Premium Charge newbie questions

kicks in after 250 markets played and 1000 allowance used up IF your commission paid (implied) is less that 20%

if the above applied on the weeks above then you could still be liable to pay PC

Delta has point 1 correct apart from it's 20 % of commission generated which is made up from your paid commission and implied commission(3 % of all your losses).It would roughly be if your paid commission is less than 22 % of your gross profit.
In your scenario under point 2 you would only pay PC for the first week.

Eddie,

I believe that there are circumstances under which the original poster could also pay the premium charge in week 3 in the example he provided above. This would apply if for any reason his lifetime total charges generated, including premium charges, remained below 20% of his lifetime gross profit.

I believe that this can occur as result of previously having made profits on which the premium charge would have applied but wasn't paid due to the either the £1000 allowance or the minimum 250 market threshold.

Example (of someone who joined after, or placed no bets prior to, the introduction of the PC):

Lifetime Profile (as at end week x):

Markets: 249
Lifetime Wins: £20000
Lifetime Losses: £0
Gross Profit: £20000
Commission Paid (Rate 5% consistently): £1000
Implied Commission: £0
Other Charges: £0
Total Charges Generated (excluding PC): £500
Premium Charges Paid/Credited = £0
Total Charges (including PC): £500


Week x+1 (weekly stats):
Markets: 250+
Wins: £500
Losses: 0
Gross Profit: £500
Commission Paid: £25
Implied Commission: £0
Other Charges: £0
Total Charges Generated (excluding PC): £12.50
Maximum possible Premium Charge: £87.50


Week x+2 (weekly stats):

Wins: £0
Losses: -£500
Gross Profit: -£500
Commission Paid: £0
Implied Commission: £15
Other Charges: £0
Total Charges Generated (excluding PC): £7.50
Maximum possible Premium Charge: £0


Week x+3 (weekly stats):

Wins: £500
Losses: 0
Gross Profit: £500
Commission Paid: £25
Implied Commission: £0
Other Charges: £0
Total Charges Generated (excluding PC): £12.50
Maximum possible Premium Charge: £87.50


Lifetime Profile (week x+3):

Markets: 250+
Lifetime Wins: £21000
Lifetime Losses: -£500
Gross Profit: £20500
Commission Paid (Rate 5% consistently): £1050
Implied Commission: £15
Other Charges: £0
Total Charges Generated (excluding PC): £532.50
Premium Charges Paid/Credited (excluding last week) = £87.50
Total Charges (including PC excluding last week): £620 (3.02% = 620/20500)
Max possible Premium Charge = £3480 (0.2*20500-620) 

Therefore, full liability to the weekly based PC of £87.50 as can be seen by reviewing the Lifetime Profile.


* "wasn't paid" - wasn't paid or otherwise credited as having been paid.

Hi there JT45. Couple of quick questions.

Why would the full max poss premium charge of £3480 (or there abouts) kick in at week x + 3 and not week x + 1?

You also mention "..having made profits on which the premium charge would have applied but wasn't paid due to the either the £1000 allowance..". I had always assumed that the £1000 allowance was a permanent allowance and would remain in place even once you hit pc territory. Is this not the case or am I being a bit thick and you are saying something else which i am not getting?

Cheers

It doesn't kick in, you're confused (as was I initially) by week x+ 3 appearing twice in his figures, once as a rolling weekly summmary, once as a lifetime total

Also the pre allowance isn't really a permanent allowance, and it's not being explained well either above.

The preallowance is more like £1k they stick in a side bank for you, like a money off voucher, for premium charge. Once you cross the territory to pay PC, it starts getting taken from your invisible bank/voucher. It won't not be touched weeks you wouldnt pay PC, but weeks you would pay PC, it's taken instead of your money. Eventually, it gets to zero, and you start ACTUALLY paying PC, and that's that. See? It's this that makes it a requrement to have earned/won blah blah before paying it.

The maths just then falls out that you pay PC from then on at the 20% BUT the first 1k happened to have been paid for you.

To make that clear it IS permanent, in the sense you don't have to pay back the preallowance, you just need to think of it, as your first 1k of PC was paid for you by a magical mystery friend.

Hello again U.A.,

My post was in response to Eddie's post in which he appeared to suggest that no PC would be due to be paid by ÖÐÎÄÂÛ̳ in week 3 given his gross profit pattern of that week and the previous two weeks.

My example was for the purpose of demonstrating that there could be circumstances under which someone with the OP's stated weekly profit figures could be liable to the Premium Charge in each of the weeks he made a gross profit despite making a gross profit of £0 over the entirety of the given period.

In my example, I'd stated the lifetime position immediately prior to week x+1 and on that basis I didn't see any great need to produce the lifetime profiles figures for week x+1 and week x+2.

The maximum possible premium charge based on the lifetime profile in week x+1 would be £3587.50 (20500*0.2 - 512.5). It's of no relevance as the  maximum weekly premium charge is significantly lower and there was no dispute that PC would be liable in week 1 (week x+1 in my example).

I stated the lifetime profile figures for week x+3 solely to show that, for someone under the circumstances of my example, the weekly gross profit based PC charge of £87.50 would be applicable and charged.


You also mention "..having made profits on which the premium charge would have applied but wasn't paid due to the either the £1000 allowance..". I had always assumed that the £1000 allowance was a permanent allowance and would remain in place even once you hit pc territory. Is this not the case or am I being a bit thick and you are saying something else which i am not getting? 


For simplicity, take the example of a new user. Any premium charges due to be paid would initially be set against the £1000 allowance and the allowance remaining would be reduced accordingly. Once the allowance is used in full, that's it.

If you are suggesting that there may be inconsistencies with the £1000 premium charge allowance and the 250 market rule in my example above, then that's possible. I can't be bothered analysing it further at this time.

I can state with great confidence that anybody who joined after the introduction of the original Premium Charge can be in the situation where the difference between 20% their lifetime gross profit and total charges can be significantly higher than the difference between 20% of their weekly gross profit and total charges generated that week.

As a result they can make a gross loss of £500 in week x followed by a gross profit of £500 in week 2 and yet be fully liable to the Premium Charge that week. That wouldn't apply to anyone who's lifetime charges had reached, exceeded or been set to 20% of their gross profit prior to week x.

*As a result they can make a gross loss of £500 in week x followed by a gross profit of £500 in week 2...

As a result they can make a gross loss of £500 in week x followed by a gross profit of £500 in the following week..

And betfair think these charges are the way forward.No wonder they struggle to get new customers with such a rediculously complicated system.They must revise this urgently and make it very easy for new and old customers to understand.

sorry-ridiculous

Thanks for this. My main query concerning the £1000 allowance was driven by the fact that i've got about £26 left on it and so once it's gone whether there is a possibility of any hidden charge as this allowance was only temporary.

It appears that i have the answer I was after (hoping for). As for endlessly studying all the various permutations of the the pc, that's not for me, only the permutations that may affect me.

I am a newbie to this PC thing sadly since a couple of weeks. Actually in theory I think I can sort of accept when nearly 20% is taken away from my profits but my problem is the issue discussed here that those weeks in red are not (as far as I understand) compensated in any way. It happens me all the time that some occasional weeks are very red while on monthly basis green is the norm. Therefore, I estimate that instead of losing nearly 20% of the wins (in case I can stay profitable which as such is never a certaintly) I will end up losing about 30-40% or even more of the wins on yearly basis. And this also leads to increased carefulness and thus less betting and less everything.

Do anyone feel they share this problem? Any advice also would be appreciated though I do not expect there is much to say really. I can foresee the end of this business for me at some point but for some time I will keep going on.

One of the very real inequities of the PC, to which I have not yet read any viable solutions unfortunately.

abc12,

From the point at which your lifetime charges reach 20% of your lifetime gross profit you will in effect be "compensated". This will be as a result of not having to pay the premium charge on all or a portion of your weekly gross profits following a week or weeks in which you make a gross loss.

This assumes that you continue to remain profitable overall in future weeks. Of course, if you happen to make a large gross loss and don't accrue further gross profits equal to or in excess of that amount you will never be fully compensated.

What often appears to be missed by long standing premium charge payers, whom I believe all had their lifetime charges set to at least 20% of their lifetime gross profit when the premium charge was introduced, is that new premium charge payers may be in the position where their lifetime charges are significantly less than 20% of their lifetime gross profit.

Prior to the point when your lifetime charges first reach 20% of your lifetime gross profit you will not be compensated in any way for your losing weeks.

See.Simple,isn't it!!!               (NOT)

Currently nothing suggests that my lifetime charges will expand so much that they would begin to reduce my PC any time soon. Obviously if I start to do badly in long-term this could happen but my feeling is that in that case I would not be here anymore. Probably what Fine as Frog Hair said summons my feelings. Those here who are really succesful do not have to worry about this weekly thing. I personally do not have any techincal or other edge such as fast pics, automated betting or else so I do have to worry about this. On the contrary, I am quite new into betting and not willing to commit too much into it.

Obviously it would be nice if there could be either 2-week rolling system or previous week's losses would at least partly reduce next week's PC. Has anyone tried to talk with BF about any chances that would help those who are not really top-bettors but still have to live with similar disadvantages? I mean that the top-bettors are not hampered by this 1-week thing but the next level bettors are and this is not fair imo.

Sorry for the flippant comments.Betfair are fully aware(or so i have been told) of some of the PC shortcomings-such as the losing week scenario-but when they do something about it is anyones guess.They do read the forums and make a comment occasionally to give their views.This subject has been raised on many occasions on here but I have never seen an official Betfair response-it would be good if they did acknowledge the problem and say if anything may be done in the future.Or maybe they just don't give a monkeys and would be pleased if you stopped betting here as you are an unwanted 'winner'.

Big thanks nbdbscms for your reply! I have not followed the issue and this is news to me. And anyone at Betfair is reading, please do not continue directing these whiplashes to those bettors who are doing ok while those doing very well are protected by them! If you chance this weekly issue, I will be happy to continue support you with this 20% PC.

* protected of
* change
sorry

increased carefulness and thus less betting and less everything

that so so true

do we pay pc on Multiples if we win

was looking  at odds  for 5 homes    pay out 92 on here and pc if wins wow  that very poor odds

looking at others it was 120 pay out   oh dear what a mess

abc12 & nbdbscms,
 
Assuming that you continue to remain profitable overall but have occasional losing weeks, or weeks in which your total charges generated are greater than 20% of your weekly gross profit, your lifetime charges will inevitably converge towards 20%.

The example that I provided above is fairly extreme. Unless you made a similarly large amount in your first 250 markets whilst generating a similarly low level of charges, your lifetime total charges are likely to be much closer to 20% of your lifetime gross profit than in my example and the absolute difference will also be much lower.

To be absolutely clear, as soon as your lifetime total charges, including premium charges paid or otherwise credited, first reach 20% of your lifetime gross profit, future gross weekly losses will off-set the premium charge due on future profits e.g. in the OP's example no premium charge would be due in week 3 given the equal loss in week 2.

It's only the period prior to your lifetime charges first reaching 20% of your lifetime gross profit in which you your weekly losses will not off-set the premium charge due on future weekly profits.

I doubt that bf are likely to change the system. In effect you are paying the premium charge that would nominally have been due on the gross profits you made on your first 250 markets (excluding the £1000 allowance).

This issue only impacts new premium charge payers. Anybody who became liable for the pc when it was first introduced was considered to have generated charges equal to at least 20%† of lifetime gross profits as of the 12th October 2009

jt45, thanks,
You clarified me one crucial thing which I obviously misunderstood as I a couple of weeks ago read the rules. Now I understand that also the PC will be calculated as lifetime costs and not only the comission, right? If/as this is the case, indeed lifetime costs will later begin to offset the PC.

PC Is always trying to make you pay 20% lifetime, end of story. You may pay it weekly but focusing on losing and winning weeks is missing the point, as it's always aimng at your lifteime figure. The only people who should care about that scenario are people who win big then go on a losing streak then give up. To an extent you are compensated for losing weeks in a small way by fact any commission will be put towards any future PC and also of course you then have to win back that loss + more profit to start paying PC again.

Anyway this makes more sense to me now. As I originally said, I am "happy" to live with this 20% (as far as it stops at that) and as it now seems, in long-term it is basically impossible to give away much more than that, so I do not have too much to complain.

Just Checking     05 Nov 11 13:45 
...and also of course you then have to win back that loss + more profit to start paying PC again.

Except if your lifetime charges generated remain at less than 20% of your lifetime gross profit after that loss. (Which was the entire point of my disagreement with Eddie and the example I provided)

abc12     05 Nov 11 13:30 
...Now I understand that also the PC will be calculated as lifetime costs and not only the comission, right? If/as this is the case, indeed lifetime costs will later begin to offset the PC.

That's correct.

Each week the customers who meet all the conditions set out above will be charged the lesser of:

The difference between 20%† of the previous week’s gross profits and the total charges generated during the week; and

The difference between 20%† of gross profits and the total charges generated during the lifetime of the account.

With regard to the lifetime calculation, Total Charges includes premium charges paid or otherwise credited as having been paid. I presume you have already accessed the premium portal. Used in conjunction with the information in the charges section it should make things clear(er).


..
https://account.betfair.com/regpay-myaccount/premiumcharge/summary.html
..

* Except if your lifetime total charges generated remain at less than 20% of your lifetime gross profit after that loss. (Which was the entire point of my disagreement with Eddie and the example I provided)

jt45, are you sure "newbies" aren't topped up to 20 % when they reach 250 markets ?   I've always assumed everyone was..

Eddie,

I may be wrong, but based on my own experience I don't believe that to be the case.

What I can say for certain is that my lifetime total charges remain below 20% of my lifetime gross profit despite having paid the premium charge since January of this year and having bet in far more than 250 markets. If that is not as a result of the 250 market threshold I'm at a loss to explain it.

Perhaps other recent premium charge payers who generated charges of less than 20% of their lifetime gross profit in their first 250 markets can confirm one way or another?

It could be that you had a "big win" that used to be exempt, but is no longer as it no longer represent more than 50 % of your total profit.  I know cases like this can take people below the 20 %

  Or do you mean that you are just below the 20 % mark every week on the portal ?  If so you really aren't as what you are to pay this week(on last weeks winnings) aren't included in the life time report.
  So everyone will be slightly under their threshold (20 % in your case) on the life time report every week they pay PC.

Eddie,

I appreciate your suggestions as to the discrepancy but they don't apply to my account:

The big win exemption doesn't apply to my figures and has never done so.

Based on my current premium charge portal figures, my listed lifetime Total Charges amount to 19.44% of my lifetime Gross PL. Including the applied weekly premium charge, my Total Charges amount to 19.72% of my lifetime Gross PL.

I would also note that I have had losing weeks and weeks in which I generated in excess of 20% of my weekly gross profit in charges since I began paying the premium charge. These weeks would have increased total charges as a percentage of Gross PL from the low point.

I see nothing in the charges section to suggest that total charges are topped up to at least 20% of lifetime gross profit upon the 250 market threshold being reached. My figures strongly suggest that it didn't apply in my case. Unfortunately my records aren't thorough enough for me to categorically confirm that to be the case.

Ok, if your numbers are correct, the only logical conclusion is that those who joined after PC was introduced aren't being topped up when they reach PC1.  Very strange and not fair imo, but then again - who said PC was supposed to be about fairness. 
  I still think they will be topped up when and if they reach PC2 though whether it's 40 , 50 or 60 % that will apply for them.