Premium Charge Increased to 40% - confirmed by Betfair

http://www.facebook.com/pages/Betfair-Premium-Charge-Fiasco/232172673473703

Wonder if that Roy dudie still has that block of shares when this lot were floated. Ouch, ouch and fecking big bad OUCH. CEO off and sinking. Land ahoy ****.

Anyone wishing to bet in running on purple might as well try betting in running with Marks & Spencers

The site is god awefull in running.

Pre race liquidity is fine and very close to prices here, sometimes better.

If your keep bet gets matched if you put it in short you are a million on it wins.

Hardy ever does anything touch very short and get beat, 1.01's there are not the same as here.

No Gruss

In running liquidity on things like golf is a feckin joke, often only £5 - £20 available on any golfer at a price, you will see £20 @ say 34 on a golfer with the next best being £3 @ 21 it is terrible.

It has miles and miles to go to catch up with these thieving koonts but as I said the normal pre race betting is OK.

What with the limits imposed by the high st this game is a shadow of what it once was and from what I can tell thier profits back then were massively higher than they are now and they didn't have all the crapp like virtual / bingo balls / footie all over the world etc

If the spineless dumb fukks could wake up and run a proper outfits perhaps thier shares would recover from the shambles they are in today.

The fear of arbers and traders is possibly the biggest joke in betting history.

If they would take an approach of what the punter does with his bet once struck with them as being irrelivent then imo they would massively increase both turnover and profit

Agree,it would be very interesting to know.He bought before they were available to the general public at £13. something,about £13.50 or so.

Howard

It was a pretty straightforward means of checking my address. I got a letter with a code
that I had to enter into their site. Laddies opened an account without the same silliness
so I imagine it's random or just a 3 6 5 thing.

It won't be long coming though - the drugs and customs people have known for a long time
that losing bets are a good way to transfer money from person A to person B. Same as a friendly
local betting shop owner was always a good place to get some tax-free excuses for your Mercedes
and that swimming pool in your garden.

At the present level, Betfair, who believe only 0.1 per cent of their 3.8 million registered users will be affected

here we go again with the 0.1% are only affected

of the 3.8million registered users how many do you thnk have placed a bet more than once in the last year

mfordy must account for aleast 5% of those

someone call for me ?

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Only 0.5% were supposed to be affected by the original PC!!!!!

hey noodles, why is mine embarrassing post exactly? is it not tantamount to fraud laying horses on the deck or is it supportable because Betfair(and you?) make money out of unfortunate fools who don't know the race as effectively over

Probably be a load of people logging on friendsreunited right now Warwick looking for those long lost 'friends' :)

It most certainly will not effect me, or get anywhere near me. That said, it looks like they want to drive the big hitters away. Why would they want to do that? Surely these guys generate massive amounts of commission?
End of rant[:x]

You'll get no sympathy sportsadvisor - betting profits go to the bloke with
the best source of information (and BF).

sportsadvisor=seething

Sportsadviser - Not everyone on here who makes considerable sums lays fallers and is a fast pic in running bettor.  Get real, this will affect lots of people who just make a steady income year in year out.

thanks pete bloke - but is it fair? I wonder how a punter would feel if I laid them a horse at my joint which was on the deck. they would scream the place down and rightly so.
a caveat from betfayr that 'pictures may not actually be live' or words akin really don't excuse this avenue to profit

This is all the day before they'll be getting their ****-uppance with their investors for their bad results, which are released at 7am tomorrow (Wednesday 28th June).  FYI, I *think* anyone can view their webcast (see http://corporate.betfair.com/)

Correct Willie particularly traders will have massive turnover and betunfair will already be getting a large cut.

3duckeggs i see where you're coming from. But betfair - like bog bookies, dont want winners for their own individual reasons

Thanks Pete. How soon did you get the letter after opening the account ?

Soz, I mean results are release 7am tomorrow Wed 29th june!

Sportsadvisor - If the non live pics where their issue they could deal with this (in my opinion this is just a choice you make  - to play in running or not) but know they are just blanket penalising winners.  They already have their commission and could just stagger commission rates.  Simples.

@ howard

Within a week I suppose. It was only 3-4 weeks back that I opened the account.

Opened a Laddies one on the same day and there wasn't any post.

I hope you're not planning something dodgy [;)]

Maybe Betfair feel that the full-time big hitters on here will simply set off the Betfair charges against their taxable profits when these full-time punters fill in their annual tax return.

if betfair are trying to pull back a profits short fall they are really in the brown stuff.tokill there big hitters is corporate madness and suggests panic.

Looks like some will either have to move,or try a different tact.Maybe try and pick a winner before the race starts

Big smell of POOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO

BETFAIR are to increase the charges on their most successful users to as much as 60 per cent of gross win next month in a move the betting exchange claim will protect smaller players using the site.

FromJuly 18, Betfair will crank up the controversial premium charges faced by big hitters whose lifetime net profits exceed £250,000, who bet in over 1,000 markets, and whose commission generated is less than 40 per cent of their lifetime gross profit.

Betfair introduced the premium charge in September 2008 at 20 per cent, claiming it would cover costs incurred in providing the most successful punters with the platform to profit - the majority of which comes through trading and in-running punting.

At the present level, Betfair, who believe only around 500 of their 3.8 million registered users will be affected by the new charges, claim to break even on the highly profitable users, but state that profits from elsewhere are ploughed into improving the site to meet levels of trading from big punters and advertising to attract new customers to maintain liquidity in the markets.

A spokesman said: “Betfair believes that the implementation of the adjusted charge will provide the business with fair compensation for the service it provides to those impacted customers, who currently pay a rate of commissions and charges that does not reflect the benefit they gain from the Betfair ecosystem.

“We have evolved our pricing model to ensure we have a fair pricing structure for all of our customers, over 99.9% of whom are not affected by this adjustment.

“Since inception we have provided customers with a unique and innovative product that has consistently offered them, on average, the best value on the market. This is still very much the case and we’re committed to ensuring that it remains the case for years to come.”

Betfair shares closed on Tuesday at 771.5p, an increase on Monday's final price of 726.5p. Betfair’s preliminary results for the year ended April 30 will be published on Wednesday.


Thats the Racing posts take on it

Pete thanks. Just going to suggest to my best mate that he opens an account but hes only at home for a month this summer

A few years ago Betfair was the dream.... 'good guys' who took only a small commission in the middle from person to person bets..not like greedy bookies..

Whats 3 0r 4 % comm. when prices are 20% better..

Should have knocked internet & phone bookies for 6 and and looking at maybe 40% of that market..

Poor marketing... yep yep yep... and now lost the instinctive support of the clever punter...

Strange but true...

Can someone tell me please if I am paying the PC and my brother opened a BF account using the computer in our house, would he be liable to pay the PC straightaway?

I probable will be leaving Betfair soon lads.I have been there since the beginning and
I will be in the 40-60% charge so will be moving over to spread betting (not tradefair)
I cannot see how any winning punters can make it pay.
With the in running courtsiders making it even more difficult .
Turn the lights off please.

   99% unaffected ? Liquidity already ify - were doomed !doomed i tell ye !!!

just change your internet provider as they will be doing it on ip address i would guess?? [;)]

Off the topic but greece is on fire as we speak.

yep, they'd link the account to yours very quickly.

That's not greece it's Betfair Towers!!!!

Unfortunately all good things come to an end. Bit like death I suppose except this is a particularly slow strangulation. RIP. Something new will come up with a bit of luck and we can all jump ship and the BF investors will need bicycle clips.

I seriously think BF is on its last legs due to the shocking share fiasco and this.

pmbets = been on mushrooms

I think it is disgusting the way gamblers are treated in this country.If you are a loser you are welcomed with open arms but show the least ability to beat the market you are fecked off.
I thought all this would change with the advent of Betfair but oh no.
The worst thing is they try and justify it with the cost of this and the deveopment of that.
I just hope that this does not lead to the eventual complete degredation of this site

warrac****= definite losing punter.

Why a standard PC rate on everything? They could (say) go up to 90% on in-running as they seem to be targetting this one down to nothing on virtuals, games, casino etc. They could keep before-the-off events to he rate they are now.

(It would surely appeal to them to try to encourage people onto the nil rates ones)

They are not so bright to be thinking like that. They just think hello some people are not bacing many losers. We dont like that we couldnt do it stop them .

pr disaster ffs dont they make you laugh

will 100 percent going purple july18th am having worst ever year on betfair struggling to make it pay on 2.3 commission have been told ill be paying 40percent working from home with slow pictures you couldnt make it up.

it does seem that the company is in some sort of crisis at the moment.  when you start chasing certain customers to squeeze more revenue something is desperately wrong.  betfair is clearly overspending on salaries and infrastructure relative to what it receives.  the sensible answer in such situations, and the cheapest cut (which all good gamblers would appreciate) is to address the costs first and make the company more efficient.

it seems that the initial premium charge was the thin end of the wedge.  it was dressed up in sensible ideas; a gross profits tax to pay for incentives to new customers.  but all it has done is made betfair lazy, and it is behaving like any bad monopoly would.  it has become bloated by success and instead of cutting back and streamlining it has gone back to the well in search of what it thinks of as easy money.  and its money that won't be going to those that lose on the site, its profit for shareholders and pay for an overstaffed office.  the general betfair user will see no benefit from it, whatsoever.

credit to anyone playing on atr/ruk who are effected by this..didnt think it was possible tbh.

There is a very very solution to this issues...... LEAVE and take your money to the other site and then we will all follow because liquidity would be low on here.

But knowing you people, 90% will just stay and continue to bitch about it.

IT'S ABOUT TIME PEOPLE POWER SHOW THESE GREEDY GRABBERS THAT  WITHOUT OUR MONEY THEY'RE NOBODIES.

There is the point that if you had won £250k over 10 years with Laddies,Billies,Baldfred etc would you still be able to bet with them at all.
I suspect the other thing,which I accept BF have largely brought on themselves,is the use of bots ( whether you could stop them I have no idea ). I do know a few people who are vaguely interested in betting and will go into a bookies from time to time,who are not interested in BF because of a perception that pros mop up your money by taking an unfair advantage with techno gizmos.

I'll be joining Betfred...........but not the Gibraltar one.........that makes me wonder, if you bet from Gibraltar, can you welch if Betfair want your premium charge 'winnings'?

What are your views on how this will affect horse racing liquidity here and on purple? For early, pre-race and in running?

Personally I think this will make no difference as people will open new accs etc.

The bigger prob IMO is BF has expanded to far, too fast and cannot keep up with cost of expansion as the cost of acquisition of new players is higher and higher. It has got away from the low cost alternative that sold itself and frankly if it continues on this route will merely be another over marketed sportsbook that is not unique. Real shame - maybe one day someone will set up and stay as what BF used to be.

ive just checked my records.as i suspected this premium rate will not apply to me

how is it possible to win paying 40 percent or bigger if like me you have losing weeks,be interesting to hear reactions from track players cant believe they never have a losing week.

As a 'track player' you do have losing weeks..

By my understanding these will not now be offset as the the PC basis is now 40%(or 50% in my case) not 20%

My rate is set at 50% so here is an example of a month on new structure

eg wk1  Gross win(after comm)  £2,000   PC £1000  costs £800 net win £200
   wk2  Gross win (after comm)  £4,000  PC £2000  costs £800 net win £1,200
   wk3  Gross loss(after comm) -£2,000   PC nil   costs £800 net loss£2,000
   wk4  Gross win (after comm) £4,000   PC £2000  costs £800 net win £1,200

The costs above are estimated as £600 box hire and £200 travel per week, which is not an overstatement.

Thus, in this example somebody grossing 8k per 4 weeks - c 100k per annum now nets £600 in 4 weeks.. £150 per week for his efforts...

That assumes that there is now no remission on PC for losing weeks am I correct in this ?

Online betting exchange Betfair has reported a big rise in annual profits, but admitted that it's revenue growth 'could have been higher'.

It's pre-tax profit for the 12 months to 30 April totalled £26.6m, up 50% from £17.8m a year earlier. It's revenues rose 85 to £368.6m.


---  What exactly is wrong with these figures that make any increase in charges justifiable? Is this what happens when you float a company? You shaft your customers.

I am not affected by the PC because I had a very bad losing year early on in proceedings but it is not inconceivable that one day I may be.

When they first introduced it they hid behind the statement that they were really after bot users who were not paying their fair share. If a few other non-bot users were affected this was just bad luck but collateral damage. Where has that argument gone now? They just seem to want to shaft ANYBODY who wins. 40-60% is ridiculous and will definitely force people to seek other avenues to make money.

What are Betfair playing at?

I can absolutely guarantee that if the returned to their original commission structure which was more than fair and ONLY charge, if they wished, bot users extra (and how can they not know who they are?), nobody would complain  about that and their revenues would skyrocket.

It's not difficult - it's all about pricing and basic maths and economics. This company used to be the perfect model but seems to be run now by a bunch of half-wits.

I despair. Once you price people out of a market that's it - game over.

thanks againsthecrowd i knew that must be the case most people assume its one way traffic working the track.

It's not even as if they need the money.
.
http://www.bbc.co.uk/news/business-13954708

"Online betting exchange Betfair has reported a big rise in annual profits, but admitted that its revenue growth "could have been higher".

Its pre-tax profit for the 12 months to 30 April totalled £26.6m, up 50% from £17.8m a year earlier. Its revenues rose 8% to £368.6m."

Ian_S - can't you read - I posted that 10 minutes ago. This is meant o be a conversation.

why doesnt everyone go to the purple site ?

bilbobaggins 29 Jun 11 08:31 
Ian_S - can't you read - I posted that 10 minutes ago. This is meant o be a conversation.

Your post wasn't there when I caught up with the thread. Presumably you posted at the same time as I was busy copying and pasting.

Simples!

nothing in this game lasts forever.

Fair enough Ian but 17 minutes seems a long time.

Quick PC calculation

So far my lifetime is exactly £250,000

I have paid £100,000 in commission

I sit bang on 40%.
---------------------------------------------------------

First week of new charge I do 20k in, taking lifetime down to 230k and sending the 40% up.

Second week I win 30k, sending lifetime to 260k, and therefore get stuck with a 4k charge. (Will the second week work out like above?)


Swap the two week around you pay 12k PC and find yourself 2k out of pocket, +30-12k-20k= -2k


Can anyone spot anything wrong with the maths, just trying to get the sums right.

Many thanks.

Thread on GB "The mathematics of the new charge" asking similar questions. A bit of a dog's dinner imo.

Can anyone pls advise if it is applied to multiples betting?

Thanks F.N.E

there used to be lots of sharks on betfair, now there is just one huge one

We are developing an integrated Exchange and sportsbook product that will allow us to provide more in-play markets as well as giving customers guaranteed execution in less liquid markets. We believe this liquid Exchange and sportsbook combination will be unique to Betfair and will allow us to capture a greater share of wallet from existing customers as well as attracting new ones.

pc payers will soon be paying supermarkets £57.60 for a £36 shopping bill,  seems reasonable in the betfair world.

By: This user is offline. Wadders
Date Joined: 14 Dec 02 Add contact | Send message
When: 29 Jun 11 09:43 Joined: Date Joined: 14 Dec 02 | Topic/replies: 32 | Blogger: Wadders's blog
Can anyone pls advise if it is applied to multiples betting?

I asked this question yesterday, here is the reply:

Thank you for your e-mail.

I can confirm that these bets do not count towards the Premium Charge as you do not pay any commission on Tote or Multiple bets.

Please do not hesitate to contact us if you have any further enquiries.

Kind regards,

We are developing an integrated Exchange and sportsbook product that will allow us to provide more in-play markets as well as giving customers guaranteed execution in less liquid markets.

==========
wtf?  betfair is going to start taking positions?  cross-matching is one thing, but surely this oversteps the mark.  you can't be an exchange and take bets, there's a massive conflict of interest

They were already taking positions on their "high roller" service...

againstthecrowd
As a 'track player' you do have losing weeks..

By my understanding these will not now be offset as the the PC basis is now 40%(or 50% in my case) not 20%

My rate is set at 50% so here is an example of a month on new structure

eg wk1  Gross win(after comm)  £2,000   PC £1000  costs £800 net win £200
   wk2  Gross win (after comm)  £4,000  PC £2000  costs £800 net win £1,200
   wk3  Gross loss(after comm) -£2,000   PC nil   costs £800 net loss£2,000
   wk4  Gross win (after comm) £4,000   PC £2000  costs £800 net win £1,200

The costs above are estimated as £600 box hire and £200 travel per week, which is not an overstatement.

Thus, in this example somebody grossing 8k per 4 weeks - c 100k per annum now nets £600 in 4 weeks.. £150 per week for his efforts...

Why isn't it -£2.8k so - £200 overall not +£600??

There is another error.  Week 2 gross win is £3200 not £1200.

"We are developing an integrated Exchange and sportsbook product that will allow us to provide more in-play markets as well as giving customers guaranteed execution in less liquid markets. We believe this liquid Exchange and sportsbook combination will be unique to Betfair and will allow us to capture a greater share of wallet from existing customers as well as attracting new ones."

Canary where did you read this ?

Sorry, net win.

that's true, stake, but on an ad-hoc basis and in response to a particular demand.  but this is different, just getting involved for the sake of it.

don't forget, they have access to everyone's P&L on here, and if they see someone with a successful strategy, they can replicate it with better market access and zero cost (comm).  this is a truly horrible situation

A thought.. could Betfair be bowing to gov pressure?
If someone in hmrc thought there was a raft of tax dodging punters then they could get their cut from Betfairs increased tax bill.

The only way forward is to increase stakes, in the same way that buinesses pass on their overheads to their customers.
A never ending downward spiral

Re my post... Rollo ,sorry yes you are right... loss of £200 (not a profit of £600)forgot to take costs off that line..

  JD... that line I think is correct... taking pc as 50% it is £4,000 GP... £2000 PC   £800 costs.. so £1200 net profit..

Just trying to spell out the position of a 100k per annum gross winning punter on track after new PC charge....    Result is zero profit...

betting_quant it is in Betfairs financial statement that came out today with their announcement of thier results.  I will try and find a link.

Sports

Betfair is a sports-led business because we have a unique sports betting product. Sports betting is the largest segment of online gaming, generating some 40% of all online betting and gaming revenue. In the markets where we operate, around 20% of total sports betting is now placed online, and this will continue to grow. Being a sports-led operator has other advantages. Because sports betting customers are more loyal - and are naturally attracted back to the operator's website by exciting sporting fixtures - the marketing spend on attracting and retaining sports customers is lower than in other forms of gaming.

New product delivery is key to driving revenue growth. The Betting Exchange is our lead Sports product and will remain so. But we will enhance our customer experience in two important ways.  First, the investment we have been making in our platform will enable us to launch a faster version of our website during FY12, with a completely new look and feel and greatly improved navigation. Second, we will extend the number of markets we offer to customers. We are developing an integrated Exchange and sportsbook product that will allow us to provide more in-play markets as well as giving customers guaranteed execution in less liquid markets. We believe this liquid Exchange and sportsbook combination will be unique to Betfair and will allow us to capture a greater share of wallet from existing customers as well as attracting new ones.

canary thanks. I posted this up on general betting months ago, no one beleived me, so I want to go back and say I told you all!

JD - you're wrong mate.

The other thing to note in Betfairs financial statement is regard to High Rollers.  This apparently has now been discontinued but basically just before the exchange was floated a number of large losing clients were moved to a seperate subsiduary in Gibraltar where they were allowed to phone up and bet whatever they liked at Betfair prices without it hitting the exchange.  The turnover on racing at the time was down accordingly. 

"During Q1, Betfair ran a trial service with a small number of ''high roller'' customers. By their nature, the size and scale of the betting patterns of these customers was too large to be fully hedged through the Betting Exchange and so, during the trial, Betfair necessarily accepted proprietary risk on these bets.  The trial proved profitable, but the volatility of returns from this business was such that Betfair decided at the end of the quarter not to proceed with this product offering."

The above clearly shows that Betfair are keen to lay bets themselves to large losers rather than letting other exchange players take the "easy money".  It does obviously have risks attached though as it only takes a Vietch type character or similar to get hold of one of these accounts for a while for the fun to begin.

A thought.. could Betfair be bowing to gov pressure?
If someone in hmrc thought there was a raft of tax dodging punters then they could get their cut from Betfairs increased tax bill.
---------------------
but betfair already cover this with the current premium charge; everyone pays a minimum of 20% on gross profit.  betfair then pay tax to the hmrc.  in effect customers on here pay tax, whether through comm or premium charge

It will be interesting as well to see how the integrated sports book/exchange works.  It can have few benefits for anyone other than Betfairs shareholders.  As marked cards go with regard to sport given the clients bets Betfair will be able to see and then copy/queue jump in front of them surely opens a potentially horrific scenario of them being able to lay exactly the bets that they want.  Its like putting your hand into a tombola and knowing which selections have all the prizes in.

What will stop people from using a new or losing account from a relative or friend ?

How can people betting from tracks using someone else's account be identified? They aren't at home on the same IP address location

What will stop people from using a new or losing account from a relative or friend ?

------------
it won't.  it will encourage it.  if you stand to lose £50,000 in extra pc, I guess you would happily slip someone you know £10k for use of their id.

the people that will really suffer are ones like Manchesterskytrain (sp?) who talked of netting £600 last week, but would only get £350 after the hike

In the early days B/f were bending over backwards to accommodate the big players so as to provide the liquidity they needed.  As is the case with large corporations they have now become arrogant and are determined to extend profits by whatever means are available.  Could be that in the longer term they will regret the decision if the the guys in purple attempt to woo the bigger players away in exchange for providing better liquidity. From the exchanges point of view, liquidity is the key factor when it comes to attracting punters and if the big players got together and decided to withdraw their support I think B/f would capitulate.

Sugarfoot you are right but i would say manc is an extreme case. He appears to back very few losers yet he has i believe been paying premium charge without making any attempt to avoid it. I have paid it in the past but in the second half of last year did a lot of arbing / trading which while making an overall profit left me five figures down on here. He could do the same but he maybe doesnt think its worth the effort.

Stewardsenquiry if you read todays financial statement you will see that Betfair plan on moving into the void to provide the liquidity lost by the removal of the PC payers.  My guess is they will have taken the most successful ones copied thier models and plan on providing the liquidity themselves.

purple fellas, lets do it but we ALL have to go!

It will be tricky to replicate IR though !

the more people that use purple the better the sit e will be (obviously). they would soon be on a par with this place.

Why doesnt racing start its own exchange ? They cant be making much from on-course bookies at most meetings. Could have big screens at courses showing live prices. Phone/ i-pad your bets. They could even get away with commission at more than 5%. People would like the idea of racing making the profit rather than shareholders.

When the say 'play in over 1000 markets' that's per year I assume??

I remember when they brought in the 20% it really depressed me

I am not a winning punter, but part of the fun of gambling  is the dream of eventually making a living from it and paying no tax on it.  When they introduced the 'premium charge' it was a tax on betting and as such was depressing. 

Maybe it had something to do with me playing mostly poker nowadays, no premium charge.  If I get good at poker, betfair will not slap a 60% tax on me as they know I can easily go elsewhere. 

Now the charge is 60% is has destroyed all dreams about horseracing.  I often think of giving trading on horseracing a go, but this has put me off.  If I won a lot from it, it would infuriate me to give betfair 60%