General Betting
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http://winning-sports-betting-guide.com/james-cannings-blog/betfair-premium-charge-explained/
If you are considering opening a Betfair account you should do so. There is no reason to worry about the premium charge at this stage. Even if you turn out to be a profitable bettor with Betfair it will be so long before you have to pay the premium charge and you will profit and learn a lot about betting in the meantime.
If you are already a long term winning Betfair customer there is every reason to worry about the premium charge. It is a greedy money grab and it can ruin your betting career.
Betfair used to be an innovative betting company that stuck it to the “greedy bookmakers” then as they grew bigger and bigger they started to hire people with backgrounds in banking and finance for the top jobs and these executives now run Betfair more like a finance company than part of the betting community. The natural conclusion to this was Betfair becoming a publicly traded company. Now if Betfair make 45 million dollars profit in a year they would consider that a bad thing and share prices would fall because they made 50 million dollars profit last year. Considering making 45 million dollars profit a year, based on a no risk model, to be a bad thing is the definition of greedy but this is the mentality of most publicly traded companies. Yes I used to work there.
If a bank has a segment of customers that get a lot of value out of the product but pay relatively less fees and charges than other customers and the bank has a monopoly on the product the banks normal reaction is to raise the fees and charges on these customers and make sure the fees are so complicated most customers can’t understand them. This is exactly the mentality Betfair applied to its long term winning customers by slapping them with the premium charge.
The premium charge has been a public relations disaster for Betfair. It has made the customers that loved Betfair and were their best source of positive word of mouth become Betfair‘s worst source of negative word of mouth.
How the Premium Charge Works
If you have
-bet on more than 250 markets
-Are in profit over the life of your account
-Have paid less than 20% of your lifetime profit in “total charges”
You are eligible to pay the premium charge at the end of any profitable week in which you paid less than 20% of profit in “total charges”. The amount of premium charge you have to pay will be enough to bring you up to the 20% of profit mark for that week. It is automatically deducted from your account balance.
Don’t count any win that accounts for more than 50% of your lifetime profit in that. You have a £1000 premium charge allowance which means you don’t have to pay the first £1000 in premium charge even after you meet the above criteria.
Then it keeps getting more complicated to make sure no one except the banking and finance industry types who implemented the charge can understand it. One example of how sneaky and insidious the premium charge is is that if you win all your bets in a week and pay 5% commission Betfair will treat it as if you paid 2.5 % “total charges” and make you pay another 17.5% premium charge bringing you to 22.5% which Betfair will say is 20% according to the premium charge rules.
Betfair try to rationalize this by saying if you lost bets they would have applied 2.5% implied commission toward “total charges” even though you actually pay no commision on losing bets. This does not stand up because the premium charge is by definition for winning customers so the implied commission and “total charges” malarkey is just a condition to generate more premium charge and to make it more complicated and confusing.
More details at the official terms and conditions http://www.betfair.com/aboutUs/Betfair.Charges/#charges7
A serious bettor does a lot of soul searching in the premium charge allowance period especially someone who had loved and supported Betfair as much as I did. You might try to change your betting style or make special bets to get your total charges over the 20% threshold and you will definitely re-evaluate other places to bet.
I did both and discovered SBOBET and the Ladbrokes exchange and boy did Betfair do me a favour there! SBOBET odds are almost as good Betfair and the website and brand personality is brilliant. Ladbrokes exchange is almost as good as Betfair because they copied the best bits without having a premium charge! If you are about to have to pay premium charge these two options together will more than replace Betfair.
The premium charge is not going away unless the Ladbrokes betting exchange gets major traction in the market. Betfair have already taken the huge negative public relations hit and now they won’t want to lose the revenue for the effect it would have on the share price.
Happy punting!
If you are considering opening a Betfair account you should do so. There is no reason to worry about the premium charge at this stage. Even if you turn out to be a profitable bettor with Betfair it will be so long before you have to pay the premium charge and you will profit and learn a lot about betting in the meantime.
If you are already a long term winning Betfair customer there is every reason to worry about the premium charge. It is a greedy money grab and it can ruin your betting career.
Betfair used to be an innovative betting company that stuck it to the “greedy bookmakers” then as they grew bigger and bigger they started to hire people with backgrounds in banking and finance for the top jobs and these executives now run Betfair more like a finance company than part of the betting community. The natural conclusion to this was Betfair becoming a publicly traded company. Now if Betfair make 45 million dollars profit in a year they would consider that a bad thing and share prices would fall because they made 50 million dollars profit last year. Considering making 45 million dollars profit a year, based on a no risk model, to be a bad thing is the definition of greedy but this is the mentality of most publicly traded companies. Yes I used to work there.
If a bank has a segment of customers that get a lot of value out of the product but pay relatively less fees and charges than other customers and the bank has a monopoly on the product the banks normal reaction is to raise the fees and charges on these customers and make sure the fees are so complicated most customers can’t understand them. This is exactly the mentality Betfair applied to its long term winning customers by slapping them with the premium charge.
The premium charge has been a public relations disaster for Betfair. It has made the customers that loved Betfair and were their best source of positive word of mouth become Betfair‘s worst source of negative word of mouth.
How the Premium Charge Works
If you have
-bet on more than 250 markets
-Are in profit over the life of your account
-Have paid less than 20% of your lifetime profit in “total charges”
You are eligible to pay the premium charge at the end of any profitable week in which you paid less than 20% of profit in “total charges”. The amount of premium charge you have to pay will be enough to bring you up to the 20% of profit mark for that week. It is automatically deducted from your account balance.
Don’t count any win that accounts for more than 50% of your lifetime profit in that. You have a £1000 premium charge allowance which means you don’t have to pay the first £1000 in premium charge even after you meet the above criteria.
Then it keeps getting more complicated to make sure no one except the banking and finance industry types who implemented the charge can understand it. One example of how sneaky and insidious the premium charge is is that if you win all your bets in a week and pay 5% commission Betfair will treat it as if you paid 2.5 % “total charges” and make you pay another 17.5% premium charge bringing you to 22.5% which Betfair will say is 20% according to the premium charge rules.
Betfair try to rationalize this by saying if you lost bets they would have applied 2.5% implied commission toward “total charges” even though you actually pay no commision on losing bets. This does not stand up because the premium charge is by definition for winning customers so the implied commission and “total charges” malarkey is just a condition to generate more premium charge and to make it more complicated and confusing.
More details at the official terms and conditions http://www.betfair.com/aboutUs/Betfair.Charges/#charges7
A serious bettor does a lot of soul searching in the premium charge allowance period especially someone who had loved and supported Betfair as much as I did. You might try to change your betting style or make special bets to get your total charges over the 20% threshold and you will definitely re-evaluate other places to bet.
I did both and discovered SBOBET and the Ladbrokes exchange and boy did Betfair do me a favour there! SBOBET odds are almost as good Betfair and the website and brand personality is brilliant. Ladbrokes exchange is almost as good as Betfair because they copied the best bits without having a premium charge! If you are about to have to pay premium charge these two options together will more than replace Betfair.
The premium charge is not going away unless the Ladbrokes betting exchange gets major traction in the market. Betfair have already taken the huge negative public relations hit and now they won’t want to lose the revenue for the effect it would have on the share price.
Happy punting!
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If the management are bankers, they better be mindful of this: just because the PC payers hate them, doesn't change the fact that they are in partnership with them. In fact, in the case of 60% PC payers, Betfair is the senior partner! Now many people who pay the Premium Charge at 20% and 40% are innocent punters, just collateral damage. But some of those paying 60% are engaged in genuinely harmful practices. So Betfair is enabling eg 'shell and pea merchants' by implementing a manifestly unfair in-running delay, and taking the majority of the profit from this rip-off.
Ever heard of PPI? |
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"It is a greedy money grab"
Pretty much sums it up really, and absolute PR disaster. And putting the shareholders over the customer ! Lost all the focus of what betfair was all about in the beginning. Should make the PC more fairer at least - and make sure it doesn't also target innocent punters, and charging anything over 20% is unadulterated greed. If the other site do eventually gain more traction - and no PC - they could become a realistic competitor, and betfair won't have a monopoly on the exchange market. Interesting article but will they care (?) |
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been over at purple since june after 3 months paying the pc, the 3% commission makes up for liquidity on some markets, but it is improving and i hope it continues to do so. they can shove there pc charge up there arse, they couldn't care less about the customer and i for one, wouldn't come back even if they stopped it...
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I think you would Tin and let's hope they do.
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It´s a long way to go for the purple one to really compete. There is very few markets on some sports.
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