General Betting
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THE PREMIUM CHARGE MUST BE SCRAPPED
THE PREMIUM CHARGE MUST BE SCRAPPED
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The thing about the £100m for marketing is that they say themselves that the exchange revenue is holding up well where there is no marketing (see page 7).
So, if they are not spending money marketing the exchange, a) why are they stealing 40+% of my profits in winning weeks? b) why are they lying to us and saying the PC is levied to provide for marketing of the exchange in order to provide PC payers with new cannon fodder? |
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Ans) Because you're a mug and you pay it.
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Supermarkets might market certain foods like Easter Eggs for a £1, but that marketing spend brings people in to the store to spend money on other things. If they are spending £100m in marketing but not specifying the exchange, the exchange is still getting the benefit of it.
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There is some logic in giving people a free bet on the Sportsbook as a way of getting used to Betfair and the exchange, even though it does feel like perhaps they have no confidence in or love for their core product.
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I dont see the logic. You have a core product with a USP that gives punters value for money and has a high stick rate and a poor value Sportsbook. Look on odds checker at Betfair sportsbook if you think they are good value.
Sending people to a poor value sportsbook is surely less likely to keep them here then sending them to a great value exchange where they get a run for their money. In FY 2012 Sales and Marketing was £79.3m with revenue for the 4th quarter being £93.1m. In FY 2014 Sales and Marketing was £106.4m with revenue for the 4th quarter being £95.1m. If we split the increase in spend of £27.1m over 4 quarters it is £6.8m extra spend for £2m extra revenue. |
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The free bet with the Sportsbook is Value. Take that then switch to the exchange. Without knowing the spending habits and viewing habits of new users, which Betfair have access to and we don't, we can only pontificate. As the saying goes "a little knowledge can be a dangerous thing." It goes without saying that the company cherry picks it's statements in it's annual reports within the framework of Financial Regulations.
When one goes shopping in a big store, one often wanders round different departments. |
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Betfair are doing a lot of offers at the moment. If the offers are posted in marketing spend but the direct turnover is posted in revenue spend then that might be creating a very distorted picture of revenue growth.
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So we could actually have revenue decline in the Sportsbook if the sales and marketing costs include free bets and offers for the sportsbook?
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What about treasure chest / cash race etc? Does that not fall under marketing spend? Hell, even I get them!
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However they post their costs and revenue frog I would expect them to be consistent from year to year.
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In time betfair will realise that a betting exchange is risk free margin, verses a low margin sports book which are two a penny, whilst offering the same products and services in one of the toughest market places.
As Frog pointed out the 6.8m spend verses 2m additional revenue, it is going to be a long expensive road, so premium charge will be here to stay to finance it, or at least until the exchange declines to a point whereby evasive action will be required. |
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If I bet on betunfair I end up spending all my time and effort trying to keep the total charges under 20%.
 Horrid company. |
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over 20%.
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When you look at the figures it's ridiculous how much of their focus is on SB - it's fine that they want to promote a new product, but surely not to the extent that they actively hide their core product to force people towards it. If i go to the Apple site I don't have to hunt through pages promoting the Apple TV to find the Iphone, and if I go to Tesco they might well want me to buy one of their 50" TVs, but not to the extent that they hide the bread behind them. There must be ways of promoting a new product that don't damage the existing one, and if there isn't you have to ask what the hell you are doing.
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I don't think it matters what people think they're betting on (sportsbook or exchange) so long as their liquidity gets through layers. W/ sufficient recreational liquidity on the exchange, it's playable for professionals (outwith the pc & any other charges).
There might have been a time when the mgmt. thought the company's future lay in diverting new punters away from the exchange to a poor man's Unsportingbet / St*n J*mes but I think that time has passed; it wd pile up unnecessary staff costs and fail to leverage whatever technological assets and advantage bf have. |
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I have bet about 30 million over the years on here and provided great liquidity.I was chatting to a group of friends
last week on the race course who also have been hit with the PC charge.After a few beers and chatting about how horrid a company Betunfair has become ,we all agreed to either leave or reduce our liquidity to almost zero.It's not that we want to hurt Betfair but we all agreed that the time spent on here is now fruitless with large spreads,thin markets and massive deductions. Sorry everyone but we gotta go now. |
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forg2:
I really cannot get my head round why they don't just cut the costs and run a slim line exchange where they have a basic monopoly rather than compete in the big spending low reward sportsbook market. I think it's clear that we disagree on quite a lot but I think you're spot on here. I suspect one reason is that the share price would not be where it is now for a cash cow and on that basis no-one would buy it out for the current price. I think full year results will be interesting as they really need to start demonstrating sportsbook growth. |
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To many sports books offering an equal or better product than betfair, whilst having by far the greater market dominance on exchange betting in all aspects. So they invest heavily in a low operating margin sports book, when liquidity in their core business is declining. You have to wonder who is making these decisions.
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Share price crashing all day.Soon be sub £10
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Updates to the Premium Portal seem to be later and later these days.
The number of long time loyal clients getting caught in the 'you cant win more than 250k from Betfair' net must be growing by the week now that we are 14 years down the line. Betfair will have to purchase a new computer in order to cope with the spiraling growth rate. |
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18k a year average and you are on 40% minimum
anyone think they will ever raise the 250k theshhold or will they just keep catching more and more in the net |
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Gerbs bf are like vultures feeding on a shrinking carcass, more likely to reduce the 250k threshold than increase it
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I'm not expecting sympathy given that I have done well enough to pass the threshold but it has seriously damaged my motivation. I'd rather take alot more time off and see my profits fall 40%, than have them fall by over 20% from the same time and effort.
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Similar story here, John. In recent years I would have religiously priced up the in-play handicaps on latter stage, high grade tennis tournaments, but this year, since the Australian Open, I've punted on two matches. Admittedly, that is also driven by a lack of backer's money in those markets too, but it's chicken and egg, and there is currently no incentive whatsoever to bother.
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Very same feelings myself - Id hardly see a snooker match go by without playing on it, whether it be a decent televised game involving top players or a first round live scoreboard between two journeymen. But since the Uk champs I say i have played on about 2 or 3matches and thats the same amount of tournaments thats passed by.
I used to love nothing more than the 2 weeks of sheffield, but im seriously considering just doing all my punting for it on daq - even though you know your not going to get anywhere near the action - but at least you will be able to keep your cash at the end of it. The thoughts of slogging it for 2 weeks and shelling out 40% to these crooks is enough to stop you even watching it. |
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I reached exactly 21% for the first time on yesterday's portal so it's getting ever closer for me
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It's so dull in the markets, even the bots are bored
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agree curly. I was active on "to qualify" markets- previous years- this year- not even single bet! Are you full timer curly as well?
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used to bet on everything that moved on here not anymore value is gone with that pc payments
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share price almost £10.Soon to break below.
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inevitable .
if BF don't reduce the threshold to 200k by next year and then 150k and 100k in time i'll eat my hat . they have made it clear winners aren't welcome ,so they'll hardly be alientating anyone anymore who already pays the 'basic' 20% charge |
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Betfair should go sub £10 share price next week and decline to peanuts in the next couple of years.
The big decline is on now.I have totally given up on Betfair now. Not just charging people a tax for winning but the vast exodus of punters on here reducing liquidity to zero.We not have illiquid markets that no one can win in.It feels like the first 6 months of Betfairs birth but going backwards.Betfair is in terminal decline.I think it is too late to do anything. People are long gone and most hate people hate Betfair. Betfair has finally shown their true colours and it's very ugly. The shareholders will be the next to be thrown under the bus. |
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"They are setting very good prices(very low margin) on main markets. on their sportsbook encoruaging people to bet at sportsbook."
Uhm, no, not really. Take the televised match between Reading and Leicester tonight for example. B365 offer better odds on all three match outcomes. If you compare with all the major bookmakers Betfair don't offer the best odds on any scoreline, htft combination, first goalscorer, anytime goalscorer, over 2.5 or under 2.5. What main markets were you thinking of? I don't think the sportsbook would be able to survive on its own without being subsidised by the exchange. It is not all sportsbooks out there which are successful and make lots of money. |
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The company cannot seize the opportunity it had seven or eight years ago (to become the world's dominant betting platform) because 1) regulations and government stand in its way, 2) it failed to make itself a 'one-stop shop' for a lot of recreational money, and 3) the current mgmt. are not incentivised to make it that.
It's enough for the top team (for them to hit their targets and bonuses) to do as well as Laddies and bloseparty, who have problems of their own; they cd get by being a poor man's 3.65, with a fraction of the income. In order to become the 'default' choice of more or less thoughtless punters on their phones, bf needs an utterly simple, compelling proposition, and the only one that makes sense for them is price on multi-runner markets. Instead of trying to flog cash out and 'you decide', the company shd mount an all-out old-fashioned ad campaign on price, w/ a guarantee e.g. on the horses that they will match any competitor's price on bets taken in the hundredth of a second up to £100. The business model of their web competitors is to scrape their prices and go unders, so they won't be paying out too much if the offer is limited to after midday DOR. Bf is a bit like Tesco--a new generation of management lowering expectations, striving to meet more modest targets in a more competitive environment, and doing so by tinkering round the edges, giving a little here, scrimping a little there and relying on the core customer to be stupid and not to notice relatively worsening prices. It's time instead for the mgmt. to take pride in the exchange model and go all out for market share, taking the fight to .65. |
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Its sub £10 now. The £9.75 takeover offer price last year could be the floor price. But is the company worth as much now to a potential takeover as it was last May?
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gambling industry as a whole not doing too well lately. That maybe to do with pressure on FOBTs, so doesn't affect Betfair, might be nothing to do with it.
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But Askari, they didn't have to throw themselves into this 'more competitive environment'. They already had a model totally unlike that of any of their competitors.
Now, they seem to be trying to run a sportsbook on the cheap. And it won't work. |
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share prices crashes in the £9 now.
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"Northern Rock's CEO Adam Applegarth argued that there was nothing he could have done to avoid the run on his bank. He claimed it was extraordinary bad luck. Dick Fuld of Lehman Brothers said "I wake up every single night thinking what could I have done differently?" He was unable to think of anything. Human skill was hopeless against such odds stacked against him. Would they have advanced the same argument during the boom years? That leadership and skill had little to do with their firm's profits, that it was simply the luck of benevolent economic conditions? No, because their positions and astronomical salary would become instantly untenable and unjustifiable. On the way down it is forces "beyond your control". On the way up it is skill. A case of "heads I win, tails you lose.""
Excerpt from Luck by Ed Smith |