Premium Charge - Average £10K a month profit

Basically Betfair will rob you , bet elsewhere would be my advice.

a) no, because it's not simple
b) if you're making 10K a month you should nevertheless be able to figure it out.

OK Here is an example - if you are good enough to make 10k GROSS per month and are on 50% PC you will pay Bet"fair" between 52 and 53%of your GROSS winnings in PC and commission - So on 10k you could pay £5300 to Bet"fair". That leaves you £4700 profit less any expenses you incur to make the GROSS profit. So for instance track players on horse racing paying £1k a week to access live pictures would be left with £700 a month!!
Don't forget if you win 10k week 1 and lose 10k week 2 you are actually £5300 down over the 2 weeks

Profit 10,000
Commission (300)
Gross Profit 9,700
Courtsider fees (4,000)
Internet, Tech, API and Satellite fees (300)
Subs (50)
Premium Charge @60% (5,850)
Net Profit (500)

^^^ ????

Or...

Profit 20,000
Commission (500)
Gross Profit 19,500
Courtsider fees (6,000)
Internet, Tech, API and Satellite fees (300)
Subs (50)
Premium Charge @60% (11,750)
Net Profit 1,400

Less opportunity cost:
Missed earnings from employment (3,000)
Forfeiture of pension entitlements (300)
Bank Interest (100)

Alternative net profit (2,000)

Or...

Profit 30,000
Commission (600)
Gross Profit 29,400
Courtsider fees (8,000)
Internet, Tech, API and Satellite fees (300)
Subs (50)
Premium Charge @60% (17,700)
Net Profit 3,350

Less opportunity cost:
Missed earnings from employment (3,000)
Forfeiture of pension entitlements (300)
Bank Interest (100)

Alternative net profit (50)

Basically you need to make over 30k a month to make it pay

Spot on clyde.
Thats why its gone downhill,i and plenty others have just got sick of it and found other ways to to play.
I said when the tax was first implemented that it would hurt everyone in some way.
Its just about killed the exchange,well done betunfair.

The feeling when you win with others instead of betunfair is is unreal.
Its yours no trying to work out how much you are going to draw.100 win at 5 returns you a monkey not aprox 250,the pc is a disgrace and could well be found unlawfull in time.
There is a law firm that is ready to start a class action to challenge
the charge ,so there is a chance that all who have had money taken away by betunfair will get it back.Just like the banks had to payback.

Why do you assume that when someone says they make £10k a month, they're talking about gross profit? Realistically, they're talking about profit after commission. They look at their balance at the start of the next month and find they have £10,000 more money in it.

Now, we can't work out their premium charge because we just don't know how much they bet in that month, how much commission they paid, and so on. Worst case scenario: they won £10k in a single bet, paying 5% commission, and they can expect to pay another £5.5k in PC. Or, they could have paid thousands in commission over many many bets, and have nothing more to pay.

The question was premium charge on 10k a month profit and premium charge is calculated on gross not net profits.

Plus my examples assume no losing markets to simplify things (in reality it makes little difference) so gross and net profits in Betfair language are virtually the same.

I wish my losing markets made little difference...

Plus my examples assume no losing markets to simplify things (in reality it makes little difference) so gross and net profits in Betfair language are virtually the same.

Eh? Surely not.

Profit 10,000  = Betfair Gross Profit
Commission (300)
Gross Profit 9,700 = Betfair Net Profit

Difference = 3% so whether someone is winning 10k gross or 9.7k net and not 10k net, when premium charge is calculated gross is pedantic imho.

A thousand pounds worth of losses per a thousand pounds of net winnings saves me less than 2% so I'm keeping things simple by assuming no losses.

.........................

Best example would be a footballer's salary.  Whether Carlos Tevez is earning £10.3 million a year or £10 million a year, in terms of a news story it's incidental to the story.

Well, as Mr Magoo says, it depends on whether £10k/month means £10k after Betfair's commission. If so, then the ratio of wins to losses is critical to determining PC.

If I bought some stickers to complete my 1970 World Cup album at a cost of £200, the £1.50 postage and packing is critical to determine the total cost.  Imagine then if I went down the pub and told my friend that the stickers cost me £200 and my friend then said what about postage and packing I would be banging my head against the wall.

It's hardly a big issue to someone earning 10k a month (net or gross of initial commission) who is on super PC of 60%.  Maybe they'll save an average of £100 to £200 a month, so instead of paying 5.8k they'll be paying 5.6 to 5.7k in premium charges.

If in a particular month, a 1970 World Cup sticker collecting super PC (60%) payer on the 2% commission rate made a £10000 net profit by winning £1020408 gross and losing £990000 equally distributed over each of the weeks, no PC would be applicable.

Whilst he wouldn't pay any PC over that particular period he could still reasonably be described as a super PC payer based on his previous payments and lifetime profile.

and if Dwain Chambers completed his 1970 World Cup sticker collection and improved his 100m time by 0.5 secs he would be favourite to beat Usain Bolt at this years World Championships.

It's hardly a big issue to someone earning 10k a month (net or gross of initial commission) who is on super PC of 60%.  Maybe they'll save an average of £100 to £200 a month, so instead of paying 5.8k they'll be paying 5.6 to 5.7k in premium charges.

You clearly don't understand the way that PC is calculated.

and if my aunty had wheels she'd be a trolley, to quote barry glendining.

How much would you expect Betfair to be entitled to take?

Betfair doesn't want you guys, you are
sucking too much of the money in circulation,
and putting very little back. How much should
they(BF) be taking in your opinion?

Contrarian I know exactly how the PC is calculated.  Indeed I am probably in a minority of one, in so far as Betfair were calculating premium charge incorrectly, and it's down to my intervention that got them to admit (to me) this was the case and recalculate it. 

Someone earning 10k net on 60% PC will bet in a way similar to this:

gross winning markets 20,833
commission at 4%....less 833   
losing markets...less 10,000
net winnings..........10,000
gross winnings........10,833
commission generated.....567 (833/2 + (10k * 0.015))
premium charge due ....5,933

if he had no losing markets as follows:

gross winning markets 10,417
commission at 4%....less 417
net winnings..........10,000
gross winnings........10,417
commission generated.....208
premium charge due ....6,042

i.e. it makes £109 difference (ok in reality slightly more as his basic commission would be higher with less overall turnover) per £10k's worth of losing markets, if he has approximately twice as many winning markets as losing markets.  Imo that makes my guesstimate based on gut feeling of between a 100-200 quid saving spot on.

Where did this magic figure of £10k worth of losses come from? Seems to have been plucked out of thin air.

It's not out of thin air Mr Magoo.  It was a guesstimate based on experience and knowledge.  You can quantify it though, so out of interest you think it's too high or too low?

As Mr Magoo says, why do you assume such small losses?

Admittedly, if this is a 60% PC payer, then it is possible that they may (still) be generating very little commission - although I would assume that anyone bright enough to be paying 60% PC in the first place ought to be able to work out that a little bit of (artifically induced) volatility would do wonders for their PC bill (and eventually shift them down to 50/40%.

However, I thought the original discussion was just about someone earning £10k/month, and that that person might be on 40%, say. Many people fitting this profile will be actively pursuing highly inefficient break even/marginally profitable strategies in order to achieve their monthly £10k by, say, winning a total of £100k (after commission), and losing 90k. This would reduce their average PC bill from c. £3800 c. £1550.

To be fair it wasn't just a guesstimate.  It made the calculation round and easier and it felt about right.  If I'd thought about it a bit more I'd have realised it was a little bit out.

**should read: "reduce their average PC bill from c. £3800 to c. £1550

I'll answer it for you.  In my example the commission generated is 5.23% and the threshold is 5% so the 10k figure is too high.  Close though

although I would assume that anyone bright enough to be paying 60% PC in the first place ought to be able to work out that a little bit of (artifically induced) volatility would do wonders for their PC bill

2 points.  Firstly, you assume wrongly.  I know a few (potential and actual) and they can't work it out.  Secondly, it wouldn't be a little bit, it would be a hell of a lot.

Also in a lot of cases even if they did get it, it just isn't practical.

But why are we discussing 60% payers anyway?

However, I thought the original discussion was just about someone earning £10k/month, and that that person might be on 40%, say. Many people fitting this profile will be actively pursuing highly inefficient break even/marginally profitable strategies in order to achieve their monthly £10k by, say, winning a total of £100k (after commission), and losing 90k. This would reduce their average PC bill from c. £3800 c. £1550.

My example was from the perspective of a 60% payer and was meant to be amusing anecdotally to an opening post that deserved such an answer, and also to make people think including myself.  It was actually loosely based on someone, although the examples of their costs are all made up, they kind of fit with something he said to me.  Which was that if PC was 70% he'd have to quit and he has made/makes huge amounts by most people's standards.

Fair enough, but that is merely one very unrepresentative example (a mindless hooverer, apparently) of a PC player.

what about the successful ones who have paid £350k commission and because they've won over 250k in their "lifetime" they have to pay a minimum of 40% often more......is a 10 yr spell to win 250k realistic?? it's only 500 a week??

why does any new account only pay 20% regardless of commission generated to gross profits??

why is the no of yrs one has played or the fact one might be full time or part time not taken into account oe working expenses not factored in

it's BULL S&&&T we now it and so do betfair......

it's basically an abuse of monopoly power - monopoly because **** is rubbish to poor for in running.....if it wasn't betfair would be history!!!! FACT

in todays climate of zero on and off course betting tax, why has the premium charge not been tackled by the media?

mark my words if laddies get the quack into shape re in running and many bigger players move over to save the pc they pay betfair will risk alienating them and they could be in big big trouble

SCOM - MEDIA don;t care about gambling at all

.is a 10 yr spell to win 250k realistic?? it's only 500 a week??

I agree. This is probably the most unfair aspect of PC. This crude 250k limit should be replaced by a moving average of profit criterion. So someone who used to earn Ks/month several years ago, but is now struggling to make anything, should be PC exempt. Whereas anyone who quickly starts to earn a lot should be PC liable.

Unforunately, though, this sort of measure would almost certainly result in a reduction of overall PC revenues to Betfair, and so would never be adopted by them.

surely an ad campaign by laddies/quack along the lines of ''WE WONT TAKE 40-60% OF YOUR WINNINGS'' wont go amiss

Contrarian - you also forgot about the other important factor. It involves more work.

Indeed I am probably in a minority of one, in so far as Betfair were calculating premium charge incorrectly, and it's down to my intervention that got them to admit (to me) this was the case and recalculate it.

i think i did that. or at least i got them to surreptitiously change the wording on their charges page to fit with the way they were actually calculating it without any acknowledgement that they had done so. (so i didn't get an admission.)

once the company was floated all aspects of fairness will come second to profit & share price

i'm not expecting any relaxation in pc overall unless there is a radical change in the competition, i can only envisage it getting tighter if they struggle to deliver growth (current job losses and other changes internally are probably enough of a hint that the pressure is coming already)

There already is a radical change in the competition - by the end of 2013 L adb rokes will be a serious competitor and have the finances to wipe Betfair out imo

i just hope laddies are fully committed to the exchange side of the business

I think in the short term they are.Their plan is all geared to go "live" as Laddies betting exchange in January 2014 but a lot of work and finance will be put into developing things this year so that they can attract the business away from Betfair.

it isn't a radical change, lads purchase of daq is to suit their own requirements, nothing has changed in the short term, long term might be years not months

look at all of these people paying pc who are still here, why do you think they have yet to move?

what do you think is going to happen to move them when some are already being taken for 60% on a weds?

So you think Betfair can just continue along with no changes to charges and their customers will stay loyal ?
They have not moved because bet quack was not a viable option but believe me Laddies are a different proposition.

i think that whilst the old school have an edge and they can still win and pay then yes i think they will still be here, if bf hike charges again we'll all complain and a few will go, but until there is an massed movement of key accounts it isn't going to make a rats ass difference

we are all still here, what's stopping us going right now?

In-running on horse racing massively declining (despite what the figures say) because a lot of players have gone skint. No new players being attracted to the in-running because everyone now knows there is a queue to see the action , beginning at the tracks and ending on ATR with a few layers in-between.
Elise is probably right that some will stay whatever Bet"fair" do BUT who will they play against to generate commission for Bet"fair" ? Only sharks left who are slowly killing each other off and killing the product for Betfair.

End result will be a few fat sharks and Betfair with money bulging out of their pockets but no product going forward. Iwould love to know Bet"fair"s five year plan because I suspect in-running on horse racing might not be critical to their portfolio.

No matter what way you dress up the numbers PC started a terminal decline for in-running horse racing with the money being taken
out of the middle to satisfy Bet"fair" shareholders.

^ pretty much agree with that.  PC was a massive own goal, in-running horse racing becoming devoid of liquidity.  After eating the small punters the sharks left are slowly killing each other, and as you rightly say they are also killing the product for betfair. So very limited growth prospects.

Flotation went wrong with a dismal performance of the company's shares. Also floated at a bad time and over-valued. And now putting shareholders over customers and losing valuable customers.  They need to get it right and listen to customer concerns, and stop kicking own goals.

They still have a virtual monopoly on the betting exchange market - even with laddies taking B D** - they are still way out in front, although purple could become a realistic competitor but they are  miles away at present.

viva el presidente!
24 Mar 13 03:46
[...]
b) if you're making 10K a month you should nevertheless be able to figure it out.


Contrarian2
25 Mar 13 18:17
[...]
although I would assume that anyone bright enough to be paying 60% PC in the first place ought to be able to work out that a little bit of (artificially induced) volatility would do wonders for their PC bill (and eventually shift them down to 50/40%.

You'd be surprised

I think what viva said is spot on. The simple answer for someone earning £10k a month is a.) Learn to read, b.) go to the premium charge bit of the website and read it.

I would personally be surprised if someone in this situation wasn't able to find the charges section of the website read it and understand it.

Love all the forum posters who know how to get around PC but want to keep it a secret

I'm comparing all of this figures and...subject of this topic need to be changed on a new one " How tofind an idiot who will pay all of this charges and be a courtsider then? Would you agree with me?
P.S Happy Easter btw

It always me smile when people talk about betfair putting shareholders first and customers second. Given the performance of their shares I certainly pity anyone else in the queue.

Since becoming a 50% PC payer, what I think of as my effective rate has been 49.5% of gross profits (profit minus commission).  So if I earn £10,000 in a month, I'd expect my net income to be £5,050. 

However, it really depends on how your £10,000 has been achieved.  As someone alluded to, if you earn £20,000 over weeks 1 and 2 but lose £10,000 during weeks 3 and 4, you'll probably be left with £0 net income over the month. 

That's right, you can earn £10,000 during a month and have it all taken away as PC.

It's a crazy system.

it's also crazy to focus on just the very unlikely negative case as you can also earn 10.000 during a month and have nothing taken away

Yes, you can have a month with nothing taken away.

I wouldn't say I focussed on the scenario of being a new loser.  I clearly set out how it effects me before mentioning my extreme example.

I meant to say "a net loser".

DOUBLED     27 Mar 13 15:03 
Love all the forum posters who know how to get around PC but want to keep it a secret
__________
they are usually non PC payers as well