Wednesday, 29 June 2011

Bet Unfair

.
So, Betfair have decided to tinker with their Premium Charges yet again, except this time they've really gone for the jugular.  Instead of 20%, they now want 40-60% of your winnings depending on how much commission you generate for them.  The good news? There isn't any.  Your account will need to have a lifetime net profit of £250k (although it's likely this condition will get ditched in the near future) but Betfair are basically saying that if you keep winning you'll pay eventually.
.
For those who believe the spin that this only effects 0.1% of Betfair users, you are mistaken.  It effects everyone.  This is the issue.  Betfair have only looked at what it will cost them in losing these 500 or so accounts.  They've not taken the time to fully understand the impact these charges have on those below the 250k 'magic' number.  People aspiring to this level plan their lives around Betfair's charges and as in any line of business will do what they can to minimise the impact.
.
The result?  Everyone who's read about these new charges is either contemplating life without Betfair or thinking of a way not to pay.  Eitherway, it's a lose-lose situation for for a company who had huge customer loyalty and market awareness only a few years ago.

.
Surely it's time people started walking to Betdaq?  Full details of the new charges can be found here.


12 comments:

Anonymous said...

The Betfair charge is completely avoidable if you know what you are doing. It is nothing to do with multiple accounts or dodgy names or family members.

It is a simple case of juggling your investments with other services like bookmakers and Betdaq. You will only pay it if you are really good and ONLY use Betfair, apart from that, with a half a brain you can completely avoid it.

Mark Iverson said...

If only it were that simple.

Transferring your 'green' to other bookmakers/exchanges is not easy when trading a fast paced event in-play.

Let's take an example:

I'm £500 all green and want to transfer my 'winnings' across to Betdaq to ensure I lose on Betfair.

The favourite is trading at 1.50 so I lay £2000 to make my book minus £500 on the fav and plus £2500 the outsider.

I do the opposite on Betdaq to even my overall book but what happens if the outsider goes on to win? Yep, I win £2500 on Betfair and get hit with an additional £500 Premium Charge the following Wednesday.

Add to this the risk of not getting matched and constantly having to transfer funds between accounts and it becomes impractical very quickly.

Am I missing something?

FlySky said...

It is terrible what they are doing last time.

Another thing, they cancel my bets that was counter bets,and i got loss -129,48

please check video that i made

http://www.youtube.com/watch?v=iAXrlHOg6F0

Anonymous said...

Hey Mark, no you are not missing anything. But this has nothing to do with fast paced trading. Say you start trading tomorrow. You make £10,000 in the first month. Great. Now you go and find a short priced favourite that you are fairly certain will win. Lay it for £5000 on Betfair and back it for £5000 on Daq (you are up £10k so you can do this). If it loses, you are up £15k on Betfair sure but if it wins as expected, you are now still £10,000 up but only £5000 up on Betfair. I have been doing this ever since the Premium Charge came in and have never paid it. By arbing with bookies and the Daq my Betfair P&L is fairly close to zero, they think I don't make any money. Combined with having two accounts, in different names, one at work and one at home so the IP's never get linked, I am assured of never having to pay a charge unless all of the bookies ban me or Betdaq and WBX cease to exist.

So whilst you are not missing anything, you see that this has nothing to do with juggling a winning trade while it is in play, there is no rush to offset.

But don't wait until you are £230k in front before you start reducing your "apparent" Betfair winnings.

Mark Iverson said...
This comment has been removed by the author.
Mark Iverson said...

Hi Anonymous,

That could well be the most helpful comment I've ever received.

I need to do some calculations but I have a good feeling about what you're saying :-)

If you ever feel the need to email me then please do so at mark@markiverson.com

Many thanks!

Mark

Curly said...

Hi Mark,

Just a quick word of caution about trading across platforms.

A quick Google search of your blog doesn't bring up a mention of your commission level so I'll (randomly) assume you're paying 3.8% at both sites. In order to have a cost neutral trade you'll need equivalent prices of 2.04/1.96 otherwise the method is costing you money in the first place. So you don't want to be pumping this through too many times. However the drawback is you won't want to be pushing through stakes that are too large because if you've ever flipped a coin or played roulette you'll realise the chances of a long winning streak on Betfair would have to be considered. Obviously you could keep withdrawing from Betfair depositing it into Betdaq trying again and again - but the longer the winning streak on Betfair it will get exponentially harder and all you'll have done is put yourself in a worse position and paid for the opportunity to do so.

That's not to say churning through Betfair doesn't have its disadvantages - you still have to pay commission on two markets and your total profit won't change too much - you're simply increasing your % commission paid. The more lifetime profit you have the harder you have to work to do this.

A rock and a hard place as they say. Best of luck in whatever you deicde. I've added a link to your blog on mine. Like many of the blogs out there I followed this one for quite a while and then stopped for about 10 months. It's a shame your live blogging never worked out, it was a nice idea, but I can appreciate that blogging about gambling has to come second to the actuall gambling :)

Curly

Curly said...

Sorry, confused myself there! I managed to somehow combine 3 things into 2. For clarification - you can trade two linked markets within Betfair and pay commission on two markets (in much the same way as cross platform trading) and only really increase your percentage paid. The benefit being you could utilise your entire bank at once each time.

Or you can implement high volume, low return 'churning' where the overall aim is again to increase your percentage paid.

None of the options are easy per se so as I said, best of luck.

Mark Iverson said...

Hi Curly,

many thanks for your detailed and helpful comments.

I have gone through both the remedies you have suggested in detail and I don't really think they are feasible in my circumstances as I would need to deal in huge sums for me to generate enough commission for Betfair.

In all honesty, I will probably just trade on betdaq as much as possible (e.g. match odds markets) and only play certain sports (e.g. Darts etc.) until I hit the 250k marker.

Many thanks for your help.

Mark

Mark Iverson said...

Curly - I've also added a link tour blog :-)

Anonymous said...

Betfair's PC2 is really a big PITA. But who knows, one day the purple may grow up and take the same way. From a user's perspective the ideal solution would be some sort of decentral (=free) peer-to-peer betting exchange. A (hard?) problem to be solved: p2p money management! Advantages: decentral, no commission, no pc, users could create own markets or participate in existing markets, open API (Gnutella-like), etc.

Waht do you think?

Mark Iverson said...

Love it anonymous....just can't see it happening ;-(

Mark