Sunday, 11 October 2009

Monopoly


An unofficial spokesperson for Betfair has been active on the Betfair forum, trying to smooth over some discontent regarding the recent changes to the Premium Charge. As I have said before, the changes don't impact me at all, but it does seem that some of the answers from Betfair could be considered a little misleading.

By extending the period of profitability to the lifetime of the account, rather than the past 60 weeks, about 15% of people will fall "out of the PC net and will, overall, result in Betfair making 15% less revenue from the PC than last year.
I have no reason to believe that this isn't true. If someone joined three years ago, and lost money in years one and two, but in the past 60 weeks was in profit (although not by enough to cover their earlier losses) then they will now be spared the charge until such time as their lifetime balance becomes positive.

He did give some numbers which made interesting reading.
The facts remain that from a customer base now exceeding 2.5 million and an actives base of 600k plus on the exchange, the people paying the PC total something around the 2,000 mark - I don't have precise figure but it isn't far off that number.
The part that I do have a problem with is the statement that Betfair is far from a monopoly.
In the end, everyone has the choice to say what they like on here and to decide whether to bet with us or not. Betfair is far from a monopoly, has to exist in a very competitive market place and if we're charging people too much for the service we offer then we will inevitably lose their business. I hope we're not doing that and our customers still recognise that Betfair charges fair and competitive prices for the service it offers.
Another poster replied: "Where else can I trade in running on a sport please, where I can get in and out of the market at any given moment on events such as tennis and snooker. Pray do tell, as I will go there, truly I will. It is clearly a gross misuse of your monopolistic powers. If it isn't then why did you not come up with this idea any sooner, had you not reached market saturation, had you not got a strong enough monopolistic power on the industry at that stage?"

Very true. If you look at Betfair as a bookmaker, then sure, there is a lot of competition, and as I have stated previously, once you are paying the Premium Charge, Betfair ceases to be of any value for an outright punt, but if you look at Betfair as an exchange, and most PC payers do, the truth is that they ARE a de facto monopoly however you twist it. No other exchanges yet have the liquidity or the same number of markets that Betfair has, and to say they do not have a monopoly is disingenuous to say the least.

No word on how many Casino / Arcade players pay the Premium Charge.

6 comments:

Anonymous said...

I remember in the original Q&A about the premium charge Betfair said only around 200 people would be affected. Therefor the admission that there are 2000 people paying PC is very interesting.

Cassini said...

Good point. I think the figure they gave in that initial e-mail was 0.5%, which is 1 in 200, and based on a "customer base" of 2 million at the time would have meant some 10,000 customers would be affected. But they didn't use the phrase "customer base" back then - they said "active customers" and this brought the number affected way down. 2,000 is certainly a lot more than was admitted at the time.

Cran said...

> No word on how many Casino / Arcade players pay the Premium Charge.

lol

John said...

I've seen you mention in several posts that if you are paying the PC it isn't worthwhile to make a straight bet (punt). If you win, then you are taxed on the winnings, but it works in your favor if you lose the bet. The way I'm seeing it is that you are just betting less than the amount you insert. Am I missing something?

I don't think it was a wise business move by Betfair to make changes to the PC. By bringing it up again you are just making people angry all over again.

MATTYBOY said...

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Rick Ford said...

Hi Cassini,

There are easy ways to avoid paying your Premium Charge. I've just posted something on my blog to explain the various methods.

Cheers

Rick
http://sportsbettingforfun.blogspot.com