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A VIEW FROM ONE OF BETFAIR'S KEY SHAREHOLDERS
A VIEW FROM ONE OF BETFAIR'S KEY SHAREHOLDERS
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possibly we've had a narrow escape. don't think koch's pareto stuff works with betfair; the 20% he's interested in are linked to the other 80% in ways that make the principle non-applicable.
It certainly doesn't - big fish need something to eat. http://green-all-over.blogspot.com/2013/06/lazy-tiddlers.html Yeah, that was my thought when I read the article. However, he presumably means the 80/20 split to be applicable just to the set of net losers. Presumably there is a small group of large recreational players who are the 'big fish' referred to by Koch. |
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How about something like this:
Guy#1: Says that he has backed Rooney to score the first goal. Guy#2: - What odds did you get? Guy#1: - 4.5 Guy#2: - Hahahaha, I got 6 at Betfair. Guy#1: - Yeah, right. I checked the odds at Betfair.com, and it was only 4! Guy#2: - I got 6 at Betfair 10 min ago. That's equivalent of 5.75 after commission even if you don't have any discount! Guy#3: - He must have seen the odds offered by the Betfair sportsbook. Guy#2: - Oh, of course. When you go to betfair.com click the little yellow box in the top left corner, that takes you to the exchange. Guy#1: Goes to betfair.com on his laptop and clicks the little yellow box in the top left corner. - Rooney is 5.7 now. How much is that net of commission? Guy#2: - 5.465, assuming no discount. Guy#1: - Grrr, still a lot better than 4.5. Guy#4: - Did you say that you've backed Rooney @6?? Surely he is a lay at that price? I'm going to lay him. Guy#1: -Lay? Guy#4: -It means that I bet against Rooney scoring the first goal. At Betfair the exchange, but not Betfair the sportsbook, you can always lay a selection if you think the odds are too low. ***The match starts, and Rooney scores the first goal. Guys#1 and 2 celebrate wildly! ***A couple of days later the friends meet up again. They go shopping. Guy#1 wants to buy something, but he's £50 short. Guy#2: -If you had placed that Rooney bet at Betfair.com/exchange you could have bought it *LOL*. Guy#2: Gets an email from Betfair saying that he from now on will have to a premium charge if his commission generated is too low in relation to his gross profit. Guy#1: ***Starts to laugh hysterically, but then he also gets an email. It's from his high street bookie. They've closed his account because they think he might be a winner! Guy#2: ***Starts to laugh hysterically*** - Maybe the premium charge isn't so bad after all. At least they don't close my account even though I have started to win. They just take a smallish part of my profit! |
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Has BF lost its way? Yes it has.
How can things be improved? By returning to 10 basic principles on which BF should be run 1. Encourage players to bet as much and as frequently as possible. 2. DO NOT DIS-INCENTIVISE THEM IN THIS REGARD 3. Never close a winning account – it’s what separates BF from bookmakers 4. Ensure sufficient liquidity for markets to function 5. Do not penalise or encourage one group of customers over any other group – all are welcome 6. Keep charging simple so that players can easily calculate profit & loss 7. Settle markets quickly and efficiently 8. Avoid market mal-function at all costs 9. Provide prompt and courteous customer service 10. Remember always – No customers, No business |
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 Mr. Anderson |
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mr anderson , 20 - 60 % of anything is not small
do you pay pc mr anderson ? |
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Betfair should be run with only 1 principal aim :-
...to maximise profits. End of. |
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Johnny The Guesser • June 6, 2013 5:04 PM BST
Betfair should be run with only 1 principal aim :- ...to maximise profits. End of. No offence, Johnny but that is the most facile and stupid post I have read on this subject. Maximising profit in the short term might be long term suicide. Likewise, maximising long term profits might be missing opportunities in the short term. Many shareholders would argue that the share price is more important than profit because it equates to long term prospects. Doing more than the bare minimum for staff and customers alike erodes profit but is essential for public image, quality of service etc. There will be many differing views on how to maximise profit, so it is hardly "end of" as you so conceitedly put it, it's more like "beginning of". |
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Johnny did you previously work for Northern Rock?
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The Guesser still spouting sh1te
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yes, saying "to maximise profits" without giving a timescale is utterly meaningless.
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Shareholders loving it Share price down 9% since 10Th May to £8.14 - The offer of £9.50 that was turned down looking like a bold decision. Lets hope they keep on "maximising" profits
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Guy#2: Gets an email from Betfair saying that he from now on will have to a premium charge if his commission generated is too low in relation to his gross profit.
-------- if Guy#2's having outright back bets at 6.0 on Rooney FGS, he's not getting that email NAP |
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what about those that haven't won £250,000 but are paying 20% ?
5% is small 20% or one fifth is not hth |
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well...okay. so long as you promise that's all he's doing.
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most people pay at least 10%
do you mean most pc payers ? I think it's reasonably fair to say that your reality of what is small percentage wise needs calibrating . if you go into a shop and the paper , milk or chocolate bar has gone up by 5% it's not much , but if it went up 20% that is large £1 - £1.05 not much of a rise £1 - £1.20 a large rise at what point does a % out of 100 become large ? |
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Of course there are different views on how to maximise long term profits...
..you guys have your one sided view, that abolishing the PC, encouraging the pros to match more bets and therefore generating more (short term) commission for BF is the way ahead. The directors appear to believe it is in the best long term interests of the company to sacrifice some short term commissions (and liquidity) to prevent chunks of cash being sucked from the ecosystem by these regular winners. This cash is then available to be rebet over and over again generating even more long term commissions for BF. Who would you back to be right?..the directors who have all the facts and figures available...or a bunch of aggrieved punters on a forum ? |
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not the current directors.
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Johnny The Guesser,
You lost the argument on other thread 'THE PREMIUM CHARGE MUST BE SCRAPPED' and you appear here again spouting the same rubbish. It is quite clear that the premium charge was and is a mistake for the exchange. The directors appear to believe it is in the best long term interests of the company to sacrifice some short term commissions (and liquidity) to prevent chunks of cash being sucked from the ecosystem by these regular winners. This cash is then available to be rebet over and over again generating even more long term commissions for BF. Who would you back to be right?..the directors who have all the facts and figures available...or a bunch of aggrieved punters on a forum ? As you know well (from the other thread) Mark Davies who had the 'facts and figures' was part of the Premium Charge decision back in 2008. He supported it then. He now says it was not a good idea as they never accounted for the long term affect it would have on the good will of customers. You are being very sneaky coming back on a different thread with the same false arguments. |
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This cash is then available to be rebet over and over again generating even more long term commissions for BF.
No the cash is being bet with other firms because there is no liquidity here due to the costs being too high. Early racing is back with the bookies with best odds guarenteed. Football betting is with pinny and sbo. Betfair cannot compete on price anymore. |
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In that other world, the real one, the premium charge would be called a "tax." And, as we all know, everyone who pays tax is delighted to do so because we all understand that the Government has a deficit to fund, not to mention an ever increasing debt mountain. We fully understand the reasons why tax is there, which is why we all want to work harder and harder so that we can pay more of it, so that Government can spend our income for us, in ways which are, of course, highly productive and never wasteful.
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BF has moved on from the "all matched bets are good for business" notion.
As the exchange model has evolved, the directors now understand that some matched bets may even be bad for business. These bets need to attract higher fees or be discouraged entirely. The concept of charging higher prices to those customers that need your services the most, or have the ability to pay more, cannot be argued with. It's basic economics. Why would BF not seek to do this?...every other business in the land does it! Does BF need the pros more than the pros need BF? You think they do...the company would appear to think otherwise. |
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I dont know why you insist on arguing this AGAIN!
Betfair's revenues were growing at an explosive rate before the first Premium charge. They slowed after the 20% PC. After the 40-60% PC the growth STOPPED. You are arguing that because a policy is in place by the 'directors' that it is the correct policy. That is daft. The policy was brought in at 20%. Someone in the company probably argued against it but on balance they decided to do it. Then in 2011 they were trapped in a corner. Admit they were wrong and scrap the PC or go in for an even bigger tax. Some one (no one knows who) came up with the 40%-60% scheme that has caused the decline in revenues. Whether that person is still at Betfair is unknown. If the PC did not already exist (and the directors knew the long term consequences of it) they would not bring it in now. The extra commission from the liquid markets would have far outstripped the tiny revenue the PC gives them. Now you have a the status quo where the current PC exists. There is pressure on short term revenues from the stock market. The risk now is that scraping the PC will take several million off the profits immediately whereas the benefits will come over the medium term. That is a hard policy to explain to short term investors. |
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Johnny, obviously you are a guesser, rather than a pro.
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i thought that the premium charge was introduced to fund betfairs advertising/recruitment of new punters
etc as such it isnt (wasnt) a bad idea however i dont think betfairs adverts get the message across, and seem, to me , to be advertising to people who are already aware of betfair, and not to new blood meanwhile betfair lose customers because national governments prohibit the use of betfair so the premium charge may have been a good idea at the time, but as it seems to have had an adverse effect on some liquidity that it cannot replace then surely they can at least look at a suspension of the charges on a trial basis to see what the effect would be ??? |
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frog2's campaign suits his interests, not the betting ecosystem's. If someone wins £10m, it is fair enough to ask them to stump up at least £5m, if they were paying a lot less than that before the PC. Johnny the Guesser is just on the windup.
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frog2
You obviously do not read my posts carefully. You guys have plenty of opinions about what causes what and why,(your 12.53 post is a perfect example), but have only scraps of actual facts and figures on which to base your one eyed views. The directors, however, will have all of the financial data available to them when setting pricing policies and key business strategies. I've never stated the directors are correct in implementing the PC,but as an outsider,I would trust their informed business opinions over those held by the aggrieved punters on the forum. A few FACTS - There will be a multitude of reasons behind why BF's growth has stopped. (How about a worldwide recession for starters? - "No, let's ignore that - it's all down the PC!") - The directors answer to the shareholders ,nobody else -certainly not to you guys! If the directors mess up,they get sacked, and somebody else has a go. That's how it works. - The directors job is to maximise profits and hence shareholder returns. Their job is most certainly NOT to run an utopian betting exchange for the benefit of the punters. - The PC is a mess, I agree!!. However,the concept of a (near) monopoly charging higher prices to customers that need its services the most is certainly economically the right thing to do.In fact,the board would be not be doing their job properly if they chose not to! Now back to opinion - I'm sure BF would love to close some 'unprofitable' accounts but wouldn't want to attract the adverse publicity this would bring ("Winners not welcome").The PC will have quietly encouraged some of these punters to 'move on'. As an outsider I have no idea whether the PC actually 'works'in the long term or not - I have no detailed financial data to analyse. Do you? But, as a tool to :- - increase profits - encourage 'unprofitable' accounts to move their business elsewhere - and reduce cash withdrawals ...it makes sense. |
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I have never paid the premium charge.
But I do think its in all the stakeholders interests to see Betfair's market share of the world betting markets grow and for more liquidity to be on the exchange. I think everyone would benefit from that; small users, big users, traders, outright gamblers, long term shareholders and management who are on long term incentive plans. The only people it doesn't suit is short term shareholders and management who have short term incentive schemes. Its the same as the situation with any government. If your incentive is to get more short revenue you increase taxes. In the middle ages ministers would be given incentives by the king to get more revenue to pay for wars etc. They kept raising the taxes to pay for it. The problem is eventually the taxes are so high people work less and find ways of avoiding them. The tax take goes down not up. The economy shrinks instead of growing. Betfair are taking the short term view rather than the long term one. They have basically given up on trying to grow the exchange and are raising taxes on it instead. |
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a very good post frog well done
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i been ft on betfair for approximately 10 years i turned over millions each year...literally and generated around £800 a week commission the last 4-5 years
i only qualified for PC2 as my lifetime gross commission to gross profits was over 30% yet i'm now crippled bcause i have been penalised for winning over £250k in my lifetime yet someone who has generated diddly squat can earn £250k paying only 20% where is the fairness in that ??? considering this has being my FT income for over 10 years is is not reasonable to assume £250k is a paltry figure....why not £1million etc |
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oh and to add insult to injury i have constantly complained about it...to be told if i don;t like it i should find another way to earn my income!!!
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key accounts member of staff told me that earlier this week!!!!
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i was told because i have won so much from betfair i have to pay A PREMIUM CHARGE for a PREMIUM SERVICE...ffs
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now is there any wonder why i and many others i know who have being FT on here for so long feel so much bad will towards betfair MR CORCORAN....seriously, you treat your key customers with UTTER CONTEMPT
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frog2
You obviously do not read my posts carefully. You guys have plenty of opinions about what causes what and why,(your 12.53 post is a perfect example), but have only scraps of actual facts and figures on which to base your one eyed views. The directors, however, will have all of the financial data available to them when setting pricing policies and key business strategies. You over estimate what the directors actually do. The key shareholder this thread is about did not even have a Betfair account for several years as a director. Its management that decide policy. A few FACTS - There will be a multitude of reasons behind why BF's growth has stopped. (How about a worldwide recession for starters? - "No, let's ignore that - it's all down the PC!") Hills online revenues up £100m last year during the 'recession'. Other firms growing YOY also. - The directors answer to the shareholders ,nobody else -certainly not to you guys! If the directors mess up,they get sacked, and somebody else has a go. That's how it works. Do you mean management? If the management were doing so well why was there a takeover bid to change policy? A guy with a 6.5% shareholding tried to takeover the firm but failed. - The directors job is to maximise profits and hence shareholder returns. Their job is most certainly NOT to run an utopian betting exchange for the benefit of the punters. Totally agree. As a non-PC customer I think their pricing strategy is wrong. As do many others including people in the founding team. Its not just the PC. Its the high commission on prematch soccer, tennis and other events that is stopping growth. With no PC and lower commission I would be happy to move all my soccer turnover to BF. At the moment it is elsewhere because its cheaper. - The PC is a mess, I agree!!. However,the concept of a (near) monopoly charging higher prices to customers that need its services the most is certainly economically the right thing to do.In fact,the board would be not be doing their job properly if they chose not to! Betfair has a 'monopoly' where it is cheapest. e.g. inplay sports for traders. It has this monopoly because it charges per market. If it charged more people would not bet. Where it doesnt have a monoply - e.g. early racing, preplay sport its liquidity is rubbish because it charges too much. Now back to opinion - I'm sure BF would love to close some 'unprofitable' accounts but wouldn't want to attract the adverse publicity this would bring ("Winners not welcome").The PC will have quietly encouraged some of these punters to 'move on'. Clock beaters - fine. But in the long run their time will disappear anyway. Do u really want to get rid of market makers? Guys who make £100k a year but generate millions the other side to BF in commissions? I dont think so. As an outsider I have no idea whether the PC actually 'works'in the long term or not - I have no detailed financial data to analyse. Do you? Just the publicly available info that shows the exchange liquidity is on a downward spiral. I heard that the PC generates £4m a year. It costs very little to generate so on a company with only £20m-£30m profits I can see why they wouldn't scrap it. But compared to £380m revenue its peanuts. But, as a tool to :- - increase profits yes £4m must of which goes straight to the bottom line. - encourage 'unprofitable' accounts to move their business elsewhere dont get that theory. Do the NYSE say 'no thanks' to profitable banks? Liquidity is the key for an exchange. Without it losers and winners move elsewhere. - and reduce cash withdrawals See above. BF would rather have 60% of a small cake (plus 100% of the otherside) rather than 10% of a massive cake (and 100% of the other side). Makes no sense in the long run. ...it makes sense. How? |
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ironic that JTG is criticising people for forming judgements with only scraps of info yet also accusing people of effectively talking their book without actually knowing what their PC status is.
FYI, I haven't paid any PC for over 3 years. from a narrow perspective, it's in my interest for the charging regime to remain as it is. |
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Thats the situation. People like us that do not even pay the pc can see the problems it causes. Someone just had an excel spreadsheet and filtered out an amount of cash they could make by increasing it. Of course no thought was given to implications to the exchange as a whole.
How much would be traded pre-match on EPL games with no PC and commission at 0.5%? £100m plus I reckon. Maybe more. It would wipe out all the agents and bookies in Asia. But while Betfair continue to think small and grab a few quid in PC they have no chance. |