Skip to main content

Betfair to screw biggest winners for more cash

Once upon a time, Betfair's best marketing line was 'Winners Are Welcome'. Not any more. In a desperate move to show the shaer market they have more options to increase their revenues, Betfair's biggest winners will be hit with an even higher Premium Charge rate.

For full details, read here - Betfair Premium Charge Hike details

Realistically, how many people will it affect? A very small number. You've got to have done very well to win £250k after commission over the years. But what will it do to liquidity? Well, the people it will hurt are the elite level traders such as Mr Bet Angel. Peter Webb and the best of his genre. Traders lose infrequently, so thus are destined to pay less commission than your average winning punter. The big liquidity providers who market-make across the board will be hit - 40% commission on your gross profits is a stiff ask, you'd need some heavy losses mixed in there to sweeten them up.

This comes on top of their less-publicised efforts to squeeze huge fees out of bookmakers using their commercial API service - over £1m/yr for the bigger firms!

Will 99.95% of us punters ever get near paying that level of Premium Charge? No. But at a time when their PR can't get much worse, is it really a great time to come out with this? Perhaps it is - Wimbledon's almost over, there's no major football tournament for European nations this year, Royal Ascot is done and dusted so maybe it was the best time to sneak it in. They'll be hoping it disappears into the dust by the time their next big football season campaign comes along....

Company figures are published next week I hear - profits are obviously stagnating so they are desperate to show the stock market they have other options to raise revenue.

The stock market liked the announcement today, climbing back towards 800p, or was that just a positive reaction to the news David Yu is finally on the way out?

Comments

  1. Why Betdaq and WBX do not have premium charges and are still alive? Does 20% premium charges have a financial reason or it is just greed of Betfair? To compare with the financial markets where the commission for 1000 pounds is 7 pounds, even 50 pounds (5%) commission Betfair is too high.

    ReplyDelete
  2. Thanks for the comment Neru. It's not quite that simple - nobody is sure Betdaq and WBX have ever turned a profit, and they certainly don't have the customer base to justify such an unpopular move. It's also very hard to believe anyone could sustain themselves purely on either site - there simply isn't the liquidity there.

    Re comparison with financial markets - aren't you ignoring the transaction charges involved with each trade?

    ReplyDelete

Post a Comment

Thanks for your comments, but if you're a spammer, you've just wasted your time - it won't get posted.

Popular posts from this blog

lay the field - my favourite racing strategy

Dabbling with laying the field in-running at various prices today, not just one price, but several in the same race. Got several matched in the previous race at Brighton, then this race came along at Nottingham. Such a long straight at Nottingham makes punters often over-react and think the finish line is closer than it actually is. As you can see by the number of bets matched, there was plenty of volatility in this in-play market. It's rare you'll get a complete wipe-out with one horse getting matched at all levels, but it can happen, so don't give yourself too much risk...

Racing has a Ponzi scheme - and the fallout will be enormous

When the term 'Ponzi scheme' is mentioned these days, the names Bernard Madoff and Allen Stanford instantly spring to mind. The pair of them ran multi-billion dollar frauds (US$60bn and $8bn respectively) that destroyed the lives of thousands of investors who had put their life savings into a 'wonderful' investment strategy. How so many people were sucked into the scheme is baffling to those on the outside. The lifestyle, the sales pitch, the success stories of the early investors - I suppose it all adds up.

So where does this link to racing you ask? A prominent Australian 'racing identity' this week has been reported to have lost access to a bank account with punters' club funds of $194m in it. Firstly - is there a worse term for anyone to be labelled with that 'racing identity'? It ALWAYS ends up meaning shonky crook! Secondly - who the hell has a punters' club with an active bankroll in the tens of millions? It simply can't be done.

The…

damage control when trading goals

When trades go bad, some people will say cut your losses immediately, others will recommend having a bit of patience as events tend to level out (i.e. games with two goals in the first 10 mins never end up with 18 goals in 90 minutes). This is something I like to do on certain matches.

Background:
1. You've backed Under 2.5 goals, trying to nick a few ticks at a time as the clock ticks.
2. You've been caught out by a goal.
3. The market has gone sharply against you.

On this particular match from a couple of weeks ago, there was an early goal (sixth minute) before I got involved. The period immediately after an early goal regularly shows a sharp drop in the Under price, so I was trying to capitalise on that. But Watford then scored again after 14 minutes. The Back price I took (3.95) was now out to 12 - I could close out for a big loss (not my style) or wait and wait for the price to come back to somewhere I could close out for minimal damage. But at 2-0 after 15 minutes, it w…