They realised the odds are a joke and they're getting no business, so they are promoting some "TOP" prices on big games, across website and on twitter to attract new customers.

And final of african nations cup has amazing GBP 7,547 matched!.I don't know how you are reacting but I'm preparing for worse times. (german 2 bundesliga- dont remember when we had live video form there and afeter 20 mins game 25k matched-only 2 games now, and Celtic in play only. Punters are simply not here)

Liquidity
English premier league-- take a look at that,  just the first few matches
chelsea game £150K matched,
Norwich game £50K
arsenal game £125K
stoke game £100K

And thats with only 2 hours to go to kick off.

I am pretty sure this is a decline from years gone by. (should that be "years gone bye")

The exchange cannot compete with the low margin sports bookies. Its stupid to expect them to be able to with 5% commission on winnings in markets where others provide 102% books to high stakes.

Lets be honest, the commission structure on Betfair has always favoured those who want to duck in and out of markets. This suits inplay but it is a horrible system for preplay sports betting. But Betfair lacks that flexibility.

In a two outcome event where each outcome has a 50% chance you should be able to bet as much as you like at evens and pay a 1% on turnover commission. Global turnover would flood onto here. It would require a reshuffle of thoughts but it would attract the actual opinion punters rather than traders. It would require a meet in the middle option.

frog2 09 Feb 13 15:39 Joined: 01 Feb 08 | Topic/replies: 335 | Blogger: frog2's blog
The exchange cannot compete with the low margin sports bookies. Its stupid to expect them to be able to with 5% commission on winnings in markets where others provide 102% books to high stakes.

Lets be honest, the commission structure on Betfair has always favoured those who want to duck in and out of markets. This suits inplay but it is a horrible system for preplay sports betting. But Betfair lacks that flexibility.

In a two outcome event where each outcome has a 50% chance you should be able to bet as much as you like at evens and pay a 1% on turnover commission. Global turnover would flood onto here. It would require a reshuffle of thoughts but it would attract the actual opinion punters rather than traders. It would require a meet in the middle option.


People should remember that if you're on 5% commission you pay on average 2.5% of your stake in commission (because you only play when you win).

If you're on 2% commission you effectively only pay 1% on stakes when placing only straight bets.

Furthermore frog 2, in football this only applies to a few of the big markets. If you bet on correct score, half time score etc. Betfair (the exchange I hasten to add), is better value than any bookie in the world.

The question for them has to be 'where is the growth going to come from?--and customer and revenue growth in the short term.

I don't believe there are valuable football punters out there who can't check prices on oddschecker / betbrain / oddsmatcher and see (however they work out the commission) that one of fifty or so other worldwide books aren't better than bf on football (or American sports).

A bigger concern for them shd be winning back the custom of people who have become disaffected e.g. through losing to a fast pic player, getting fantastic prices on beasts that always run a stinker, or noticing that the price they took is almost always worse than what's available 5 secs. later.

And then they shd try to attract the specialist fans of minority sports. 3.65 get a lot of this market.

Plus, for me, however much this goes against how the culture of the company has evolved, they have to strive to be best in every respect on pre-off horses, where the exchange model has a natural advantage.

To join to betfair i meant to join to Betfair Exchange. The things that we need to start separate right now. :)
Betfair Exchange and Betfair Sportsbook in one place.
Well done Betfair managment team. Well done...

Askari

Betfair promoted the exchange to the tax and levy authorities as a risk free betting operation.  It still is, betfair continue to win regardless of punters betting strategy.

People can tolerate losses for a long period with other bookmakers, so why not betfair?  its all betfair management propaganda to justify the premium charge. Bookmakers across the world continue to have a fresh supply of punters money, even though they offer worse value than the exchange.   Betfair would not have introduced their sportsbook if they did not believe this to be true.

I HATE IT when then free money runs out.

hazel, this is not the basis on which bf are licensed. Even when their license was British, they had a bookmaking licence as well as one for exchange betting. Their current Gibraltar license covers both these activities.

The current situation for any non-UK client is that they are betting directly with bf as a bookmaker under a Maltese licence.

Bf carry significant operational risk on all their markets. Let's say that they offer a promotion on a market or generally. Either as purely an exchange or an exchange-fixed odds hybrid, there is no guarantee that bf can 'green up'. Then on markets like the malfunction (esp. on the places) with Voler la Vedette or the Grand National, where they advertised amazingly successfully and had to improve an SP of something like 160%, they bear a risk that it's impossible to slough off to the exchange.

It seems strange to me that there are people who are smart enough to win pc who can't make even a minor adjustment to their betting style to generate commission of over 20% of profits.

I'm not justifying the pc in its current form; it's not targeted enough, it stymies genuine liquidity as much as it encourages it, and the justification that it's there to cover marketing costs is staggeringly disingenuous.

If I have it right, you make your profits by full-booking horse markets. My own view is that the charge should not target you; you are providing genuine spot liquidity over a longer period than some recreational punters want to be on site, and your advantage is not skill-less or merely technical. I might have some souped-up form of transaction pricing that forced you to offer a genuinely full book rather than to trade increments on runners.

But if it's cheaper to you to offer books somewhere else rather than to stand the loser you least fancy (on whatever basis) in your successful races, then that's just the way things stand. It's sentimental to want the old betfair rather than to work in the way that earns you the most money.

Have they advertised it on the tv or in the Racing Post this weekend or is it a secret?

siwaadupa, you 'want to bet', you 'want to win'--it's your losers who have no future and you, in the end, who will have no counterparty, betting that way. Even casinos know that the punter has to win almost exactly half the time, that it's only the overround or the numbers that earn anything for them.

If your betting is so selective and strike-rate so high, why don't you bet w/ conventional bookies? I don't think you bet on horses, where winners are shown the door immediately. Even if you need placers, I don't see why you uniquely need bf.

I would be interested to hear from those who are "legally" combatting the PC charges.  I have tried and failed, maybe I am just not bright enough, as many on here seem to think it is easy?  Maybe it is more circumstancial due to my betting style? 

I bet predominantly in horse racing - taking positions pre event (I don't trade).  I will bet in most races when I deem there is value after commission calcs etc. 
This means I am happy betting on a selection whose value (I calculate) could be as low as 0.1% say.

So the novice answers to combat pc maybe:

1) bet bigger amounts... The concept of a betting "bank" prevents this as your risk is increased.  Also, there is a fine line between getting your "full" bet on at what is deemed value with the markets being so dynamic and moving so quickly.  Often a bet is not completely matched which can cause overexposure with respect to other horses/races. It is a real balancing act at this level!

2) back/lay in another sport using a strategy which you hope will break even after commission.  This is extremely difficult as you still need to beat commission.  This introduces additional variance and thus risk.  There is the risk of losing more via this pc reduction techinque (if doesn't work) and the pc charges themselves, ultimately giving yourself a much bigger loss.  Lets take this a step further, you have managed to identify a sport where you can break even long term.  Depending on your pc levels, you will need to bet into that market at a certain weekly turnover.  Lets first consider the amount your weekly "break even" turnover needs to be in order to combat pc. A reasonable estimate maybe a requirement to stake double your normal turnover on this other sport (using my experience). 
This will probably mean you are forced into diversifying into a sport with a high turnover...so restricted to football or tennis (looking at this from a horse perspective)?  Getting money on... you wil have to restrict yourself to the main markets.  Then comes the problem of your betting "bank".  You have just created yourself extra risk in the form of leverage.  You also need to have enough money in
your account to place the bets.  This becomes a problem with football with the majority of games played on a Saturday.  So your money will then be tied up in your betfair account.  But this is a risk in itself (esp imo how things are playing out with Europe etc).  Consider that all 40%+ pc players are probably playing with a bank over 250k (but most won't have their "full" bank at betfair if they can help it).  Who would want to risk keeping that amount at betfair esp when you can be earning interest elsewhere (betfair provide no good reason to keep money tied up here).  On this subject of diversification it is often advised "concentrate on what you are good at".  My preference is to simply pay the PC but try and improve my models etc.

...in fact isn't diversification one of the main reasons for Betfair's anecdotal deterioration - a perfect analogy lol?  They tried diversifying into too much. Take for instance their trading platform that completley failed (if still running? Ironically I can't remember its name lol).

I would love someone to suggest a way to combat the PC given the above considerations?  I hope this demonstrates how difficult it really is to beat the PC.  Either that or my ineptness lol!

Getafix, I managed to get my comm generated above 20% with the original PC, by simply increasing variance. Normally you would place a premium on consistency, the PC incentivises you to do the opposite, so I started having more straight bets, and was less willing to 'pay' (give away small amounts of value) in order to smooth returns.

I expect the same will eventually happen with 40%, but right now I am paying quite a lot. Taking special measures to get your comm generated up on 40% PC isn't really worth a great deal. It is on 50% or 60% though.

THEY ARE TRYING NEW AVENUES TO TRY AND MAKE THEIR SHAREHOLDERS LOTS MORE PROFIT ,SO THEY WILL BE HAPPY ,THEIR ONLY TRYING TO DO THEIR BEST

Getafix
All good points.
There is no doubt that there is a  " price " involved in reducing PC liabolity, in the form of many of the things you mention.
Probably the biggest one is the key one you mention of the need for a bigger betting bank to cover all the extra bets you are required to make at " break even" levels.
Imo this is much , much greater than increasing your turnover by a factor of 2 or thereabouts, as you seem to suggest.
More in the region of a factor of 8 to 10. Though it essentially depends entirely on how high is the strike rate that you are trying to mitigate.
As far as getting any and all such breakeven bets on, it is not currently that hard if you are operating in the main mkts of ( say ) football, as you are spreading this large increase in turnover over a a large number of games at a relatively small amount per game.
Liquiddity has not declined that much, at least not yet.

I STILL THINK MY ANSWERS THE BEST ,AND ITS EASILY UNDERSTOOD

"it's your losers who have no future and you, in the end, who will have no counterparty, betting that way"
True. If I wont't have losers than I won't be here. I can assure you if that day come, most of you will be on my position as well.

FINE AS FROG HAIR
" It seems strange to me that there are people who are smart enough to win pc who can't make even a minor adjustment to their betting style to generate commission of over 20% of profits".
Yes I agree, very, very strange.
Siwaadupa's vague reply to this, along the lines that he has better things to do with his time ( than using it to protect his profits), seems very iffy to me.

I guess that you are on 20%PC and you are concerning about to pay less PC(you protecting your profit)?. That's correct thinking. But I'm more concern to win on the market and have more money from there rather than focusing on markets where I can generate commission.

"Liquiddity has not declined that much, at least not yet."

It affected me on soccer, tennis market. At least 20, 25% less bets. Absolutely nothing to do on Nba Basket. Where only scalper is happy.

Iffy and vague for me is just the process of generating commisson. I can at the same time (when Im generating a commission) bet on a different market and earn money for Betfair in just different way(PC). But I need to be concerned about generating commission. I don't understand why Im being punished for that?

Right now new customer need to face:
-1st charge after he wins around 10k.
-2nd charge after 250k.
-He needs to start generate commission to pay less charges.
-He needs to face competition from their own website(sportsbook)who supports their more profitable product.

Its not a secret that these factors may only discourage new(or existing)customer. And we are going straight away as forex is: where 90% of them are speculators.Good quote from @Rafael Nadal:
Because of these factors BF exchange became complicated and only for sharks:
When the fish disappear only the best hunters in the sea will win. Lots of pros on here are going to be wise to rethink things, because they are now the small fish.

I only dont believe that we will be that big as forex is.

Frog2
I think he might have meant that it's no point in earning a net after commission loss on all the extra bets which is effectively greater than the PC liability you are trying to reduce.
If so, then I think we can all agree on that at least.