The new premium charge and long term winners.

Its not in punters interests for betting on here to end up as a derivative of the casino which seems to be where it is heading at the moment; though it clearly would be in to BF's advantage for this to happen.

If theres a chain reaction with other companies taking a similar stance it could be the end of betting as we know it and no realistic prospect of any long term winning strategy surely.

Oh just what we need.
A new thread focussing on the ins and outs of the new PC.
Aren't there enough threads up on here already no moves.?
All this does is split all the contributors up and, if anything, weakens the strenghth of any concerted protest.
Or do you disagree ?

Has it occurred to anyone that the hmrc are looking into this area with great interest

Betfair now have a way of providing data on long term winners/full timers

This PC could be the tip of the iceberg

as regards HMRC
1. Now 40% of profits is already in their net, including much that previously was overseas
2. The case law is well established and primary legislation is fraught with difficulties. Sure they can tack a clause or two on a Finance Bill easily enough, but it's a complex issue and difficult to get right.
3, Most winners are pretty mobile. Personally I own property abroad and I can sell my house here and move overseas in 2 months if necessary. I could still spend 90 days a year in the UK and as I spend about 300 days a year glued to the screen it would be no problem for me to move. To a country that is a lot more friendly than England.

Who is likely to pay the new premium charge?

Surely not straight out punters who bet on events prior to the start in good liquitity markets and dont trade out E.g. football matches and English horse racing.  If you were successfull enough on this type of event to pay the tax you'd surely do your betting at the other exchange.

Layers dont look likely to be too vunerable if they layed only the bets of the punters talked about above, surely they could use the purple place too.

Anybody laying in events other than football matches, golf tournaments, tennis matches, or British horse racing before the off may find the pickings very thin on the purple place and be forced to stay with Betfair.

Same goes for the punters on these events theye'd have to stay with Betfair because of they low liquidity levels on these bets on the other exchange. i don't think you could turn to the bookmkers! Its my belief theye'd have long told you to Feck off before you'd won anything like £250,000 with them.

In play...I believe this is where a lot of both punters and layers will be hit with little possibility of being matched in running on the other low liquidity exchange in many sports.

I have read about another category of punters on here who make a profit from the quirks in the exchange possibily using models invented to gain a profit on the stock exchange by accuretly  reacting to the flow of money being processed in order to gain a profit. I get a hunch that many of these maybe adversly affected, if a small percentage profit can be gained by this method E.g. Say you found an industrial process which you turn one element into another element but as consequence of this manufacturing process you produced a by-product, which you could sell, surely as long as the process continues you'd continue to gain the vluable by-product I.e. in Betfairs case an almost guaranteed profit for these people.

Its an odd curiosity of human behavior that Betfair is almost certainly giving a worse deal to its customers than the Purple place but will people move over their on mass I think its highly unlikely. Why don't people simply move when their getting obviously less for what could become the same product? I dont know! maybe it would make a good sociology study about the pack like behavior of our species.

The exchange will suggest  because it only concerns long term winners with Betfair and almost everybody loses anyway its almost errelevnt,  but thats like saying almost nobody wins the lottery so weve decided to scrap the prize, just keep buying the lottery, no no it doesn't matter about the jackpot because almost nobody wins anyway, theyed reason.

but the question must be for the punter if you can't win what's the point of Befair?

good post

If people won't change their betting habits yes they probably will have to stay, it depends how hard they want to work at it doesnt it really at the end of the day.

I think in betting you hear the successful people say you are always having to raise your game and adapt so suppose the people who have been one trick ponies for so long have done well out of it until now.

Time to start adding a few other strings to those bows or pay the penalty!!

FINE AS FROG HAIR
30 Jun 11 23:04
Joined:  12 Mar 07 | Topic/replies: 2,727 | Blogger: FINE AS FROG HAIR's blog
Oh just what we need.
A new thread focussing on the ins and outs of the new PC.
Aren't there enough threads up on here already no moves.?
All this does is split all the contributors up and, if anything, weakens the strenghth of any concerted protest.
Or do you disagree ?

A bit rich considering you have contributed [?] in every single one.

You often hear for example "traders have to do this or traders have to do that" but you need other angles to fall back on surely, this is what I've been trying to master over the last few years and think I am in a position where I can bob and weave a bit, albeit for much lesser sums than some have made in their time on here.

Though won't be much use if the whole gambling industry becomes like one big roulette wheel in 10 to 15 years time with this being the catalyst of it.

no moves Joined: 24 Feb 04
Replies: 1110 02 Jul 11 00:31 
Who is likely to pay the new premium charge?



but the question must be for the punter if you can't win what's the point of Befair?


Betfair has figured out that the average punter (and we're talking about 500,000-odd users, apparently ) doesn't think that way. The average punter only thinks: "Will this bet win, right now?". And if the bet wins, the average punter happily accepts his winnings, less 5% or so, and moves on to his next bet. A decade of forum posts has illustrated that fact in the clearest possible way.

And the PC charge, right from day one, has been designed to allow those punters to lose their cash less slowly than they previously did, thus generating far greater overall commissions than any PC will generate. At 20%, it wasn't effective enough in doing so, hence the latest hike. Betfair saying "almost everybody loses" is not irrelevant; it's fundamental to the PC debate. Betfair will gain far more from losers losing more slowly (as an indirect result of the PC) than they will ever glean from PC charges on a limited number of individuals.

So why not just do what they said originally and attract a shed more losers?

And to say that you now can't possibly win on BF is just plain wrong.
After all the PC is a % of gross profit, which itself is just wins minus losses without any charges.
If you have a winning strategy you will still win, only you will win less profutability wise, not even necessarily less absolutely, if you can scale up.

At some stage you  will surely start to run out of new losers to attract ?
The key seems to make it more likely that losers will lose more slowly.
Big winners stripping the pot daily does not help matters one bit.

Betfair "winners welcome"....

I don't see Ladbrokes or 35 running out of 103% losers

365*

Rocket, they've gone from 100 users to half a million in 11 years - I'd say their overall marketing strategy has done pretty darned well. The PC was peddled as being beneficial to PC payers, existing and potential, by attracting more 'losers', but now we're seeing a rather different overall picture emerging as far as who the real beneficiaries are. (Betfair, and, to a lesser extent, the existing and new 'losers').

Wee Mac
I don't think the founders of BF had the slighest idea how the exchange would develop into a money making machine for a small core of shrewdies.
Iy is simply unsustainable in its current form.

Wee Mac that was the point of my post.

FAFH, in 1999 I think it was, when I first read of an online facility which would allow me to lay prices to others, I quite literally jumped out of my chair; it was one of those 'JFK' moments. I would almost certainly have sat down again pretty sharpish had I realised that I would end up outside this elite cabal of money-making machines subject to PC. So no, to my shame, I didn't see it coming either.

That said, I wouldn't at all say the current situation is unsustainable - it's just far more profitable for BF to do what they've done.

OK rocket, picked you up wrong.

Well I think it's probably unsustainable.
I mean where does the greed of these winners end.
Some of them are literally making returns on capial in the tens of thousands percent pa.
That's totally unreal.
Never in the history of finance have such money making opportunities lasted very long.
Many of these guys just operate out of their homes.
And apparently they're not even exposing themselves to any real risk of losing.
Totally unsustainable, if you expect the mass of losing punters to continue to fund them day in day out.

Totally unsustainable, if you expect the mass of losing punters to continue to fund them day in day out.

Instead of losing money to bookmakers, the mugs are losing money to shrewd operators on betfair, unsustainable, really?

You clearly havent got a clue what you're talking about mr frog and your last post is just total nonsense

FINE AS FROG HAIR Joined: 12 Mar 07
Replies: 2737 02 Jul 11 01:40 

Totally unsustainable, if you expect the mass of losing punters to continue to fund them day in day out.


You'd think so, and yet that's exactly what losing punters have been doing with bookmakers for over 100 years.

I don't think BF have looked at these 'thousands of percent ROI' winners and thought "Hey, we want some of that action." Instead, they've seen the effect it's had on the myriad losers, and thought "Hey, we want more of THEIR action". That's what this is all about.

Bluenose
I used to argue myself till I had a blue face challenging the results put up by cetain posters.
Then I accepted eventually that they were not all false claims of success.
Do you know otherwise ?

Maybe you are right Wee Mac because bookmaking establishments have been around for about 50 years, I heard some suggestion that 99% of long term users of bookies lose.

You'd have thought the penny would  have dropped about the unlikely nature of being succcessfull in these offices but people keep returning every day. You write wee mac that the average gambler is only concerned about the next bet and isn't really focused or interested on long term profitibility.

Maybe thats what Betfair have cottoned on to... "all punters are mugs", perhaps that is their mission statement pinned up on the wall at the annual general meeting of the board of directors.

Spot on Wee Mac.

NAIL ON THE HEAD.

Someone at Betfair Towers, I suspect MrB, has resented the fact this beautiful exchange is giving winners a free ride, and he's seen bookmakers and seen that the winning punters are taking money off the losing punters, not happy with being the middle man taking a small cut, as it was always promoted as, they decided to up their cut significantly, 2 years on, they want a bigger piece of the pie.

It's not about BF getting a bigger slice of the pie, it's about getting the average losing punters hanging around longer for the benefit of all net winners.

You mean for the (churning commission) benefit of betfair? Their finance director said exactly that at the presentation on Wednesday.

Betfair have openly and publicly said they intend to increase their commission take from overall losers - so why all the confusion as to what's going on here? If the losers' money ends up with the 'elite winners' too quickly, then BF will bash them with PC to force them out (my words, not theirs). Whether the PC payers stay or go, BF will gain more overall commission (and PC!!).

Muddy waters indeed Wee Mac.

FINE AS FROG HAIR
Date Joined: 12 Mar 07
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When: 02 Jul 11 01:59
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It's not about BF getting a bigger slice of the pie, it's about getting the average losing punters hanging around longer for the benefit of all net winners.


It's not about getting the average losing punters hanging around longer for the benefit of all net winners, it's about Betfair looking at traditional bookmakers and thinking gee, look at how much money they are making.

Betfair's original business model (repeatedly referred to as 'flawed', which is a mind boggling statement really) was based on being a low cost operator creating a platform where punters could get a (much) better deal than elsewhere. It's looking increasingly likely that someone else will have to step into Betfair's shoes to fill this role, as Betfair becomes more and more like a traditional bookmaker, and less and less like an exchange.

Betfair is a business , not some sort of betting utopia.

At least some on this thread understand the position.

It is a Plc and needs to GROW its bottom line. It appears to me that its basic business model can only take the business so far. The exchange has reached saturation point and whilst profits can still be genearated it's struggling to increse these to the next level.Once profits stagnate the share price, which is derived from future profit expectations, will suffer.

What are the options?

Encourage non profitable customers to leave or change their behaviour.

Increse our prices to the users that need our services the most - It's basic business economics.

Move closer to a business model whereby, long term , our customers lose more of their money to us rather than to other users.


The PC achieves all of these.

It is a Plc and needs to GROW its bottom line

Why does it need to GROW it's bottom line. It's not a product where they're able to GROW their bottom line, at least not in a sustainable fashion.

They've expanded to get all the customers they can (In terms of geography, not numbers) as anywhere like the USA are never going to accept them.
They've only got the customers they have because of their selling point of peer to peer betting. Nobody's going to bet on a football match on Betfair for "fun" when Betfair have no high street presence and worse prices than other online bookies who have been around longer.

Holding their position at where they're at should be their top priority.

I'm not saying this doesn't do that by the way, I don't think it does, but it might, I'm just wondering where the hell they think they can grow from!

Lori, they can raise their basic rates of commission e.g. to get a greater share of arbers' 'wallets', as their terminology has it, and to squeeze more cash out of recreational players'.

They can improve their mobile offering to catch a new generation of bettors with the best spot prices.

The new pc is about driving out winners who provide nothing to the exchange in terms of guaranteeing across-the-board prices.

The trouble is that each time they alienate a customer, that's another piece of free advertising they've got to cover in costs.

They can't easily raise commission rates as they're already lagging behind in their prices for many sports and their best selling points are the peer to peer gambling and "best price". If they lose both of those then they have nothing to sell.

Long standing internet bookmakers like Pinny and 5d are slowly but surely offering more and more in play opportunities and more European facing ones too, and Betfair are trying to become less competetive at a time where the marketplace is becoming moreso.

Driving out winners is not the way to retain a p2p betting platform. If they drive those people out and try to replicate their behaviour, they'll find themselves as merely a bookie with a complicated interface, bad prices, and no high street presence.

I don't use phones, but friends who do tell me that the Betfair mobile interface doesn't even work without aps that help you use it.

Lori, they wd argue that their super-winners aren't 'persons'. They are closer to small companies squatting on bf's platform and making more than they're worth in terms of the prices they provide.

If bf have to deal w/ companies providing liquidity, the line will be at least let them deal w/ real ones w/ whom they can draw up service agreements.

My feeling w/ IR betting is that bf has a niche as a wholesale player, while the High St can offer a viable retail product. You see Ray Winstone's lemon face on tv all the time saying 'in-play betting from bet 3.65'. You don't see bf advertising, 'almost always better in-play odds with us' though that's almost always true. This can only be because bet 3.65 are a fantastic client of bf's IR offering.

What you say about the American books' IR offering is interesting and may be right. Someone like me is betting significant amounts as an individual bookie client but hasn't even got accnts. w/ the two books you mention--nor w/ anyone who doesn't do horses.

(In fact, I am almost immediately closed down by Australian operators offering European horse prices b/c I can pick them off, sometimes b/c they are behind bf).

Askari, it's been my belief that the service agreements Betfair draw up with the 'preferred suppliers' always give extra benefit to the supplier rather than to Betfair.

Betting promotion has an agreement with Betfair, and my thinking was that they must be getting a better deal than the rest of us, as they would be free to operate without a special agreement, just like the big winners operating their own accounts.

If Betfair remains an exchange, it seems to me that the little guys cutting the preferred suppliers margins has to be a good thing (for Betfair the company as well as the liquidity on the exchange). If the preferred suppliers can no longer profit as the little guys collectively cut their margins, then they are no longer required anyway. It means liquidity will be fine without them, and I don't see why Betfair would benefit from protecting them.

The Investor, I've given you what I think of as my answer on another thread (it has to do w/ ridding companies like Betting Promotions' markets of good competition in return for guaranteed liquidity).

My suspicion has been that the terms enjoyed by partners or preferred suppliers have been to do w/ market access (all those offers immediately up on football games after the suspend?) or perhaps w/ un-linking subsidiaries' accounts in exchange for liquidity. If the agreements were all in the customers' favour, and someone else cd step in at the front of the market, why wd bf sign all these terms?

I began to form my sense of what was going on w/ the new charges when Bayes posted that Betting Promotions' profit last year was not that great a fraction of my turnover (I heavily bet elsewhere and am never better than 4% (!) on my personal account). Why isn't this big staker winning more? It can only be the pc churners selectively squeezing them out.

@GettingBetter Personally I own property abroad and I can sell my house here and move overseas in 2 months if necessary   Sell your house in 2 months?  Surely not in this economic climate..

Whatever happened to the notion that this is an exchange only, where punters take all the risks with their own money and pay a (reasonable) commission to the operator, which gets a risk free return and a ton of interest on all the deposits and tied up cash, as well as the knock on benefits of site extras, like the casino?... oh well, it was a nice dream.

2.5% for me, now that's value [;)]

1.01 you are the most impressive poster ive read in days. Wonder what the great Karl Marx would think of frog hair

Gomozkov
With a chatname like that, you would probably know better than most ?
Or am I being xenophobic here ?

How many of the people affected by the charges have any risk?

Good question Feck, clearly each bet carries a risk of losing but presumably those affected by the charge have eliminated any risk of going bankrupt as they are making profit and they will be bright enough to stop once it is clear that it is no longer so.

The risks to continued success as I see them are:

Rule changes by betfair adversely affecting your strategy (very topical!)
Competition from others
Changes in the law
Changes to the tax-free status of gambling
Betfair going bust
A large scale competing site starting up which captures a large chunk of the user base - and before your beloved ferengi start I think it's very unlikey that any such organisation would be as accommodating to their fiendish money making ways as betfair is even with the new pc
Betfair removing the api
Betfair removing the facility to lay

All are possible, I believe, and I have always conducted my activity on here on the basis that the end is nigh.  Anyone who believes they have a right to continued profit on here is naively mistaken.
Betfair going bust and being unable to reclaim your bank

Good question Feck, clearly each bet carries a risk of losing but presumably those affected by the charge have eliminated any risk of going bankrupt as they are making profit and they will be bright enough to stop once it is clear that it is no longer so.

The risks to continued success as I see them are:

Rule changes by betfair adversely affecting your strategy (very topical!)
Competition from others
Changes in the law
Changes to the tax-free status of gambling
Betfair going bust
A large scale competing site starting up which captures a large chunk of the user base - and before your beloved ferengi start I think it's very unlikey that any such organisation would be as accommodating to their fiendish money making ways as betfair is even with the new pc
Betfair removing the api
Betfair removing the facility to lay
Betfair going bust and being unable to reclaim your bank

All are possible, I believe, and I have always conducted my activity on here on the basis that the end is nigh.  Anyone who believes they have a right to continued profit on here is naively mistaken.

Theses are your " black Swans" eh Cat ?
Very smart to be thinking in such a strategic manner.
I applaud you.

they are not black swans.

Why not? Black swans are becoming increasingly common!

They were always quite common, they just come out more now because of the film.

People always underestimate how frequent black swans are.

Once I was woken up stung by a wasp ten mins. after my alarm was supposed to go off so that I cd catch an early morning flight.

God, that event helped me as a bettor.

Yep, that would be one for sure.
Certainly an act of God.

The biggest worry for punters is where will Betfair go next.
I thinkl they will lower the threshold for charging their customers to maybe 200k then 100k etc.
The big problem is people lower down who have been improving their return on investment
will know that they now cannot be long term winners as before.
Therefore betfair will become a negative expectation outcome as a trader/layer or backer
or a combination you end up a loser.
Will people spend their short lives on here or maybe move to other forms
of easier money making endevours?