General Betting
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Hey All
Wondered if there were any thoughts on this from the wider Betfair Community - Betfair recently lost a High Court case in Australia that means they will need to pay 1.5% of turnover to bet on horse racing in New South Wales. Victoria followed suit today and will charge 1.5% on turnover other then during the Spring Carnival when it will be 2%
Betfair was arguing for a gross profit model, like the one they have been using until now n Victoria - 10% of gross profits, 15% during the carnival
Concerns for some over here in Oz that it could spell the end of Betfair Down Under - especially if sports go down the same path.
Turnover is defined as "back bet turnover"
Thoughts???
Wondered if there were any thoughts on this from the wider Betfair Community - Betfair recently lost a High Court case in Australia that means they will need to pay 1.5% of turnover to bet on horse racing in New South Wales. Victoria followed suit today and will charge 1.5% on turnover other then during the Spring Carnival when it will be 2%
Betfair was arguing for a gross profit model, like the one they have been using until now n Victoria - 10% of gross profits, 15% during the carnival
Concerns for some over here in Oz that it could spell the end of Betfair Down Under - especially if sports go down the same path.
Turnover is defined as "back bet turnover"
Thoughts???
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Replies: 18
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Betfair screw customer. Customer screw betfair. Karma.
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it does confuse me Womble (the attitude above). I think those in the Australian forum tend to support their exchange more than those in the UK. Then again it may be because we could be close to losing it.
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It's an atrocious result for bf, a protectionist verdict that shores up the poor-value totes.
Bf need to redefine turnover as some form of value at risk in a way that suits them. In their place I would just put forward their figs. and wait for them to be queried by the regulator, hoping that the process would highlight that they were offering better odds. I'd also subtract the profit from winning customer trades from totals of turnover. I understand the karma comments, as bf's attitude towards the customer is 1) that they want to win irrespective of outcome, 2) that they want a margin comparable to those of fixed-odds books standing risk, and 3) that they are not enamoured of clued-in clients placing positive expactation bets. Well, the easiest way to win irrespective of outcome is to be an authority with a swingeing turnover tax! |
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thanks Askari - the Administrators don't give a rats about better odds, they've been against Befair since day one and just want them out with no apparent understanding of why turnover taxes don't work on the exchange model
you could be onto something in re excluding, in some way, trades from turnover |
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What taxation is to be placed on lay bets?
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for what its worth
trading will be stopped or befair will add a huge surcharge for anyone laying and backing the same horse or dog. if they can run purely as an exchange of 1 punter against another punter then they make between 2 and 5%. paying 1.5% turnover isn't so bad then is it? liquidity will go down but the per race profit will go up. |
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The way i see it they need to talk to racing vic and racing nsw and come to an agreement that a traded transaction is smaller transaction than a straight win bet, its their only hope.
Surely by requesting a meeting and talking this through they at least save face instead of threatening to pull out crap. The CEO should have immediately went to Messara and Hines I cannot see how traded wagers could be fully taxed. They need to politely say sponsorships finished, advertising re winning post etc finished. Need to streamline their model, would hate to be an employee in tassie right now. So instead of talking to Shane Anderson they need to talk to the two that matter to themselves. It still surprises me they haven't linked up their tote product/fixed to supertab. They needed to get on that and sleep with the devil to generate easy to see turnover for tab. |
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I've been trading full time since september, part time since 03 and unfortunately started to concentrate solely on Aus racing since last year. whether I get back into uk racing bad time... or sports i am thinking things over right now. The prospect of a full-time job again does not feel good we shall see.
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If betfair ever become anything more than a bookmaker's free tissue and dumping ground for winners it will happen here as well. It was amazing they ever got off the ground in this country in the first place. When betfair and flutter launched their "original" idea their belief that they could somehow get away with not charging tax on turnover was almost child like in its naivety. They were extremely lucky that they launched at a time when bookmakers and betting turnover were disappearing offshore and a gp tax & levy was looking likely. The person who started up what was genuinely the first ever online betting exchange (some 4 years earlier) was told by the C&E that turnover tax and levy (bookmakers were charging 9% at the time) would have to be paid on both back and lay bets.
The only way exchange betting will take over the world is if we "cut out the middleman". It has to be state run so the government get all the commission and aren't the main losers. With a bit of foresight exchange betting could have been introduced in the EU as a form of deregulation in order to get round the competition laws. The only way betfair will expand is if they become the 10% partners and give the other 90% to the government of the country the bet was placed in. If, in their present form, betfair are ever to break into markets like the US and China they'll surely need to be handing out brown envelopes the size of skyscrapers. |
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Unfortunately for betfair, all that is official is not the GC.
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interesting post Feck - the legislation in Victoria allows for an exchange to be set up, or contracted out
Tolmi - the tax is only on back bet turnover so lays are free but one side of the transaction will always be caught Also - bookies are allowed to claim deductions for betting back with other license holders, Betfair isn't |
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Feck, I've been saying the same apropos HK, Singapore and eventually China for a while.
Their sell is that exchange prices are efficient prices; the person who wants the best price will not go with an unlicensed operator, with a share of the bet being lost to the revenue in perpetuity, but to the state-owned licensee. HK will not need to worry about the 13 billion lost offshore in the last year of figs. Their strategy re Japan, HK and China has been 'softly-softly' really I think because they don't have the business and cultural expertise to pitch their product to the right people. Just look at the pig's ear they're making of it in Australia. As for whether genuine exchange betting will ever offer the necessary liquidity to feed price-sensitive winners, imv, depends on something other than the fortunes of just one company. There will have to be broader public interest in racing and a willingness among many people to go out on a limb and take an early price. You might get something like it in Hong Kong, but massive winners there have never needed an exchange or fluctuating prices. |
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sigh !!!!! where can I toss my towel ?
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I cannot see it happening in the UK. Here we switched to gross profits from turnover a decade ago. When the government switched to gross profits tax turnover when through the roof. Low margin high turnover betting is the name of the game. It allowed FOBTs with there 2.75% take on turnover (GBD was 6.75% on turnover before making FOBTS impossible).
Racing had to switch to gross profits as well. The government couldnt have them sticking to turnover when taxes had just be cut to cause an increase in turnover. It also appears we dont have as strong laws here that protect racing cards from being used. The offshore bookies are not breaking the law and dont have to pay any levy to racing. The Australian model with regards to Betfair is completely flawed. They are calling turnover money put on back bets which makes no sense as its odds dependant. Player A has a 1.01 back of $10000 Player A risks $10000 to make $100 Player B risks $100 to make $10000 NSW and VIC Racing wants $150 Player B has a 100 back of $100 Player A risks $10000 to make $100 Player B risks $100 to make $10000 NSW and VIC Racing wants $1.50 Same risks taken by the two parties yet on one racing wants $150 and on the other they only want $1.50. My suggestion is for every horse you can lay the horse or lay all the horses bar one horse. That way no one is backing and Betfair slip outside of the turnover fee net. |
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My suggestion is for every horse you can lay the horse or lay all the horses bar one horse. That way no one is backing and Betfair slip outside of the turnover fee net.
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frog, there would have been a massive increase in turnover had they introduced a 1.5% turnover tax instead of a gp tax. When the bookmakers first went offshore were we not all ecstatic all we had to pay was a rip-off 3% "service charge"? I certainly hope it doesn't happen here but I doubt the well being of Maltese betting exchanges will be high on the governments agenda, especially if the bookmakers start handing out brown envelopes.
Your final suggestion is a clever one but if the cross matcher wasn't assumed to be the backer then the totes would just follow suit. |
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askari, I think it can only get worse for betfair's expansion plans. It will only take one country to realise that a betting exchange doesn't require a bloated monster churning through thousands of requests per second and implement the same and thereafter betfair won't even make the short list.
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Yes, all those features like the interface, the small increments that only mean anything to traders, the visible order book, the rickety server architecture etc. have very little to do with _betting_ at all.
But betfair the company's central concept is 'a trading exchange, but with sports bets'. It took six to seven years for them to see this wasn't a moneyspinner in the same way that Bet3.65, for example, had a moneyspinner. It is too late to expect any change other than forced by taxation and the regulator. |