New Premium Charge on the way

News, chat and debate about the Betfair betting exchange.
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Euler
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dt888 wrote:Peter have you actually heard anything yourself then about possible changes next year or is this news to you?
Nothing
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SeaHorseRacing
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LeTiss 4pm wrote:
SeaHorseRacing wrote: Personally I have no problem with a premium charge at all
Easy to say when you don't pay it ;)
Very good point, Let me re phrase that. I would have no problem in paying a reasonable amount in premium charge.

Betfair are very concerned about potential law suits as I what I gather certain customers especially market makers have been getting special PC rates.
I can see Betfair as a kind of PPI scenario in a few years time if it gets worse.
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aperson
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Slightly worried by this. I used to pay PC but haven't done for a few years now although through a recent change in strategy I probably will be in another couple of years again, but it sounds like that may happen sooner than I planned!

I certainly fall into the category of making most my profits in a small number of markets, (mostly football correct scores and over/under) but these markets have suffered terribly liquidity wise in recent years so I don't see how increasing PC on me would help. Maybe they would only increasing it in more liquid markets.
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SeaHorseRacing
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I have been thinking about this for a while and my ownly logical reasoning for them to do this is betfair are interacting strongly in their own markets.

I have no facts but that day at Kempton a month or so when it went crazy I think was betfair playing there own markets and I think there trying to push out traders to take control of their own markets.
spreadbetting
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LeTiss 4pm wrote:
SeaHorseRacing wrote: Personally I have no problem with a premium charge at all
Easy to say when you don't pay it ;)
Too true, let's hope they drop the £250K band to put everyone on an equal footing, then people may start to see why some others complain.
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Naffman
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SeaHorseRacing wrote: Betfair are very concerned about potential law suits as I what I gather certain customers especially market makers have been getting special PC rates.
I can see Betfair as a kind of PPI scenario in a few years time if it gets worse.
Interested to hear everyone else's opinion about this! Sounds like we're being shafted while the big boys get what they want :lol:

Would be hilarious if it happened but won't be holding my breath
LinusP
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Joined: Mon Jul 02, 2012 10:45 pm

If it results in people like me moving into other markets and providing liquidity then good. I can then focus on other markets rather than churning to get my commission up.

The '8.5%' reduced PC charge that has been doing the rounds on twitter is stupid, it's either photoshopped or just a high market base rate due to the country/market.
xitian
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I heard about "alternatives" to PC years ago (back in 2013 I think). I was told that there were people already trialling these alternatives. Obviously one option would be not to be charged weekly PC, but pay a higher market base commission rate, like 8.5%. Apparently it wasn't necessarily intended to change the amount they collected, but the way they collected it (for example some people were saying they'd prefer to pay a daily charge instead of getting a weekly bill). Now all I told them back then is that they have to be /veeery/ careful if they are to change the way things work because of how the ecosystem has grown around it.

Now specifically around this 8.5% base commission alternative, that would basically highly favour anyone who is consistent. If you're 100% consistent (i.e. have a net profit on every event you bet/trade on) then obviously the total commission you'll ever pay is 8.5%, much better than 40% PC. On the flip side, anyone who specialises in arbitrage is completely screwed - arbs that were once 1% positive EV, suddenly become -7.5% (or similar) because you're paying so much more commission on the winning leg.

I'd be kind of surprised if Betfair would intentionally want to change the rules so significantly. From what I learnt recently, one of the biggest players in the market relies on arbs. Why would they want to knock them out? At the moment, you're specifically being penalised for being too consistent (60% instead of 40%), so why would they all of a sudden flip that?

So either this is a crazy move from Betfair, or this is just old news surfacing from years ago, and some people are indeed on slightly different deals (and have been for years), but it's not necessarily rolling out to everyone. It could be that PC continues as normal for most markets, but some select markets (e.g. low liquidity ones) become exempt from PC, but move to a higher base rate (which doesn't make much sense to me either actually).
xitian
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Actually, just following on from that, I just read some of the tweets linked from one of the earlier posts...

One guy suggests that Betfair would "customise" your market base rate so that you end up paying the same as before. This is exactly what I heard about this trial I mentioned from years ago as well. So for example if you were 100% consistent, then they'd just set your base rate for every market to 40% (or I guess 60%). If you're generating a lot of commission anyway, then you'd have a lower base rate. So in theory, the only thing it changes is that you pay this "premium charge" on every market, rather than a weekly bill.

For me, it sounds a bit messy and complicated on how they'd calculate your base rate. And would probably open up methods of abuse (for example artificially wrangle a low PC rate, then switch back to being consistent).

Anyway, only time will tell.
LinusP
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I stand corrected, thanks for sharing.
spreadbetting
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I know someone who had their base rate raised so they could get out of the 50% band. Their PC was calculated as usual every week and they've now gone back to their 3% and churning to maintain it.

I'd guess the 8.5% screenshot is just someone from another country playing an AUS market as I'm sure some of them start at around that level.

They've done reduced charges on markets in the past to try to generate liquidity and no reason they won't exempt some from PC as certain markets can't compete with bookies prices.
dannycutts
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Location: West Sussex

I think it should be binned :D

if it does go up or it has a negative impact on more traders then Betdaq will do better out of it...
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Euler
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I think that what is happening is the base rate is set to a higher level which more or less covers the original charge, but it's no longer called premium charge. I think that's what's happening here. I spoke to another person who was offered it today.
steven1976
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Joined: Tue Jan 19, 2010 6:28 am

SeaHorseRacing wrote:
LeTiss 4pm wrote:
SeaHorseRacing wrote: Personally I have no problem with a premium charge at all
Easy to say when you don't pay it ;)
Very good point, Let me re phrase that. I would have no problem in paying a reasonable amount in premium charge.

Betfair are very concerned about potential law suits as I what I gather certain customers especially market makers have been getting special PC rates.
I can see Betfair as a kind of PPI scenario in a few years time if it gets worse.
Special rates. Try zero charges! I was at a wedding with one of them earlier this year who claimed to pay zero. They were from a well known company that lost a lot of money in the past though, so maybe still just loosing cash!
Emmson
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SeaHorseRacing wrote:
Sun Dec 18, 2016 12:25 pm


I have no idea about the ins and outs all I know is they have discussed this and it is something there working on. What I do know 100% is there will be a change come next year.
My source is a solictor so I do believe them but what exactly I dont know and wether they are in the process of changing it as we speak I have no idea but they are making changes and its on its way.
Did anything change or did nothing change?
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