay only 17.5% in charges, as some on here do!

My 1st real payday of the year and betfair nabbed a fair proportion of it today

I don't really understand the idea of the so called parasites meaning a lack of liquidity on smaller markets.

These have been around ever since betfair started. They also occur on high liquidity markets, that is how the spreads tighten until you get a 100.4% show with decent amounts available! You start by offering 1.3, somone else jumps you by going 1.32, and that keeps happening until the market settles at around the correct price of 1.55 where you get big sums avaiable.

Surely if someone can get a few prices accepted on a low liquidity market which are fairly near the true price, they will do so, however, it's pretty clear that a decent run will see you getting clobbered with the pc tax with no rebates should you then hit a bad run, meaning for many it won't be worth taking the time to bother and take the risk.

PC is miles more of a factor than these so called parasites on these smaller low liquidity markets. After all if everyone bet on Arsenal v Chelsea and Liverpool v Man United, and virtually nothing else, how much pc would betfair collect? The short answer is almost, if not actually, zero.

That's why betfair are being so thick as to persist with this ridiculous tax.

There are numerous markets in which it is pointless putting in a bet unless it is to take what is on the board. I'm not sure how that kind of monopoly is beneficial to liquidity. As someone mentioned earlier, there's no point putting up bets that are immediately covered, where there is no possibility of a match. Create circumstances like this and the market never develops and no one uses it. Markets that could potentially generate revenue and income are blunted by encouraging a monopoly and frustrating and boring the majority. Instead people will just go where they don't have to mess around for 10 mins stretching a topping bot out of its 180% book.

It seems many PC payers won't bother with elaborate strategies to minimize costs that have a fairly small overall effect on profitability.

It surprises me that more don't. Or perhaps the ones that do, don't talk about it here.

There is one other very significant consequence for BF that never seems to get mentioned here. Which is that BF makes very substantial revenue from account balances. I can get 6.5% in a savings account in Oz. So in effect rather than the PC costing me 20% of my profits, I am losing 26.5% (I realize you can't simply add these 2 numbers together).

The PC combined with the lost interest has convinced me It's no longer worth the bother.

Unless I can get a bot to do what I currently do manually. Less bother and I can build in PC mitigation.

The Investor
What's also important to remember is that many big winners will have big costs associated with their betting. Someone that is making £500k a year, might not just be sitting behind a laptop on his sofa placing a few bets. He could be employing people, and spending a small fortune on technology. If someone makes a £500k GP on betfair and has £300k of costs other than comm/pc, you can see how massively PC could cut into profits.

If I made £500k GP on betfair and had £300k of costs other than comm/pc I wouldn't be here, my money would have gone.

I see what you mean though. Somebody could have built up a market-making business which although having a costly infrastructure, and which, despite the actions of parasitic bots, from a business perspective apparently had a reasonable profit margin. A margin that could feasibly have been decimated by PC.

From my perspective as an individual without costs, free money is free money and 80% of free money is still free money.

they did fine for so many years and did well without the pc charge

if another site came good ie betquack ... they be no one left here an then theyd have to get rid of it again

they have a complete monopoly

as with almost anything ... things change .... but id never like to delude myself an think its always for the best

Fred, I think I speak for plenty others when I say - Where is all this free money you are talking about ?

Mostly horse and dog markets for me. The money is captive at first, but by using techniques such as backing high and laying low, it's often possible to liberate it

aintbrokedontfixit phoenix ashes

If there is so much free money around, why do you pay more than 20 % of your GP in commission ?

First its not a tax,now freddy is telling me there is free money on betfair.Can some one find me a room and lock me and freddy in for a day or two.

Eddie, I haven't actually said at any point that there is lots of free money around. Perhaps I see it as free money because it comes from a hobby rather than a job. I pay more than 20% because I'm not very efficient.

luloo, sounds a bit kinky, what have you got in mind?

must be loads paying,and loads that refuse to pay,hence the poor markets

VERY SOON EVERYONE WILL PAY

Everyone's a winner now eh ?

FROG--not at tall complete opposite everyone will become a loser,now work that one out.

Beats me Luloo.
Can't see how net winners who currently pay charges in excess of the PC threshold can ever turn into net losers.
What am I missing here ?

well son if i win 1000 aweek then get hit some new charge i would think i am losing whatever the new charge is

There lies the difference in approaches/attitude perhaps.
If the net result is still better than any alternative way of utilising that particular portion of my capital, then I would still view it all as a win.

ok fair enough every one has there own thoughts,but i have been playing on here since day one,and where as they needed me in the early days,it justs seems they are trying to --f--k me now

Luloo
Sounds very unfortunate and distressing. My fullest sympaties to your predicament.
Is there no, at least half way, solution at all ?
I have found in virtually all the strategies I currently use, or have even discarded, various compromises can be struck with the BF charges system, even if it is perhaps a somewhat fluid, unfair, poorly designed, one sided animal.

Frog the tax has cost many workmen there jobs,i used to employ 5 myself but the tax put a stop to it.Of course i have looked at ways of beating it,but they all have there downside,it just seems to me that they no longer wish to be a p-p site and do not want to accomadate winners.i personnlly do not need or want your sympany-but perhaps the lads that are now out of work do--thanks to the tax.

Welcome back to the asylum FAFH.

luloo, did you employ 5 people to work for you on here?

Not really back Fred.
Just a flleting jump back in to reassure people I'm still reading if not posting.
I'm sure that will be a comfort to many.

luloo, did you employ 5 people to work for you on here?
WELL FRED I THINK THEY USED TO WORK AT TESCO ON THE NIGHT SHIFT,WHERE DO YOU THINK THEY WORKED,LULOO IS RIGHT THE SO CALLED TAX HAS AFFECTED EVERY ONE,WORKMEN LOSE THERE JOBS,NO DOUGH ABOUT NOW LIKE THERE USED TO BE,SO ITS MUCH HARDER TO GET MATCHED,SOME MARKETS ARE A JOKE NOW,WHEREAS BEFORE THE TAX ANYONE COULD HAVE A BET.THE SHARE PRICE SAYS IT ALL,SOMETHING IS NOT RIGHT.

freddy,your unlucky,betfair used to be the best,since the bread,but your 9 years to late

Yeah I wish I had been here in the early days and known then what I know now.

It's still ok though. I'm currently purchasing a house with some of the money that I have won.

I WISH AS WELL,THEN I AM SURE I WOULD HAVE A LITTLE MORE

Any new payers this week

all you newbies must be haveing nightmares

Presumably the newbies will be looking to make a profit under the existing commission structure rather than the one that existed two years ago.