PC4

Exchanges in dominant positions that grossly over-charge have to be careful a rival doesn't use the information in reverse and make an offer like

Sign up with us before dec 20th and we will never charge you more than 5% on the lifetime of your membership, agreed and honored.

Would make a big hole in an overcharging company as its what the competition look for weakness in there rivals services.

(the above statement is only an example of a possible promotional idea and is in no way relevant to any company policy presently.)

e.g. You've won 10 million gross, 1 million net (i.e. you've already paid 90% commission) but you'll still be charged pc.

That's just the equivalent of closing accounts.

Looking at Betting Promotion's figures for 2010:

Gross Betting Profit    £2.44M
Commission            £1.57M
Net Betting Profit    £0.86M
Operating Income    £0.12M

They'd be dead in the water with an increase in charges based on "net" profit. Some smaller players are in a similar situation with Sky, internet, server, programmers and whatever other costs come out of "net" profit.


I know they'll probably be considered a 'main liquidity provider', but so is every else that is making millions and already paying lots of commission. How will they distinguish between them?

The main liquidity providers are those they want to keep in the game at the expense of the 'parasites' making money at a better ratio of comm. to profits.

This is especially so when these people make money on a 'rent-seeking' basis through a botted-up algo strategy.

Otherwise, to me there are close parallels between what they've already done (i.e. re-working the terms of a profit share arrangement) and what you've just suggested.

jump, jump before the ship goes down