Friday, 28 June 2013

Premature Extrapolation

The big-hitters in the sports investing blogging world have been 'drawn' together this week with their thoughts on this often ignored outcome of a football match, but with Thursday long-awaited for the latest results from Betfair, it was a little surprising to find no mention of their comments regarding commission.

The Financial Times, quite reasonably, don't like the copy and paste, as 'quality journal journalism requires investment', but the link to their report is here.

Basically in an effort to make up for revenue lost from withdrawing from unregulated markets, Betfair have been experimenting with a (higher) commission rate up to 7.5% in four countries. Apparently the results were good enough for Betfair to decide to extend the number of countries to 18.

Sixteen of the countries on the higher rate are know, but either someone can't count (never good when producing a financial report) or two countries remain unknown, at least to me.

While there is mock outrage on the Betfair Forum at the idea of the UK being added at some point, e.g.
Bahaha there is no way I'd be playing at 7.5%.
(yeah right), but implementing this one day is presumably somewhere in Betfair's grand scheme. The official line is:
"We are trying to build this business in a sustainable way . . . The initial experiment went well, but we are very wary of extrapolating too rapidly.”
Perhaps the lack of genuine outrage in the blogging world is because none of this will come as a surprise or that we are all paying at least 20% already and would leap at the opportunity to pay anything close to a single figure percentage.

One line from Betfair's CEO Breon Corcoran was refreshingly honest:
"we have a lot to learn about sports betting"

1 comment:

Zerg Trader said...

i guess they can do whatever they want as long as we have no better choice. thanks for clarifying why i'm paying 6.15 commission lately. i'm not far from 20% but betfair didn't send any notice about this change.