Wednesday, 24 September 2008

Surely Not?

Following the highly controversial introduction of Betfair Arcade games, it was with an open mouth that I read the following post on the Betfair Forum this evening. Surely this can't be true!
I am RG. I won on the Arcade without even realising that I was playing it for real. It is unbelievably easy to log-in to see what the fuss is about, select to play a Demo game and then navigate to a new game where you are playing for real. I honestly thought i was playing with imaginary money. I would never dream of playing in the Arcade with real money. Playing for a grand a spin I won about 14k and gave 9 back all in the space of 3 minutes. I am delighted that i got bored after that long.
Obviously I have been very lucky and done well out of this but there are 2 points that are very worrying. Firstly and most importantly it should be far more difficult to "accidentally" play these games. Not being aware that you are playing may be a little stupid but if I could make that mistake then I am sure others could.
Secondly is the nature of the games, I was able to turn over roughly 20k in 3 minutes. Even when I won it was ready to press the button to bet again in 5 seconds. These games are highly addictive and repetitive. In the past I would have expected more of Betfair but now I am not at all surprised. I have voiced my concerns to my account manager but don't expect anything to change. Betfair don't listen to their customers anymore because they honestly don't care although there are still a very many good people still working there.
Elsewhere, it nice to see the Guardian are still covering the diabolical Betfair Premium Charge.

Sunday, 21 September 2008

Out Of Sorts

Since Last Post P/L: £548.32
Monthly P/L: £548.32

With all this uncertainty surrounding the new Betfair Premium charge it should of no surprise to learn that my trading over the last few weeks has been erratic. Yep, I've made a profit but my actions have been undisciplined and my results far too inconsistent. It seems that whenever change occurs in my life the same pattern emerges as exactly the same thing happened when my son was born in March. Maybe it's not just Betfair that find managing change difficult after all?!?

As today signals the last day of Premium Charge freedom I should now be in a position of clarity but if I'm honest I still haven't figured out what my next actions are going to be. Of course, there are a list of options; increase my stakes, explore Betdaq, dabble with spread betting etc. but I'm keen not to rush in and get my fingers burned (act in haste and repent at leisure and all that).

I still feel victimised though so this hasn't stopped me from taking a few steps to show my disapproval:
  • I withdrew £2242 from my Betfair account earlier in the week. Not allowing Betfair to make a few pennies in interest has given me some satisfaction but I've left enough in there to act as a temporary float whilst I mull things over.
  • I've created a jpg image on the left hand side of my blog that illustrates I oppose the new Premium Charge. This may seem petty but I'm sure that Betfair think this issue will blow over so I'm keen to keep reminding people it exists. If you want a copy of the image to display on your own blog/website etc. then leave your email address in the comment section of this post and I'll send it over to you.
  • After receiving an invitation to attend the Betfair Academy programme I politely declined. Even though this is something that did interest me, how can I now promote a company that targets winners? The link to Betfair will remain on my link list but only to show the exchange still exists (please note - I don't get any type of commission from that link).
  • Created my own little Bollywood spoof movie about the charge. View it here. Just a little bit of light entertainment to accompany the many other spoof movies posted on the Betfair forum.

It's also interesting to learn that the people over at Bet Angel seem equally as disgruntled as me. This is the notice that currently appears when you log-in to use their software:

We note that despite being lobbied by us and our customers, Betfair have not made any further statements about the new charges. Therefore we have to assume they will come into effect on Monday. If they make no further statements over the weekend we plan to initiate a web conference session with interested users on Monday evening 7PM UK time. During this session we will have an open discussion and lay out our thoughts and plans. The session will be hosted by Peter Webb. Please check back on Monday morning on this page for details of how to join the session.

I'll be joining the session to see what Peter and the team have to say but I'm not too hopeful. I'm guessing that it'll go along the lines that steps have been made to design alternative software but these things will take time etc. If this is the case then it looks as though the exodus to Betdaq may have to be put on hold for the time being.

So that's that, but as some of you may have noticed I haven't posted any results for September yet. I felt that talking about wins/losses was inappropriate given the circumstances so here's a small catch-up:

American Football: £48.94

Cricket: £251.24

Horse Racing: £17.41

Golf: £84.54

Motor Sport: £177.04

Rugby Union: £39.46

Special Bets: £62.39


Monday, 15 September 2008

Big Questions

I could have written this post on Friday, but instead decided to wait a few more days to let the dust settle. I want this post to have some meaning so rushing in without fully thinking things through would have been wrong. Sleeping on my thoughts and letting the emotions die down a little seemed the sensible option.
Okay, I think I'm ready...
My initial reaction when Betfair announced the new premium charge was the same as many others that frequent the Betfair forum - utter disbelief! As a loyal customer since December 2001 I have championed the company's cause to anyone that would listen. This hasn't always been an easy task (especially to the non-gambling community) but despite this I've continued to enlighten those about the Betfair revolution as best I could. During this time I've also been happy to pay my way through commission charges. Afterall, Betfair have provided a fantastic service and without them there wouldn't have been the opportunity for people like me to 'trade' on sporting events. Granted, it's only within the last couple of years that these sums have become significant in value but even before this I was still making a regular contribution - a contribution that Betfair could rely on. This has left me baffled. Why would Betfair what to victimise their most loyal and supportive customers? What have I done to make them want to alienate me? Surely I'm a customer who (hopefully) inspires small time players that bigger things are possible and in turn this must benefit the exchange through more liquidity etc.? Shouldn't I be considered as a cost saving when it comes to marketing budgets?
Apparently not, and despite my best efforts I can't answer any of these questions with a level of confidence in what the answers may be. If you look at the replies during their recent Q&A session you'll see explanations based on the cost incurred in attracting new users to the exchange etc. but is this my problem? Why am I being penalised for working harder than others and winning as a result? I'm not a Bot user and I don't syphon Betfair data - it just doesn't make sense! The business model adopted by Betfair over the last seven years has been hugely successful and whilst I appreciate investments have been needed to cope with the increase in business levels, surely the interest received on loyal clients' funds must have helped soften the blow? As a whole, the Q&A session they hosted was a complete joke which raised just as many questions as answers but don't take my word for it, judge for yourself by going the to the Forum Chat section of the Betfair Forum. If you haven't already done so, I'd also suggest you look at Betfair's last set of annual accounts. This isn't a company that's struggling, far from it - this is a company that's growing quickly. Now that it's hit a certain size it would seem that the initial ethos behind the original idea has been lost. Is it a coincidence that the Betfair Big Wigs have decided to launch these changes whilst Andrew 'Bert' Black is on a sabbatical?
This leads me onto another point - change. As a rule of thumb not many people like it. Generally, people like routine and a feeling of stability, so introducing changes that would affect a gambler's 'income' was always going to be difficult. This bit I concede, but what I can't justify is the complete shambles Betfair have made in their attempt to communicate the concept. If any of you are familiar with the works of Kurt Lewin then you'll already know his thoughts on change needing to be a three step process - unfreeze, change, refreeze. The unfreeze stage here is crucial, as it tells the world about the 'need' and prepares those that will be affected. It helps break down defences and helps those involved see the bigger picture. Have Betfair missed this important part of the jigsaw? I think so. Emails and Q&A sessions will only work to a certain degree after the event, with confidence in the company already dented, how much damage will be irreversible?
I haven't even touched on the complexities of the premum charge - I'll leave this to fellow blogger Cassini - but in short, this has become a PR disaster with Racing UK discussing the topic at length, the Daily Mail reporting of 'crisis meetings' and some 'sharp minds' using YouTube to illustrate their frustrations.
I could go on but I won't. Hopefully you can see the points I'm trying to get across and even though this post was aimed at getting a reaction, most of all I want Betfair to listen. It's not too late, there must be a better way.

Thursday, 11 September 2008

The Comparison

Following recent developments, I requested a Premium Charge report from Betfair to show what charges I would have incurred under the new scheme during the the last 60 weeks. Below are the horrific results!
Number of Markets : 438

Over the last 60 weeks I have already paid:

Commission : £1,069.51

Under the new charges I would have paid:

Commission: £636.17
Premium Charge : £2,336.82

Total Charges : £2,972.99

Difference : £1903.48
An unbelievable increase!
Let me make this clear - I'm not a bot user and I don't incur data charges. My only crime is that I'm a winner from backing high and laying low. I'm using the exchange in the way it was designed (to replicate the financial markets) and yet I'm being victimised because I'm successful at it!
No matter what Betfair say - I don't feel welcome.

Monday, 8 September 2008

The Email

I was going to write a post this afternoon saying the usual stuff about having a quiet week etc. but unfortunately my intentions have had to change following receipt of the following email from Betfair:
Dear Mark,
We will shortly be making changes to our terms and conditions. These changes will come into effect on the 22nd of September 2008. From this date we will be introducing a new charging mechanism (Premium Charge) that will affect a small number of our most successful customers.
We are writing to inform you that had the new charge been in place over the last 6 months then you would, at some point, have been required to pay Premium Charges. If your betting in the future continues to be as successful as it has been in the past then you could be required to pay Premium Charges in line with others who, like you, fall into the top 0.5% of our customers.
Please note that whilst the changes to our terms and conditions will come into effect on the 22nd of September 2008, the first charges will not be collected until the following week (week commencing 29th September 2008).
The changes to our terms and conditions and full details of the new charge can be found here.
Any questions that you may have in relation to the new charge should be directed to
The Betfair Management
So what does it all mean? In short, it appears that Betfair are targeting consistent long term winners and are looking to take a larger slice of the cake when it comes to their %. Full details of the new charge can be found on their website but the summary below highlights the key points:
Premium Charge Summary
You will only be considered for the Premium Charge if, over the previous 60 weeks, you satisfy the following criteria:
  • Your account is in profit
  • Your total charges paid 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 previous 60 weeks will be excluded from the calculation; and
  • Each customer will have a 60 week 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:

1) The difference between 20% of the previous week’s gross profits and the total charges paid during the week; and

2) The difference between 20% of the previous 60 weeks’ gross profits and the total charges paid during that period.

As you can imagine my initial reaction has been quite negative, and I've been scratching my head all afternoon thinking where does the ethos of 'winners are welcome at Betfair' fit into all of this?
Will I be affected? Yes - providing I continue to post the type of results I've become used to over the last 12 months etc. I've done some quick calculations and I'm guessing that the amount of charges I pay would double.
e.g. Between 1st January 2007 and 30th June 2008 I made just over 15k Gross profit and paid Betfair £1,110 in Commission to leave me with a net profit of just under 14k. Under their new scheme I would expect to pay over £2000 for the same level of profit over the same period of time.
This is a hefty increase and I just hope Betfair know what they're doing as not many companies would survive if they increased prices so significantly. The markets exist because of the liquidity provided by the bigger players and if there was a viable alternative I'm pretty sure some of them would now be looking to jump ship. But this is where the problem lies as the lack of competition ensures that Betfair are able to do what they like and the rest of us have no option but to follow.
This is a stark reminder that good times don't last forever and if this is the beginning of the end, then one thing I don't want to be doing in 10 years is sitting here kicking myself for missing the boat.
It's time to consider my options and hope that Andrew Black returns from his sabbatical sooner than expected.