From the article john123 mentions (I'm assuming Betfair won't like me posting the link so you'll have to google for it):

"Big players may be mitigating their exposure to the Premium Charge by reducing the amount of backing and laying that they do, which depletes the available action in markets."

Now I'm no big player, but this is how I've reacted to the PC (in particular the 40-60% PC).

People have been going on about the exchange being in catastrophic decline for years, at least as long as I've been a member. If they were right it would be long gone. It's true that it's got harder for the minute proportion of players who make a good return (enough that they don't have to do anything else) but for most punters it's the same as it ever was.

To the extent that there is a reduction in liquidity that's likely to be mostly to do with reduced disposable incomes. The second biggest factor is probably the cross-matcher which reduces the volume traded because some previous bot strategies that generated high turnover at low margins are no longer worthwhile.

Regarding quack - there is no shortage of money available to boost liquidity there, I'd be glad to do it but I'm not running a charity so it'd have to be profitable. As it stands I can't do so profitably because of the way their systems work. I can't see them changing their systems because they offer greater margins to the operator than BF's do. This is the sole reason that I don't have a big operation at quack, low liquidity markets are no problem to me at all.

Whilst most normal punters don't like the idea of it (or even really understand it) the reality is that a huge proportion of the liquidity available on the exchange is provided by automated players (bots). If the environment is in-sufficiently friendly to bots then that liquidity won't be there, that's one of the key reasons for the lack of liquidity at quack.

As regards charges - whilst I'd rather not pay them charges on overall profit will never stop me playing, in fact it's the opposite, as BF charge me more and more I am further incentivised to increase my activity to keep my income growing. This is good for the exchange. In this respect I can see that increased charges do make sense. I'm not sure whether these charges put off "people with ambition" - it's impossible to know. I think most small recreational players are probably quite realistic about their prospects and don't worry too much about what'll happen after they've withdrawn even £10k, never mind a quarter of a million. If it deters a few marginal winners who were scraping by but now get demoralised that's so much the better for me.

Finally I would advise all to be careful what they wish for, a highly liquid exchange will also be very efficient and whilst that means recreational players will lose their money more slowly it also means that opportunities for genuinely good players to win are reduced. A "perfect" market with true prices benefits nobody except BF.

Er - no, that's not quite right, but your general sentiment is fair enough.

What a relief it is, if and when one of the "heavyweights" comes on here to post a few salient points.
Thank you Aye Robot.

[i]Doridoru : Dont the big winners who have to pay pc already earn themselves at least £1k a week after the charge.. [/i}

Many "big winners" don't have to pay PC at all, they already pay more comm than PC payers are charged hence the reason for the charge - to make those who use the site for trading, botting and market making pay their fair share in comparison to position takers.

For the first time since I've been on Betfair, I actually felt valued as a customer yesterday when I received a visit from my account manager. Before yesterday, I never even realised that I had one.
Apparently since Breon Corcoran came over from Paddy's last Summer, a new team has been set up to get feedback from "VIP" customers (Their description - not mine ) with a view to improving customer relations. They also seemed to recognise that Betfair had been arrogant in its treatment of customers for some time and a greater customer focus was required if the exchange was to grow.
Apart from the general feedback and discussion about how the exchange operates and how customers communicate with it, I was surprised at how interested they were in suggestions as to how the Premium Charge could be modified to be fairer. The account manager rightly pointed out that the charge impacted different customers in different ways and that it needed modifying. I had the distinct impression that it would not be increasing but that they were exploring ways to rebate on losing runs or reduce the charge on lower levels.
At the very least, it seems that now they recognise that inventing a product doesn't give you monopoly rights over the market indefinitely.

Lads plc, one of the world's leading betting and gaming companies, has today (24th January 2013) agreed to acquire the BETquack exchange business. The transaction is subject to certain conditions and is expected to complete in late February 2013.

What does this mean for you, our valued members?

Whilst ensuring that the integrity of the exchange is fully protected, we believe that combining the strengths of Lads with the expertise of BETqukcQ will have a hugely positive impact on the betting experience for our customers.

On completion, Ladbrokes will work with **** to further enhance the competitiveness of the exchange, focusing initially on growing liquidity and event coverage, as well as expanding the range and depth of markets offered.

How to access the website and how to contact us will stay the same, and we will continue to offer our great low commission rates and promotions. We will of course keep you informed of when any key developments or enhancements that may affect you are likely to happen.

Our ultimate ambition is to bring all the great elements of Ladbrokes and **** together and create an unrivalled betting experience for all our members.

So,lads confirm takeover of daq.
And betfair start to think about what they have done since the float.
Things will have to change on here or there will be no betfair as we know it.

The ladbrokes betting exchange.... already sounds better than **** / smarkets.

In the 20% pc range at the mo,  hopefully now the 250k threshold wont be lowered which i was really worried about.  reckon i have about 18 months-2yrs until i get into 40-60 range.

fingers crossed for something positive to come out of lads acquisition.

Yep, I made it clear to them that whilst my income may look good, there are the following issues that many of us face:

- no pension provided by Betfair
- anti-social working hours/days (weekend work and evenings)
- work way more than 235 days a year (normal person working days)
- no idea how many years will be able to earn a living (may lose edge, liquidity may seep away, etc). As time passes, tougher to re-enter workforce
- no colleagues.  Sat at home alone.
- and so on.

When you take these sort of things into account, being hit with a 40-60% charge will make many walk away.  It's not a case of seeing someone earn an above average salary that's tax-free.  Plus I expect most who are successful on here could be/were quite successful in the real world.

I've said it before but a weekly/monthly personal allowance on PC makes a lot of sense.

I agree Templeton Pack. No colleagues. Sitting home and worry about girlfriend as well because I cant be in 2 places at one time. NO clarify Income from betfair. I havent receive any letter of confirmation of my income yet even when I needed that. I praying to God for any competitiveness because of ridiculous huge charges.

Spot on temps - made that pretty clear at my meeting as well.

They said they had no plans to increase charges, but we've heard that before.

doridoru, I'm sure all full-time traders think the grass is greener doing what they do than it would be in an office job.  I know it is for me.  I'm merely pointing out that Betfair need to take into consideration the non-monetary aspects of what we do when calculating PC.

It's not as simple as saying Mr X earns £50,000 p.a. tax free on Betfair and so a charge should be placed on his profit that is equivalent to income tax.

Right, off to the nice and quiet gym...

The account manager told me there were about 550 customers with VIP status, which included all PC payers and a handfull of big players and large liquidity providers.

Well I've just checked back, and I hit the 20% total charges in Feb 2010. Used up my £1000 allowance in June 2010, and I've paid the 20% PC almost every week since then.

Never had a phone call from Betfair or any freebies (apart from a baseball cap which 'er indoors thinks I look daft in) , and as far as I know I'm not a VIP, nor do I have an account manager.

None of that really bothers me though, as I realise that Betfair enables me to avoid proper employment, and make more than I did when I was working, for less hours.

Similarly to Lanza though, in a year or two I'll probably hit 50-60% PC and have to decide what to do then. Wouldn't be easy.

By the way, although not all of his points apply to me, great post by TP at 12.03.

My mind always boggles when I read on here on how seemingly many of you on here have found and employ consistent winning strategies that apparently only generate total charges to GP ratios below the 5 % mark.
I employ a number of consistently winning strategies and every one of them generates charges to GP ratios well in excess of the 20% threshold figure used for PC liability calculations.
And I can't even begin to imagine how my strategies will ever produce less charges than they do.
Obviously I'm not jealous of all you others, but I wonder what you know about successful high profit marginn betting which I obviously don't know and probably never will.

Two things in your post Coner that puzzle me a bit.

1)" The firm has been going downhill since they started the tax, and it effects everyone in some way ".

2) " Every one that pays the tax or is near the tax will swap over. Then the smaller players will jump ship as well ".

Both points seem to ignore the basic fact that most users are not concerned in the slightest by the tax, and do not see it as either an actual or a potential problem.

That's not to say that I don't understand it is a problem ( and a big one) for a minority on here. But that's all it is.

It's not a game changer as far as the future of BF is concerned.

Frog.
    You have been around a long while,i have read many a post by you ,all good fun may i add and some very imformative.
To try to anser you.
1---when the tax was introduced i and 3 others from my town,were forced to curtail a lot of our punting--tradeing call it what you wish,away from betfair.That was just 4 from my vicinity that i no about.it effected all as there was not  as much about.Now multiply it, lots more that fell into tax bracket got a little peeved that betfair was takeing there winnings,and started useing other firms to do whatever they did.
So plenty of liquidy gone from betfair,whicht affects us all.
2--
Like i said if ladys some how get the inrunning playable,every one that has to pay tax to betfair will move over,those near the tax bracket will move over.Then all those that have never heard of the dreaded pc will wonder why betfair markets are empty and follow.

Frog : My mind always boggles when I read on here on how seemingly many of you on here have found and employ consistent winning strategies that apparently only generate total charges to GP ratios below the 5 % mark.
I employ a number of consistently winning strategies and every one of them generates charges to GP ratios well in excess of the 20% threshold figure used for PC liability calculations.
And I can't even begin to imagine how my strategies will ever produce less charges than they do.
Obviously I'm not jealous of all you others, but I wonder what you know about successful high profit marginn betting which I obviously don't know and probably never will.

I agree that most punters will be paying way way more than 20% in comm, but having started a mate on BF a couple of years ago and explained basic winning methods to him, he now makes a weekly wage and pays around 6/7% in basic comm which is far less than me!

It didn't come easy though, he gave up 3 times before succeeding, I had to push him all the way, but the low basic comm strategies are there Frog, if I explained more you would even say "that's so obvious", they're not rocket science, but as always most things are simple when you've learnt how :)

If the tax had been set at 30% flat rate and was taken monthly would there still be so many compliants? - 30% having taken out API charges, transaction charges, data request charges and commission generated - No 250k threshold just a simple 30%.

I never understood that if you had made your money at a lower rate (under 5 % to betfair) they were to top it up to 60% of winnings whereas if you already paid 12% they only topped it up to 40%. Its like people were punished for not paying as much in the past. Its would be like the government charging a new immigrant from the EU a higher tax rate (or deny services) than those who worked in the UK all their lives. i.e. totally unfair.

My guess is the bands were set by someone data trawling their historical database rather than predicting the affect the tax would have on people's behaviour. Economics 101 shows us at some point higher taxes actually lead to lower revenues.

"I never understood that if you had made your money at a lower rate (under 5 % to betfair) they were to top it up to 60% of winnings whereas if you already paid 12% they only topped it up to 40%. Its like people were punished for not paying as much in the past." Agree.. Inside Trader. Punishing us for being here and I'm not really sure why...