Inevitably, there was a lot of reaction when Betfair introduced the Expert Fee. But there is also a fair bit of misunderstanding. So, here is clarification on who will and won’t pay anything under the new structure.

Most people taken out of the clutches of Premium Charge

A key element of this change is that the majority of people who pay Premium Charge will no longer do so. Over 50% of people will no longer pay any additional charges other than the standard Betfair commission rate and 80% of those that do pay a charge will be paying less than under the Premium charge.

These are FACTS based upon the data Betfair used just before the Expert Fee was launched. It doesn’t matter what your opinion is on the charge; many will pay fewer fees, and the majority will pay none.

This is really positive news. So why is that the case?

Goodbye Lifetime limits

Premium Charge was based on a lifetime limit of £250,000. Once you crossed that limit, you were permanently paying 40-60% of your earnings per week to Betfair. FOREVER!

The charge came in on the 18th of July, 2011. I was already well over £250,000, so I went on the highest rate possible.

With 11 years behind me, anybody starting at the same time as me would have to earn just over £20k to put them permanently in the highest brackets possible on Betfair. Not too difficult.

The lifetime limit has been replaced with a 52-week rolling period with no lifetime limit. You are measured on how successful you are now, not in the past.

With the 0% rate and rolling calculation, there is plenty of earning potential without being penalised. Better still, if you have earned under this limit for years, you no longer bump into a higher rate.

This has taken a lot of people out of any possible charges.

No lifetime profit? No charges!

One thing that has been missed or not reported correctly is that if you have previously been unable to profit from Betfair, you could still earn good money in those 52 weeks and pay no additional charges.

Why is this?

If you have a lifetime loss on your account, you will not qualify to pay for any charges. Your lifetime loss effectively is a buffer against paying any additional charges now and in the future.

Generated commission, a forgotten aspect

Just because you earn more than £25k in a year doesn’t mean you have to pay any additional charges. This has always been the case with the Premium charge and remains so with the Expert Fee.

It’s a harder concept to explain as most people only ever win, which is a joke of course.

When you bet or trade, you win and lose, and your P&L rises and falls. During this process, you pay a commission on your wins, which soon adds up.

The key here is that the commission generated is offset against any additional charges; therefore, just the commission you pay may ensure you don’t pay any additional charges.

As a, very broad, example. If you bet into 100 markets and won £1000 in 52% of them but lost £1000 in 48% of them. You end up ahead £4000 ahead. But you also will have paid £1040 of commission at 2% on your wins of £52,000.

This means you have already paid 28% commission on your profit, so no additional fees will be paid as you are probably over the threshold already. Of course, this depends on which threshold you are on.

In short, the edge you have will determine how much commission you generate, which, in turn, is offset against charges.

Previous Premium charge payers

If you have previously paid Premium Charge, Betfair will reference the last time that you incurred Premium Charge and use your activity since this point in order to calculate a Buffer at the time that the Expert Fee takes effect on 6th Jan 2025. If you have never incurred the charge, then lifetime data will be used to calculate the Buffer.

So, if you last incurred Premium Charge in 2023, Betfair will calculate your Buffer as:

Gross P&L Since Last Charge = £100,000
Commission Generated Since Last Charge = £60,000
Current Expert Fee Rate = 20%

New Buffer = £60,000 / 0.2 – £100,000 = £200,000

Note for a customer on the 40% rate, their Buffer would be £60,000 / 0.4 – £100,000 = £50,000

Who loses out?

One group of customers that won’t benefit from the changes is those on the 40% rate already. However, even that is a little complicated.

This higher rate only applies to people lucky enough’ to make over £100k a year. They are probably already over the old £250k lifetime premium charge limit.

A change in the implied commission rate means they will pay a little more.

Who are the big winners?

Customers who previously paid premium charges because they crossed the lifetime limit of £250k were paying 40-60% premium charges.

There are many reasons why you could reach £250k in lifetime profits. But if you did it over a long time period, then your annual profits will likely be relatively low.

These customers now drop into the 0-20% bracket.

Some people stopped using Betfair when they fell into that higher bracket. They are now back in the game.

Conclusion

Just because the expert fee exists, it doesn’t mean you will pay it.

If you are not in profit over your lifetime, you will not qualify to pay it. If your generated commission is high, it will offset any charges. You also have a £25k zero rate per 52 active weeks. If you have paid a premium charge previously, you may see that carried forward.

More than half of existing Premium charge payers are removed from additional charges. If you do have to pay a fee 80% will pay lower charges.

There are the key reasons why that is the case.