TO think they had a monopoly on a completely unique and fast growing way of betting.

Was chatting to a few people in the local bookmakers about Betfair today when a few noticed that I was placing bets on the Iphone.

They nearly laughed me out of the shop when I told them I bet with Betfair.

Some of the stick dished out was that Betfair offer very poor prices, winners are taxed up to 60% of winnings and Betfair don't honour bets when a big customer loses.

Even though I was probably the only winner in the shop, there was no reasoning with any of them as their minds were already made up.

Suppose when all that is advertised is the Sportsbook and people only read complaints in the Racing Post/social media, then I should not have been surprised.

I don't disagree, Bilbo, but doesn't it also at least in part highlight the negative PR driven by the PC, something which it is likely would never affect any of the people Westender is talking about?  They're recreational punters who will NEVER bet here because of something which is of no relevance to them whatsoever....

The Q and A highlights that customers are unhappy with a big range of issues (including the premium charge) but cannot see any action being taken to address any of the issues.

All customers see is liquidity shrinking increasingly week by week and it is hard to disagree with the posters on here who concluded months ago that Betfair have lost interest in the Exchange.

The responses are similar to those previously provided on all the issues so I think you should be awarded a premium charge rate of 70% of gross profits and a complimentary 2p bet on the Betfair Sportsbook.

Indeed.  Personally all I found the effect of the different pricing structures had on me was that I stopped punting on things on which I was being deducted 40%! 

It does seem bizarre that they're content to see the exchange continue on its downward spiral....

Exactly. They're trying to make it hell for us so the casual punters will have the option to bet on the sportsbook or take the betfair bot price on the exchange.

The rot set in when Betfair started to see its customers as competitors imo.

hugely overcharged this week. think it was to do with their treatment of the championship promotion market (or possibly the league one promotion market).

betfair's plunge continues unabated

I have my doubts about that 25% figure.  Around 2004 Betfair announced that 0.71% made more than 15k per year.  Maybe it was a typo and they meant 0.25%!

how does the losers money last longer ?

Betfair have always maintained that the PC was introduced to provide a pot of cash to invest in advertising the exchange in order to find new losing customers to replace the old losing punters who's pockets have been emptied entirely.

Nothing whatsoever to do with getting losers to stay longer.

Of course we now know this policy statement to be a complete sham as the advertising budget for the exchange side of the business has diminished as the investment in the sportsbook has increased.

The main use of the PC income is to boost short term profitability that is then reflected in an attractive share price.

Only a matter of time before the current incumbents decide that the share price can no longer be sustained and that a preemptive fire sale is the best outcome for their collective retirement income.

The other thing I would say is that the original goal may have been to fund advertising but the management team now is almost completely different to the one even involved in the higher rate charge decision.

Agree on the short term profitability point though.  Any structural change in pricing like the Premium Charge can only give you a couple of years of growth (if released mid fin year).  I assumed the whole takeover bid was relating to a fire sale.

Given that MD was trying to shift his on flotation, I'd hope he has few with the recent surge.  Of the three, I would guess Breon's remuneration package means he is tied financially the tightest.

So you are saying Mark Davies?  The charge was in place for almost 2 years before he left, of course.

just saying   we no high roller taking too much over the year 

and on  less than the low wages and yet pay the same as the high rollers   give over 


all that pc   need  a  long  over view      review   big time  as   small wins   seems    to pis s folks  off and bet elsewhere easy   


it  all work and no play on   here

tillions in missing bet are eslewhere   


if they are elsewhere   then u miss the traffic   for the     sportbook    dump the pc and u get world wide power and  all traffic can     look in sportbook     

but no   the ship   shuck  down wade   all down hill   while  pc   here to stay    mayday

need to up the lifetime to 300k  or more on the year rising   say 2 to 5 per cent a year same  as the real intrest rates due to   more  catching the net and      most dont  make much due to   bots and  tidy bots  and  betfair bots  it all   getting smaller on here cake  have   defo   gotta  alot lots smaller folks have long gone due to pc     but all spoiled by the lifetime thing

Customers see Exchange liquidity declining week by week and there is a huge simple contrast between 2000 and 2014 as follows:

2000
Unique selling point of the Exchange when launched was simple - best prices in the industry with 5% commission on winnings.


2014
Customers now see the Sportsbook and quickly notice the worst prices and value compared to the established bookmakers.

Betfair now has a telephone book of charges ranging from 5% for losers and between 20% and 65% for winners as follows:



Introduction

There are two types of charges that you may be required to pay. The charges described in the ‘General Charges’ section apply in relation to your Betfair account and therefore are relevant to all customers. In addition, there are certain charges that only apply in particular circumstances to customers of the Betfair Exchange. Further details of all of the following charges can be found in the relevant sections below.

General Charges

Charges relating to the Deposit and Withdrawal of funds to or from Betfair are set out in the deposit and withdrawal pages within the ‘My Account’ section on the website. However, additional charges may apply in some cases. These charges are set out in Section 6.

An Inactive Account Fee will be payable by customers who have not logged in to their Betfair account for thirteen consecutive months or more and who have a Betfair account in credit. Details of the Inactive Account Fee are set out in Section 8 below.

Charges applicable only to the Betfair Exchange

For the vast majority of Betfair Exchange customers, the only charges paid to Betfair will be Commission on net winnings in an Exchange market, as set out in more detail in Section 1 below.

There are additional charges on the Exchange to deter extreme usage of the facilities provided by Betfair: customers who place more than 1000 bets in any hour on the Exchange may also be charged Transaction Charges depending on the number of bets placed and the amount of commission they have already paid, as set out in Section 4 below. In addition, customers who make more than 20 data requests on the Exchange in any one second may also be charged a Data Request Charge depending on the number and type of data requests made and whether they were also generating matched bets as opposed to just reading data. Fees relating to data requests are set out in Section 5 below.

A small number of customers who, in the long-term, generate very little commission compared to the amount they win may incur Premium Charges. Any customer affected by this charge will be notified in advance. Details of the Premium Charge are set out in Section 7 below.

A Turnover Charge will be payable by a very small number of our customers who engage with the Betting Exchange on certain Australian racing markets in a particular way. Details of the Turnover Charge are set out in Section 9 below.

1.Commission, Market Base Rate, Discount Rate, Betfair Points, Betfair Points Statement and Betfair Holidays

This section only applies to the Betfair Exchange.

Betfair charges a Commission on your net winnings on a market. If you have a net loss on a market you do not pay commission.

Commission is calculated by multiplying your net winnings by the Market Base Rate. From this we will apply a discount. The more you bet with us the greater the discount you will receive.

In order to see the Market Base Rate applicable to you, please refer to emails and web messages from Betfair setting out current charges, or click here to see the Market Base Rate section on our Help and Learning pages.

Please note that the “Rules” tab which is found on each market on the “Classic” or “Old” version of Betfair is incorrectly displaying the Market Base Rate as 5%. Please ignore the information about the Market Base Rate on the “Classic” or “Old” version of Betfair.

The size of this discount, or your Discount Rate, is determined by the number of Betfair Points you have accrued on your account. Betfair Points are earned in proportion to your betting activity - the more you bet, the more points you accrue, the greater your Discount Rate. Please note that your discount rate will be capped at 20% unless you have completed Betfair's Know Your Customer check requirements.

You earn Betfair Points every time you bet on a market. You will earn 1 point for every 10 pence of commission paid (if you have net winnings) or implied commission (if you have a net loss). Implied commission is calculated in exactly the same way as commission but refers to losses rather than winnings. Betfair Points are awarded equally whether you win or lose.

Example:
You have net winnings in a market of £400.
The Market Base Rate is 5%.
Your current Discount Rate is 40%.
Therefore the commission you pay is £12 (£400 x 5% x (1-40%)).
You earn 120 Betfair Points.


Example (using implied commission):
You have net losses in a market of £100.
The Market Base Rate is 5%.
Your current Discount Rate is 30%.
Therefore the implied commission is £3.50(£100 x 5% x (1- 30%)).
You earn 35 Betfair Points.


For the purpose of calculating Betfair Points your commission or implied commission on a market is rebased to British Pounds at the time of settlement.

Your Discount Rate is calculated from your current Betfair Points every week. This occurs at midnight (GMT) every Sunday using one of the tables below:

Table A

Applies to all customers other than those specified below


Betfair Points



From

To

Discount Rate


0 999 0%
1,000 2,499 2%
2,500 3,999 4%
4,000 5,499 6%
5,500 6,999 8%
7,000 8,999 10%
9,000 10,999 12%
11,000 12,999 14%
13,000 14,999 16%
15,000 16,999 18%
17,000 18,999 20%
19,000 20,999 22%
21,000 22,999 24%
23,000 25,999 26%
26,000 28,999 28%
29,000 31,999 30%
32,000 35,999 32%
36,000 39,999 34%
40,000 43,999 36%
44,000 48,999 38%
49,000 54,999 40%
55,000 60,999 42%
61,000 66,999 44%
67,000 72,999 46%
73,000 79,999 48%
80,000 87,999 50%
88,000 95,999 52%
96,000 107,999 54%
108,000 125,999 56%
126,000 149,999 58%
150,000 - 60%

Table B

Applies to customers in Canada and Czech Republic


Betfair Points



From

To

Discount Rate


0 6,999 0%
7,000 16,999 10%
17,000 28,999 20%
29,000 48,999 30%
49,000 79,999 40%
80,000 149,999 50%
150,000 - 60%

Table C

Applies to customers in Netherlands


Betfair Points



From

To

Discount Rate


0 7,999 0%
8,000 14,999 10%
15,000 24,999 20%
25,000 40,999 30%
41,000 70,999 40%
71,000 - 50%

Table D

Applies to customers in Austria, Switzerland, and Ukraine


Betfair Points



From

To

Discount Rate


0 999 0%
1,000 3,999 1%
4,000 6,999 2%
7,000 10,999 3%
11,000 14,999 4%
15,000 18,999 5%
19,000 20,999 6%
21,000 22,999 8%
23,000 25,999 10%
26,000 28,999 12%
29,000 31,999 14%
32,000 35,999 16%
36,000 39,999 20%
40,000 43,999 22%
44,000 48,999 24%
49,000 54,999 26%
55,000 60,999 30%
61,000 66,999 32%
67,000 72,999 34%
73,000 79,999 36%
80,000 87,999 40%
88,000 95,999 42%
96,000 107,999 44%
108,000 125,999 46%
126,000 - 50%

Once your Discount Rate has been calculated, your Betfair Points balance is reduced by 15%. This is known as the Weekly Decay. If you continue to bet at the same level each week, your Discount Rate will remain unchanged. If your Betfair Points at any time imply a higher Discount Rate, you will move to that rate immediately.

Discount Rates are applied at the time of market settlement rather than bet placement. These might be different for you in long term markets.

The Betfair Points Statement within your My Account section provides a full history of your Betfair Points, showing changes as a result of your betting activity, weekly decay and any relevant promotions. This statement also shows your current Discount Rate.

You are able to prevent the weekly decay of your Betfair Points by using a Betfair Holiday. You may continue to bet during your Betfair Holiday but will not earn Betfair Points for any markets settled during this period.

You earn one Betfair Holiday when you register and one additional Betfair Holiday every three months thereafter. You may use your Betfair Holiday at any time but cannot accrue more than four unused Betfair Holidays on your account.

The Betfair Holidays section within the My Account section provides a calendar of the next 26 weeks and enables you to book or cancel Betfair Holidays for any of these weeks.


2.Multiples betting

This section only applies to the Betfair ‘Exchange Multiples’ product and does not apply to the ‘Fixed Odds Multiples’ product. Please click here for Betfair’s FAQ page and further information in relation to Exchange Multiples and please click here for Betfair’s FAQ page and further information in relation to Fixed Odds Multiples

Sports Multiples

Betfair charges commission on winning sports Multiples bets. The commission is usually 5% of winnings but may vary from time to time. Always check the Rules tab to be sure what commission rate applies. If your Multiples bet loses you do not pay commission.

Betfair Points are awarded in the same way as for sports betting markets. If your bet wins you will be awarded 1 Betfair Point for every 10 pence of commission paid. If your bet loses you will be awarded 1 Betfair Point for every 10 pence of implied commission.

Horse Racing Multiples

When betting on horse racing Multiples the odds of each leg will be based on the Betfair SP, adjusted by a margin. This margin is usually 5% but may vary from time to time. No commission is payable on winnings on horse racing Multiples.

Betfair Points are awarded on the basis of one Betfair Point for every £2 won or lost on each Multiple. E.g. a £10 winning multiple with combined odds of 11 would be awarded 50 Betfair Points based on £100 of winnings. If the same multiple were a loser 5 Betfair Points would be awarded on the £10 loss.


3.Tote betting

When betting into the AUS Tote Pools via Betfair or placing other Tote bets with Betfair (for example UK Tote bets) you earn 1 Betfair Point for every 1 GBP staked. All Betfair Points earned from UK and AUS Tote bets over the course of a week (Monday to Sunday) will be credited to your Betfair account the following Monday.

For the purpose of calculating Betfair Points your total stake is rebased to British Pounds and you earn 1 Betfair Point for every full Pound staked.


4.Transaction Charges

This section only applies to the Betfair Exchange.

In addition to any commission payments, Betfair customers will be charged a transaction fee if they process a large number of transactions on either the main Betting Exchange or on Exchange Games.

NB - Transaction Charges only apply to customers placing or editing more than 1000 bets an hour (although in the case of Exchange Games, the editing of bets is not included). The number of bets placed across the Betting Exchange and Exchange Games are calculated separately for the purposes of calculating any Transaction Charges payable. So, for example, if within the same hour you placed 800 bets on the Betting Exchange and 700 bets on Exchange Games, no Transaction Charges would be payable in respect of any of those bets.

At the end of every day, we add up all the bets you placed or edited (whether matched, cancelled or lapsed). If this number is in excess of 1000 in any hour of the day then:
i.for customers placing bets through the Application Programmers Interface (API) on the Betting Exchange or for customers placing bets either through the API or on the website on Exchange Games, we will multiply this number by 1p; and
ii.for website customers on the Betting Exchange, we will multiply this number by 2p.

For the purpose of Transaction Charges, bets on financial markets will count as 0.25 of a bet. This will form the basis of the transaction fee, but we will offset this fee against the following amount:

(Commission + Implied Commission) ÷ 2
where
Implied Commission = market losses x 3%

NB: the Exchange Games transaction charge is offset using commission paid instead of commission generated.

Any remaining amount will be charged to your account on a daily basis. Should your (commission + implied commission) ÷ 2 exceed this amount, you will not be charged a transaction fee. Accounts that relate to one person, entity, API subscription or a Master account (Trading version only) with related Sub accounts are treated as one customer for the purposes of transaction charging. Note that no Betfair points will accrue for transaction fees.

Example 1:
You are an API user who pays (commission + implied commission) ÷ 2 of £18.50 throughout a given day.
However, between the hours of 14:00 and 15:00 you placed 2500 bets and between the hours of 15:00 and 16:00 you placed 3250 bets, but in other hours you placed less than 1000 bets.
Your base transaction charge is (2500-1000)*£0.01 + (3250-1000)*£0.01 = £37.50.
Therefore you will be billed an additional £37.50-£18.50 = £19.00 on the following day.

Example 2: You are a Website user who pays (commission + implied commission) ÷ 2 of £20.00 throughout a given day.
However, between the hours of 14:00 and 15:00 you placed 3000 bets on financial markets and 1500 bets on non financial markets. In all other hours you placed less than 1000 bets on all markets.
Your base transaction charge is (((3000*0.25) + 1500)-1000)*£0.02 = £25.00.
Therefore you will be billed an additional £25.00-£20.00 = £5.00 on the following day.


5.Data Request Charges

This section only applies to the Betfair Exchange.

In addition to any commission payments and transaction charges, Betfair customers will be charged a data request fee if they make large numbers of data requests within the same second.

Calculating Potential Charges

At the end of every day, we add up the total number of API and website data requests you made in each second and if you made more than 20 data requests in one second we charge you 0.1p per data request above 20. API calls and website refreshes send requests for different types and quantities of data. We therefore apply a weighting system to calculate the actual number of data requests made in each second.

Data Request Weightings and Exemptions
•Charging only applies to data requests for market data (for example market prices) and private betting data (for example current bets, P&L)
•API market and private data calls are weighted 1 except cross-market current bets calls (i.e where you specify Market ID = 0). These have a weighting of 5
•Market and private data requests made through the website are weighted 2. If you're using the website manually with a mouse, you shouldn't be affected by this charging scheme. If you're refreshing data on the website using an application and want to receive updates more than once or twice a second you may be affected depending on how many markets you read simultaneously and how much data (market prices, current bets, P&L etc.) is sent with each update. Please contact your application supplier if you want more information.

API Market Data Calls


Call

Weighting


Get Market Prices Compressed 1
Get Market Prices 1
Get Market Traded Volume 1
Get Market Traded Volume Compressed 1
Get Detail Available Market Depth 1
Get Complete Market Prices Compressed 1

API Private Data Calls


Call

Weighting


Get Current Bets 1*
Get Current Bets Lite 1*
Get MU Bets 1*
Get MU Bets Lite 1*
Get Bet History 1*
Get Market Profit and Loss 1
Get Bet 1
Get Bet Lite 1
Get Bet Matches Lite 1
* Where market ID = 0 the weighting is 5. Four requests in a second would not incur a charge, a 5th request in the same second would be charged at 0.5p.
Potential Charges Offset by Commission, Implied Commission and API Subscriptions

The following amounts are multiplied by 5 and the total is used to offset any potential charge:
•Total commission you generated during the day
•Total implied commission you generated during the day
•API subscription payments adjusted to a daily figure. A £200 monthly subscription equates to a daily amount of £6.58 [=(£200*12) / 365].

Any remaining charge is deducted from your account the following day. Accounts that relate to one person, entity, API subscription or a Master Account with related Sub- accounts are treated as one customer for the purposes of data request charging. Note that no Betfair points will accrue for data request fees.

Betfair counts requests by logging the time and date that a request is received. Then, the number of requests received in any one second are added together. It is important to note that seconds are counted as wall-clock seconds, i.e. the time between one second and the next on a clock, not as a period of time lasting 1000ms. In other words, if you make 30 requests between 12:02:00 and 12:02:01, you will have exceeded the limit by 10 requests.

You are allowed 20 data requests in any one second*
Any requests over this limit are charged at 0.1p*
At the end of the day, you pay:
•The total charge incurred
•less
•((Your real + Implied commission for the day + Any api subscription adjusted to a daily figure) X 5)
*Note the Data Request Weightings and Exemptions that apply to API calls and Website refreshes
Example 1
You are an API user who generated commission of £6 and implied commission of £4 throughout a given day.
You have also paid your £200 subscription in the last 31 days for direct access to the full API. This equates to a daily payment of £6.58 [=(£200*12) / 365]. For £2000 annual subscribers the daily payment would be £5.48 [=(£2000 / 365].
However, between the hours of 14:00 and 15:00 you made 36 Market Data and Private Data calls per second, but in other hours you made 20 or fewer calls per second for Market Data and Private Data. Your base data charge is 0.1p multiplied by the number of seconds in which you made the additional 16 data requests above the free threshold of 20: (3600*16)*£0.001 = £57.60.
However, because of your commission, implied commission and API subscription you will not be billed: (£10+£6.58)*5 = £82.9 which is greater than the charge of £57.60.

Example 2
You are an API user who uses a Betfair or 3rd party application. You generate commission of £4 and implied commission of £3 throughout a given day.
Your application allows you to choose the frequency with which you request data. You keep the settings at a rate of 5 per second which you know from Betfair or your application vendor means you are making 10 data requests a second (5 market price updates and 5 P&L updates per second). However, between the hours of 14:00 and 15:00 you decide to view 3 markets at the same time. Because the requests for data are market based this means you are now making 30 data requests per second.
Your base data charge is 0.1p multiplied by the number of seconds in which you made the additional 10 data requests above the free threshold of 20: (3600*10)*£0.001 = £36.
Therefore you will be billed £36- (£7*5) = £1 on the following day. If your total commission plus implied commission had been £7.20 or more, no charge would be applied.

Example 3
You use a mix of the free access API and an application that requests data from the website. You generated a total commission of £2 and implied commission of £4 throughout a given day.
However, between the hours of 13:00 and 16:00 your application requested market price updates 11 times per second from the website and once per second via the API. Website requests are weighted 2 and API 1 so this equates to 23 data requests a second.
Your base data charge is 0.1p multiplied by the number of seconds in which you made the additional 3 data requests above the free threshold of 20: (10800*3)*£0.001 = £32.40.
Therefore you will be billed £32.40-(£6*5) = £2.40 on the following day.


Guideline to the impact of commission or implied commission on increasing free requests above 20


Your Commission + Implied Commission in a day (£) 1 10 100
Free API Calls above 20 per second allowed in the day 5,000 50,000 500,000
Average calls per second that can be made in 1 minute without incurring a charge >100 >100 >100
Average calls per second that can be made in 10 minutes without incurring a charge 28 >100 >100
Average calls per second that can be made in 1 hour without incurring a charge 21 33 >100
Average calls per second that can be made in 2 hours without incurring a charge 20 26 89
Average calls per second that can be made in 4 hours without incurring a charge 20 23 54
Average calls per second that can be made in 8 hours without incurring a charge 20 21 37

The number 5000 above is calculated as follows: We charge 0.1p per data request above the 20 per second free threshold. The offset is (commission + implied commission) * 5. (£1/£0.001)* 5 = 5000 free requests. Every £1 in commission (or implied commission) therefore gives you 5000 free requests above the 20 per second threshold.


6.Deposit and withdrawal charges

Charges relating to the deposit and withdrawal of funds to or from your Betfair account are set out in the deposit and withdrawal pages within the ‘My Account’ section on the website. However, additional charges may apply in some cases to reflect the cost incurred by Betfair as a result of processing excessive transactions.

Please note that if you become eligible to incur additional deposit and withdrawal charges, we will contact you before any charges are paid.


7.Premium Charges

The Premium Charge only applies in respect of bets placed on the Betfair Exchange and it does not apply to any bets placed on other Betfair products.

In addition to the other charges detailed above, a small number (less than 0.5%) of our most successful customers will incur Premium Charges.

Any customer affected by the Premium Charge will be notified in advance.

Calculating Potential Charges

Each week Betfair will calculate your ‘gross profits’* made, and your ‘total charges’** generated over the lifetime of your account. The details of these calculations are explained below.

You’ll only be considered for the Premium Charge if your account is in profit and only if the total charges generated since joining Betfair are less than 20%† of your gross profits.

The vast majority of customers, and even the majority of those whose betting on Betfair is profitable since they joined, do not meet both these conditions and will not incur the Premium Charge.

While those conditions accurately describe our most successful customers, they might also apply to new customers who have only bet in a few markets, or those whose accounts are in profit because of a significant big win. To ensure that those accounts are not inadvertently charged, we’ve added two further conditions: any single win that constitutes more than 50% of lifetime gross profits will be excluded from the calculation, and customers will only be considered for the Premium Charge after they have bet in more than 250 markets.

Each customer will also have a £1,000 allowance against the Premium Charge. This means that every customer considered for the Premium Charge will be exempted from the first £1,000 of the charge incurred.

Please note that for the purposes of calculating the charge we will assume that the charge has been in place since Betfair launched in June 2000. This means that we will consider all customers to have generated charges equal to at least 20%† of lifetime gross profits as of the 12th October 2009. However, this also means that for some customers, some or all of the £1,000 allowance against the charge will have been used prior to 12th October 2009 in order to offset hypothetical charges paid. Assuming hypothetical charges had been paid prior to introduction of the charge has the effect of reducing the amount that customers would typically incur.

Each week the customers who meet all the conditions set out above will be charged the lesser of:
•The difference between 20%† of the previous week’s gross profits and the total charges generated during the week; and
•The difference between 20%† of gross profits and the total charges generated during the lifetime of the account.

This means that you will not be faced with a Premium Charge that is more than 20%† of your gross profits for the previous week. Please note this figure applies exclusively to the maximum amount of Premium Charge payable. It is possible for the total amount of Premium Charges and commission paid to exceed 20%†.

Please note that the second of the two calculations set out above can only ever reduce the Premium Charge and will apply on the rare occasion that the difference between 20%† of gross profits and the total charges generated during the lifetime of the account is less than the same calculation for the previous week.

Premium Charges will be deducted from customer accounts weekly (on Wednesdays) in relation to the previous week’s activity (Monday to Sunday).

Accounts that relate to one person, entity, API subscription or a Master Account with related Sub- accounts (Trading version only) are treated as one customer for the purposes of calculating Premium Charges. Note that no Betfair points will accrue for Premium Charges.

*By ‘gross profits’ we mean the amounts won, excluding total charges, less the amounts lost, on all Betfair markets.

**By ‘total charges’ we mean all commission generated by Betfair as a result of your betting plus any Premium Charges you’ve incurred. ‘Commission generated’ includes half the commission paid on winnings, but also half the commission that Betfair makes from the other customers who win in markets in which you’ve lost, which we call ‘implied commission’. When you win, Betfair collects commission at your rate of commission, but when you lose, the commission collected by Betfair from the winners is at their rate. So we’ll determine the commission generated by your betting activity to be:

Commission generated = (Commission + Implied Commission) ÷ 2
where
Implied Commission = market losses x 3%
We divide by 2 because otherwise we’d be counting each pound of commission twice.

Premium Charge Summary

You will only be considered for the Premium Charge if, over the lifetime of your account, you satisfy the following criteria:
•Your account is in profit;
•Your total charges generated are less than 20%† of gross profits; and
•You bet in more than 250 markets.

Two further conditions reduce the likelihood that you will be required to pay the Premium Charge:
•Any single win that constitutes more than 50% of your gross profits over the lifetime of your account will be excluded from the calculation; and
•Each customer will have a lifetime allowance of £1,000 against the Premium Charge.

Each week the customers who meet all the conditions set out above will be charged the lesser of:
•The difference between 20%† of the previous week’s gross profits and the total charges generated during the week; and
•The difference between 20%† of gross profits and the total charges generated during the lifetime of the account.

Examples

Example 1
You have won gross profits of £10,000 since joining Betfair having bet in 800 markets.
You have paid total charges of £980; all of which has been paid through commission generated.
You have not been charged any Premium Charges to date although you have fully used up your allowance of £1,000.
During the previous week you won £500 and paid total charges of £80.
You are therefore charged £20 in Premium Charges ((£500 x 20%) - £80 = £20).

Example 2 - Charge Allowance
You have won gross profits of £10,000 since joining Betfair having bet in 320 markets.
You have generated £1,050 in commission and paid no Premium Charge to date.
During the previous week you won £500 and paid total charges of £50.
In the absence of a charge allowance you would have been charged Premium Charges of £50 ((£500 x 20%) - £50 = £50).
However, the £50 is offset against the £1,000 charge allowance meaning that no additional Premium Charge is paid.
You then carry over the balance of your charge allowance (£950) to offset against potential future Premium Charges.

Example 3 – Excluding ‘big’ wins
You have won gross profits of £8,000 since joining Betfair having bet in 500 markets.
You have paid total charges of £1,025, all of which has been paid through commission generated.
During the previous week you won £5,000 from a single market and paid total charges of £125.
As the win constitutes more than 50% of your total gross profits since joining Betfair, it is excluded for the purposes of calculating the Premium Charge.
However, the commission generated on the win does contribute towards total charges paid.
After the win is removed you have gross profits of £3,000 and total charges of £1,025 and therefore incur no additional Premium Charge.

†Premium Charges at higher rates

Higher rates of Premium Charge will apply to the very small number of customers (less than 0.1%) that satisfy the following conditions over the lifetime of their account:
•Lifetime net profits*** exceed £250,000
•Commission generated less than 40% of lifetime gross profits
•Bet in more than 1,000 markets

The Premium Charge rate applied to each customer that satisfies these conditions is dependent on their lifetime commission generated to gross profits ratio. The exact rate will be determined by the following table:


Lifetime commission generated to gross profits ratio

Applicable Premium Charge Rate


< 5% 60%
5% - 10% 50%
10%+ 40%

Please note that any single market win that constitutes more than 50% of your lifetime gross profits will be excluded from all calculations.

If you satisfy the conditions set out above on 20th June 2011, your lifetime commission generated to gross profits ratio on that date will be used to determine the Premium Charge rate that will be applied to your betting thereafter. If you first satisfy the conditions above after 20th June 2011, your Premium Charge rate will be determined based on your lifetime commission generated to gross profits ratio at that time.

The amount of Premium Charge incurred by each customer will be calculated in exactly the same way as the standard Premium Charge with the exception that the standard 20% rate will be replaced with increased rate applicable to the individual in each case.

For the purposes of introducing a change to the Premium Charge rate that applies to your betting, we will assume that you have always incurred the Premium Charge at the prevailing rate. For example, if the Premium Charge rate applicable to your betting increases from 20% to 40%, we will assume that you have always paid Premium Charges at 40%. However, as explained in the “Calculating Potential Charges” section above, this also means that for some customers, some or all of the £1,000 allowance against the charge will have been used in order to offset hypothetical charges paid. Assuming hypothetical charges had been paid prior to introduction of the charge has the effect of reducing the amount that customers would typically incur.

It is possible that your lifetime commission generated to gross profits ratio will change to the extent that your applicable Premium Charge rate will require adjustment. Should your rate change, we will recalculate as if you had always incurred the Premium Charge at the new rate. If your rate has decreased (eg if your lifetime commission generated to gross profits ratio increases from 4.9% to 5.1% - moving you from a 60% rate to 50% rate), the Premium Charges you ‘overpaid’ when being charged the higher rate previously will be used to offset future Premium Charges. If your rate has increased, Betfair will notify you directly and give you at least two weeks’ notice before the increased rate takes effect. You are entitled to seek review of your Premium Charge rate at any time.

***By ‘net profits’ we mean the amounts won less the amounts lost, on all Betfair markets, less all commission paid and Premium Charges debited.


8.Inactive Account Fees

From 31 December 2010, we will begin charging you* a fee†^ (as indicated in the table below) per calendar month ("Inactive Account Fee") if:
a.there has been no log in or log out recorded on your Betfair account for thirteen consecutive months or more (i.e. no "Account Activity"); and
b.the main licence wallet of your Betfair account± is in credit.

The Inactive Account Fee will be withdrawn from the main licence wallet of your Betfair account (your "Main Wallet") on a monthly basis to the extent that the Main Wallet remains in credit and only for the period during which there remains no Account Activity after the initial thirteen month period has passed. If the Inactive Account Fee is due to be withdrawn from your account and the balance of your Main Wallet is less than €5 (or equivalent currency), the Inactive Account Fee shall comprise the remaining funds in your Main Wallet.

If you have been subject to one or more Inactive Account Fee, we will reimburse you on request the amount charged, up to a maximum of six months’ Inactive Account Fee†.

For example: if your account is transacted in EUR, the last time you engaged in Account Activity was 28 February 2010, and your Main Wallet held funds of €25 as at 31 March 2011, then Betfair would charge its first Inactive Account Fee on or around 31 March 2011, and would continue to charge the Inactive Account Fee on a monthly basis thereafter. If you then placed a bet on 15 May 2011 and notified Betfair that you would like to be reimbursed, Betfair would reimburse you the €10 Inactive Account Fee imposed (€5 on 31 March and €5 on 30 April).

*Customers registered in Australia or New Zealand shall not be subject to the Inactive Account Fee. If your country of registration is outside the UK and you hold more than one Betfair account, you will only incur an Inactive Account Fee in respect of one account at any one time (meaning that you will never pay more than one Inactive Account Fee per month).

†If you are VAT registered and require a VAT invoice, this will be available on request from the Betfair Helpdesk.

^All charges quoted are inclusive of VAT.

±Funds in the Australian licence wallet, the Casino wallet and the Exchange Games wallet of your Betfair account shall not be affected by the Inactive Account Fee.


Currency in which Betfair account is transacted

Inactive Account Fee


AUS 5
CAD 5
DKK 30
EUR 5
GBP(for customers whose country of registration is outside the UK) 4
GBP(for customers whose country of registration is the UK) 5
HKD 30
NOK 30
SEK 30
SGD 5
USD 5


9.Turnover Charge

This section only applies to the Betfair Exchange.

In addition to the other charges detailed above, from Monday 30 July 2012, a very small number of our customers who engage with the Betting Exchange in a particular way on ‘turnover charge markets’ (as defined below) will incur Turnover Charges.

Please note that if you become eligible to incur Turnover Charges, we will contact you before any charges are paid.

Wagering operators in Australia are required to pay a fee based on ‘turnover’ (defined as aggregate of back bets) to certain racing bodies for the right to accept bets on their racing.

Who will pay the Turnover Charge?

This charge will only apply to customers who during a particular week (Monday to Sunday GMT) meet each of the below criteria:


•have matched bets on 50 or more markets on which Betfair is subject to a turnover fee from a racing body (“turnover charge markets”);
•have matched back bets with an aggregate value of AUS $2,000 or greater on turnover charge markets; and
•the total commission generated by the customer on turnover charge markets is less than 1.5% of the aggregate value of matched back bets placed by the customer on those markets.

Total commission generated is half of the commission paid plus half of implied commission, calculated by the formula = (commission paid + implied commission) ÷ 2.

Implied commission is 3% of player losses where players make an overall loss on a single market.

Turnover charge markets will be identified in the Market Information (located on every Betfair market either under the tab entitled "Rules" or under the ‘Rules’ or ‘i’ button).

What is the Turnover Charge?

The turnover charge will be 1.2% of the aggregate value of matched back bets on turnover charge markets.

The charge will be calculated for the period from each Monday to Sunday (GMT), and will be payable on a retrospective basis. The charge will be debited from a customer’s UK wallet each Wednesday, alongside any applicable premium charge.

The charge will only be incurred for any week when a customer’s betting activity meets the criteria. Please note the charge will not be applicable to any lay bets.

Example of the Turnover Charge

During a weekly cycle, a customer has matched back bets to an aggregate value of AUS $10,000 over 100 NSW and Victorian thoroughbred markets. The customer has AUS $100 in Total Commission generated.

Criteria:

CRITERIA APPLICABLE ACTIVITY
Back bets placed in 50 or more turnover charge markets YES 75 turnover charge markets
Matched back bets with an aggregate of AUS $2,000 or greater on turnover charge markets YES AUS $10,000 of matched back bets on turnover charge markets
Total Commission generated on turnover charge markets is less than 1.5% of aggregate matched bets YES AUS $100/$10,000 = 1%

Turnover Charge payable will be 1.2% of $10,000 = $120

How will I be notified if I am required to pay the Turnover Charge?

Customers will be contacted directly by a Betfair representative and informed on the first occasion on which this turnover charge would have been payable.

Customers will also be afforded a one-week ‘grace period’ designed to give them an opportunity to refine their betting habits should they wish to do so.

A summary report of an individual’s weekly activity will also be available if requested.


V 02/13 17/06/13

Even if you disregard PC completely, the fact is that Betfair used to have amazingly low charges (commission), but as traditional bookies have slashed their margins, Betfair have increased theirs (by requiring more points for discounts on commission). They don't seem to be happy being a high volume low margin operator, and so are focusing on increasing margin far more than increasing turnover.

Share price has recovered back to 1016p. Full year results are out next wed (11/6/2014). It will be interesting to see the figures for the sportsbook, usa and the exchange. In particular I would like to see costs and revenues split for sportsbook and exchange rather than just revenues. Sportsbook revenue was showing growth but the costs of that growth is important.

We know Bluesquare was £5m, there are sportsbook adverts, the opportunity cost of moving the homepage to the sportsbook on exchange revenues, the sportsbook bonus and promotions etc. In short, is the sportsbook profitable in its own right yet?? Revenue is not relevant if costs are growing at a higher rate.

On the flip side is the exchange still stagnant? What are the plans to get it growing again? Are there going to be any new incentives to generate liquidity? It seems daft that despite losing money in the last 3 months on horseracing early price betting none of my bets have been on betfair exchange for those markets. Tens of thousands of liquidiity removed from the market due to the high charges.

Its quite simple if Betfair want the liquidity that have to pay for it by allowing low margin winners. If someone can price a book and make 0.5% on turnover that is great for betfair if it attracts losing punters to bet here. Its a lot cheaper than giving away from bets and bonuses and it builds much more loyalty.

FY14 Results out today. Exchange revenues down 1% to £244.3m. Sportsbook revenues up 50% to £36.2m.

New customer promotion based on sportsbook. Price rush and cash out to help grow the exchange through the sportsbook.

Share price doing well so far today.

Note from next year that revenues for Sportsbook and Exchange will be reported together not separately ...