Friday 16 May 2014

Mark - My Words

I see that Mark Iverson has become the latest proud member of the Super Premium Charge Payers Club, Back in 2008, when the Original Premium Charge was announced, Mark wrote:

Will I be affected? Yes – providing I continue to post the type of results I’ve become used to over the last 12 months etc. I’ve done some quick calculations and I’m guessing that the amount of charges I pay would double.

e.g. Between 1st January 2007 and 30th June 2008 I made just over 15k Gross profit and paid Betfair £1,110 in Commission to leave me with a net profit of just under 14k. Under their new scheme I would expect to pay over £2000 for the same level of profit over the same period of time.

This is a hefty increase and I just hope Betfair know what they’re doing as not many companies would survive if they increased prices so significantly. The markets exist because of the liquidity provided by the bigger players and if there was a viable alternative I’m pretty sure some of them would now be looking to jump ship. But this is where the problem lies as the lack of competition ensures that Betfair are able to do what they like and the rest of us have no option but to follow.

This is a stark reminder that good times don’t last forever and if this is the beginning of the end, then one thing I don’t want to be doing in 10 years is sitting here kicking myself for missing the boat.

It’s time to consider my options and hope that Andrew Black returns from his sabbatical sooner than expected.
Andrew never did return of course, and Betfair are still going, if not strong. Their reputation is certainly no longer what it was, in large part due to the Premium Charge which appears to have had a detrimental effect on the markets. No one knows how many have jumped ship as Mark puts it. The Premium Charge itself appears to have been introduced, and later modified, to profit from the Flash Boys of Betfair, those groups including former Betfair insiders, who set up with the sole intent of (quite legally and within the rules) getting key information ahead of the majority of traders and consistently winning.

Betfair know these people will happily pay the 50%. There's nowhere else for them to go and ply their 'techniques', but whether Betfair's profits and / or reputation would be better served by stopping this activity, making the markets fair again, and scrapping the PC, only they and their shareholders can decide.

In the meantime, traders such as Mark using the traditional skills of valuation and judgement (as should be the case and was the founding fathers dream) to make their profits continue to lose out to proponents of the rather less cerebral approach of sending agents court-side and betting from (effectively) the future.
All of my knowledge has come from studying the sport which is something I think most punters fail to do.
Congratulations to Mark anyway. For me, the result has been a move away from trading and Betfair. With many in-play markets not available anywhere else, I've been getting more (yes, much needed) beauty sleep, and as a part-timer, it's not really a big deal. I was spending a lot of free-time trading and had done for several years. It was time to slow down anyway. Good luck to Mark opening other doors as the Betfair one closes.  Perhaps Mark can find time to improve the Soccer In Play app?

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