Betfair Premium Charge

News, chat and debate about the Betfair betting exchange.
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agog
Posts: 55
Joined: Tue Aug 29, 2017 3:55 pm

I have just contacted Betfair with a query about the premium charge. I am not currently subject to it myself but wanted clarification on the following:

Today Man Utd have been confirmed as among the top 4 finishers in the Premier League. Betfair have correspondingly settled them as such This is fair enough, but I am now showing a £265 profit from this for the current week. Under the 20% premium charge rules, I would be charged on this (£53 at 20%). However, when the top 4 market is eventually settled I anticipate to only make about £40 profit, which means a premium charged on Utd being settled early would actually result in a loss.

Surely no charge should be levied until the top 4 market is settled in its entirety and the net profit/loss is clear. The initial response from Betfair is that they think it WOULD be charged this way - which would render trading in such markets futile - potentially turning a profit into a heavy loss. This is clearly wrong and needs to be corrected by Betfair.
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Euler
Posts: 24701
Joined: Wed Nov 10, 2010 1:39 pm
Location: Bet Angel HQ

It's grossly unfair to levy it on a partially settled market.
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Derek27
Posts: 23475
Joined: Wed Aug 30, 2017 11:44 am
Location: UK

I don't trade football so don't understand exactly how partially settled markets work.

If the winning bet on Man U has been settled one week, but losing bet(s) on others get settled the following week, wouldn't that offset the premium charge, when you reach that stage?

As a matter of interest, how do partially settled markets appear on your Betfair P/L page - do they appear at each stage or is there a final settlement?
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ShaunWhite
Posts: 9731
Joined: Sat Sep 03, 2016 3:42 am

They appear as one entry when the first part settles (I think it's dated that way) but it gets added to as other parts settle. Happens in things like the fa cup where they'll pay out on teams you've layed when they get knocked out. I say pay out but it just credits your P&L and the market liability appears to be larger.

Definitely skews things because my fa cup is currently showing as plus 180 on the P&L but I'm minus 200 on each of the remaining teams, after the final it will change to - 20. Surely there's an adjustment to commission and charges?

I've only done a couple like this so I think that's how it works. I suppose it's similar on golf or tennis when players are beaten or miss the cut.
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ShaunWhite
Posts: 9731
Joined: Sat Sep 03, 2016 3:42 am

Derek27 wrote:
Sun Apr 29, 2018 10:45 pm
If the winning bet on Man U has been settled one week, but losing bet(s) on others get settled the following week, wouldn't that offset the premium charge, when you reach that stage?
Or if you had that week off would you get a credit?
(Derek/Peter, I'll explain the concept of 'a week off' later)
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Derek27
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Joined: Wed Aug 30, 2017 11:44 am
Location: UK

Surely when your losing bets get settled that will impact on your P/L and offset any PC that has been charged?
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Naffman
Posts: 5626
Joined: Sun Aug 11, 2013 5:46 am

You don't get PC paid back you just get it offset against future earnings

Suppose they want people to have less money tied up on selections that have already settled and reinvest it somewhere else on the exchange/sportsbook
agog
Posts: 55
Joined: Tue Aug 29, 2017 3:55 pm

This is not peculiar to football markets - it applies to all markets where winning bets can occur before the end of the event (e.g. any knockout tournament).

It will also be happening, therefore on the world snooker. If you had a succesful outright lay bet in the first week, that would have shown as a profit in your betfair P/L for that week. If you were on the PC you would have been charged accordingly on those winnings - even if your current overall position was showing a loss. That's my interpretation - and indeed Betfair's initial response indicated the same.

It's something all traders would need to be aware of as it could result in potential profits on such 'staggered markets' being turned into big losses. If you actually think about it, it renders trading in such markets futile (if you're on the Premium Charge). I hope I'm wrong and it certainly isn't fair but I'm not sure if anything can be done about it if Betfair confirm this is how the PC is applied to such markets.
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Derek27
Posts: 23475
Joined: Wed Aug 30, 2017 11:44 am
Location: UK

I don't think I'd be too concerned about it. If you are regularly paying PC, consistently profit and expect to continue to do so it shouldn't make any difference as you get the money back in reduced PC.

Agree though, they shouldn't settle the markets for the purpose of PC until all bets are settled.
mcfc1981
Posts: 352
Joined: Tue Oct 27, 2009 11:54 pm

Had a loss on Ronnie for the worlds.....this bet shows on the P/L section but doesn't appear to have been included in this weeks premium charge.
Will that loss go on the the premium charge the week the worlds are finished?
agog
Posts: 55
Joined: Tue Aug 29, 2017 3:55 pm

A really helpful guy at Betfair told me today that he'd heard about this before, but when he previously raised it with the PC team he was simply told that's how it is. He's agreed to escalate it again - he saw my point and agreed it wasn't fair.

You don't get these payments back in any way - like I said it can cripple your profits in these markets and potentially turn them into much bigger losses. It seems that it's been seen as too big a problem technically - and they have no desire to change it if it's maximising their profits - but it is grossly unfair and should be addressed. As it stands I won't be able to bet in such markets if/when I hit the PC.
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