Premium charge changes

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Do you pay the Premium charge

Poll ended at Mon Aug 24, 2009 8:27 pm

Total votes: 72
Bet Angel
Bet Angel
Bet Angel
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Joined: Tue Apr 14, 2009 3:47 pm

Mon Aug 10, 2009 8:26 pm

1.Have you any plans to make changes to the Premium charge?

Yes. It’s been nearly a year since we announced the charge, and we’ve recently completed a review to confirm that the outcomes matched our predictions, and to see if there are changes that we believe would be an improvement. Overall we’re happy with the way the charge has worked. It’s affected slightly fewer customers than we originally projected, considerably fewer than 2,000 of our 650,000 active accounts, but principally it’s affected the customers we expected to incur it.

Based on feedback we are planning to make some changes:

1. The current charge considers only customers who’ve demonstrated consistent profitability over the long-term, currently defined as 60 weeks. In conversations our customers have told us that they’re concerned this isn’t long enough, and that they’re worried about the possibility of incurring the charge during an extended successful streak. We’ve therefore decided to reduce the number of customers affected by the charge, and the amount we collect, by increasing the time period over which a customer would have to exhibit highly consistent profitability from the current 60 weeks to the entire lifetime of each customer’s account.
2. We chose to assign the commission we collect at the settlement of each market equally between those who win and those who lose, to focus the charge more on those who are incredibly consistent winners and to reduce the charge for big risk-taking winners. We chose to use the actual rate that we collect commission at the settlement of each market, rather than a fixed approximation, because we concluded it would be preferable to be accurate. Feedback from customers has been consistent that they consider transparency and certainty to be more important, so we’ll therefore simplify the charge by valuing the contribution of all markets in which customers lose at 3%, regardless of the actual average commission rate.
3. We included transaction and data request charges in the calculation of what customers have paid, reducing the charge collected. Customers have told us that they believe this is incorrect, that those charges exist to discourage excessive use of the site, and that there is the perception that those customers who run robotic strategies that use our facilities intensively are being treated unreasonably favourably. We’ve agreed and we’ll be removing transaction and data request charges from the calculation. The number of customers affected by this is negligible.

We expect those changes to be implemented in October this year, and we’ll communicate the precise details to affected customers nearer the time.

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Tue Aug 11, 2009 8:57 am

Is it purely based on consistent profits over the past 60 weeks? Surely somebody earning consistent profits, but for relatively small stakes wouldn't get charged?

Posts: 1759
Joined: Thu Apr 16, 2009 2:13 pm

Tue Aug 11, 2009 12:35 pm

Number three means no more getting away with hammering the site now. IMO that actually would be fair, but I know a few non PC payers who have been warned by betfair that they are close to incurring data charges, even though all they are doing is using BetAngel with a 200ms refresh rate. This may affect quite a few users

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Joined: Sun May 17, 2009 5:49 pm
Location: Cambridge

Tue Aug 11, 2009 12:47 pm

The premium charge rules are about as clear as mud...

Does any one know roughly how much you would have to pay pay total (premium charge and commission) if you made (a) £12k (b)£24k (c) £36 (d) £48k per year?

Posts: 97
Joined: Fri Apr 17, 2009 3:56 pm

Tue Aug 11, 2009 3:59 pm

Not sure I really get point two... but then I don't really understand the ins and outs of the current charge so there we go. Can't really comment as I don't fully understand the new proposals but from what Peter's said on his blog it seems its worse than the current charge for trader's... (no surprises there), but I was surprised that only 2000 people are paying the PC. This seems to imply only around that number of people are trading succesfully, (although obviously far more people are trading and making a smaller profit). I don't know why but I always assumed the number of professional trader's out there was a much larger figure... Just an observation.

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Posts: 108
Joined: Fri Apr 17, 2009 10:03 am

Tue Aug 11, 2009 4:21 pm

I agree - point 1 and 3 are pretty straightforward but full marks if you get number 2.

Why do I get the feeling that Betfair are hiding the truth as to why these changes are necessary?

Posts: 81
Joined: Fri Apr 24, 2009 6:59 am

Wed Aug 12, 2009 6:40 pm

The changes are obviously very bad news for any trader. Basically Betfair, even before the 60 week allowance is up, are scrapping it.

Originally you had 60 weeks to fall into the 'top 5%' of customers or 2000 whichever bullshit you believe. But now with the 60 weeks gone you will be due the charge immediately you are profitable to their PC definition.

With a £1k allowance you can earn £5k before you are due the charge. There must be nearly on 10,000 races a year so that's 50p a race on average.

I think this is a clear indication that Betfair intend to increase charges again in the future. They will keep doing it until people leave and the effect becomes negative. At the moment they are charging more and getting away with it. Expect more of the same.

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Joined: Thu Mar 26, 2009 8:54 pm

Wed Aug 12, 2009 6:45 pm

The volume on Betdaq isn't terrible it does seem to be gaining momentum, albeit slowly.

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Joined: Wed Mar 25, 2009 12:23 pm

Wed Aug 12, 2009 7:38 pm

Something I don't get is why new traders don't try Betdaq more. The main reason given for people not moving over is the lack of liquidity which I can understand for bigger traders but it is very clear that are a lot of small traders out there who trade for fun or part time or with a view to going FT in the future. So why don't these people trade on Betdaq, there is more than enough money over there for them to be matched.

I guess the main reason is that anyone new to the game only ever hears about Betfair and not Betdaq. Perhaps these smaller traders may find it easier than trying to trade on Betfair as the bigger traders dont frequent Betdaq.

Bet Angel provide free software for Betdaq with almost all the same features as the Betfair version, you can get a better commision deal over at Betdaq if you ask.

The newer and smaller traders are likely to be less affected by the PC and therefore I guess could think why bother making the effort to use Betdaq as ultimately you are hopefully only going to help the bigger traders by facilitating their move over, however, if smaller traders made the move it would lead to more and more moving over there and perhaps one day we might reach the critical tipping point and the full move might be on and Betdaq becomes a viable alternative.

So if more was done by blogs and people to get new people to use Betdaq perhaps it would be of benifit to us all - and once the 'sharks' move to Betdaq in some distant dream, the smaller traders could make the move to Betfair to avoid them :)

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Joined: Thu Aug 13, 2009 10:26 am

Thu Aug 13, 2009 10:32 am

Regarding the charges for useage, I got an email just the other day to let me know I should be paying a charge of £13.30, I only use Bet Angel with an auto refresh of 250 milliseconds, so not sure why I have used up extra. Anyways they said I have not to pay it, but its a reminder so I avoid future charges.

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