Thursday 7 July 2011

New World Order

My Golf Schocker post has, in record time, become the fourth most read GAO post of all-time, in just a few days. It was linked to from a number of places, the Betfair Forum, Bet Angel’s forum, Facebook and several blogs, so thanks to anyone who drew attention to it. Sadly, after recently passing the 250,000 hits mark, Stat Counter now only counts a hit as 0.4 of a hit, so my numbers are no longer an accurate reflection of the blog’s popularity (enormous).

It’s been a week now since the latest move of the goal-posts by Betfair, with implementation just a few days away, and from what I read, rather than from first-hand experience, (this is a quiet time of year for me), liquidity on BETDAQ appears to be improving. Mark Iverson and Peter Webb have made the point that there is money there, and even if the markets may not be quite as liquid as Betfair’s, it is worth making the effort to work with what is available.

There seems to be some confusion over how exactly the charges are to be applied. The wording from Betfair suggests that once the barrier is crossed, the rate is applied ‘thereafter’ while forum posters are reporting that they are being told the rate being charged can change. It’s hard to imagine that Betfair would let you cross the line at 40%, and then fail to hit you for 50% or 60% should your account profile change. It’s not hard to imagine that if you cross the line at 50% or 60%, you will never pay less than that amount. 

The ‘finishing line’ of £250,000 may sound like a lot of money, but as Mr. Mark Iverson discusses in this post, when you think of it as total income generated over a number of years, it certainly isn’t.

The latest figures available show that the median gross income for men in the UK is £538.20 a week (£28,000 a year rounded). Regional differences mean that the top median is in London at £36,000 while the lowest is in Northern Ireland at £24,000.

After deductions, this works out at £21,402, and to reach £250k would take 11.68 years. Betfair was launched a little over 11 years ago – in early June 2000. Coincidence? Well, yes, probably, but the point is that a Betfair customer making an average income on Betfair would be hitting the £250k mark in the next few months.

As a part-timer, the changes are annoying, but given that anything I make is a bonus, it’s not life changing. I am unlikely to match my current averages, but life is about adjusting to changes, and in the whole scheme of things, it doesn't, or shouldn't, rate too highly on ones list of priorities.

It’s the full-timers on median income or thereabouts who will feel the most pain. After netting 95% of gross winnings before the Premium Charge, and 80% of gross winnings since, some now face the prospect of netting just 40% very soon. Assuming that full-timers are pretty much already maxing out their potential, to face a halving of income may well be the death knell for some.

For anyone who hasn’t yet reached £250k, and doesn’t need to generate income for a few months, there may be some wiggle room to adjust what band you are in when you cross the line. The ideal is to win on BETDAQ and lose on Betfair, but as others have pointed out, if we knew how to do this, we wouldn’t need the lay on Betfair!

Treading water for a while, and churning some commission, may well pay dividends in the long-term, but this is by no means guaranteed. It will be no surprise if Betfair move that amount down to £100k in the not too distant future, and even the 40%, 50% and 60% band rates could be raised.

As any successful punter knows, start winning with a bookmaker and your account soon gets shut down or severely restricted. As an exchange, Betfair should be matching individuals and care not who wins or loses, but they are not an exchange – just a highly efficient bookmaker. Betfair no longer welcome winners. They may not be closing accounts (yet) but the severe restrictions are here. If the trickle to BETDAQ becomes a flood, this might just prove to be a Ratner moment for them. The genie is out of the bottle so far as exchange betting is concerned, and if Betfair won’t provide a fair exchange for all, someone else will.