Tuesday, 9 September 2008

Oh Dear, Betfair

A rather disturbing message today awaited me today when I signed on to my Betfair account.

Whilst, in a way, it is nice to know that I am in the top 0.5% of customers, the news that winners like myself will soon have to pay 20% commission is not such good news. Not by a long way.

I understand that other exchanges, notably BETDAQ are aware that a number of bigger bettors may be headed their way, and this is an option I will need to look into. Betfair had a huge advantage as first mover in this area, but once the door opens to another competitor, they could suddenly find themselves left high and dry.

There's not much benefit to getting better prices and then paying a 20% tax on any winnings. A big own goal from Betfair I feel.

The full text of the letter:

Personal Message
Changes to Betfair’s Terms and Conditions Dear customer, We will shortly be making changes to our terms and conditions that will come into effect 22nd 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 charges 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. 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 premiumcharge@betfair.com. Please tick this box to accept the changes to our terms and conditions. The Betfair Management Team.

I hope that Betfair will realise this is not a good move. If an alternative is not here today, then there will be one along tomorrow.

Update: It's worse than I thought. Over the last 60 weeks my profits total a little over £52k, and assuming I have paid commission of £2.6k at 5% , then the new tax will cost me about £7.8k. That is a lot of money by any measure. Come on BETDAQ, get your act together.

6 comments:

Anthony said...

"Get up to 20% better odds", and then give it back again! Thanks BF.

Cassini said...

Crazy move. They have gone from rewarding bigger winners with discounts on commission to now hitting them with a penalty.

Anonymous said...

You are not in the top 0.5% of customers. You are one of the 0.5% of Betfair customers who previously did not pay your fair share, a not so subtle difference.

Cassini said...

If you read the e-mail from Betfair, it does quite clearly state "...like you, fall into the top 0.5% of our customers." I have no idea if this is accurate or not, I am just stating what they wrote. My fair share was always 5% of winnings - that was what I, and many others, signed on to. Whether or not we consider 20% to be fair remains to be seen. It will be interesting to see what happens.

Boris said...

unless you win on every single market (and well done if you do), then your net commission over the course of a year will be far higher than 5%. If you go +50, -50, +50, -50, +50, you have effectively paid commission three times on one profit.
Ask for a report from Betfair over that period and check out the actual figures.

Not defending the charge at all, just offering some balance to the argument.

Cassini said...

I spoke to someone at Betfair and they e-mailed me a report pretty much confirming my rough calculations: I would have paid an extra £7.1k in Premium Charge. I seldom lose because I primarily trade in trending markets, and I am somewhat risk adverse.