How to avoid the Betfair premium charge

[xitian]

Really good post, Oscar.

I've had some recent emails about some "pricing trials" to happen over the next 6 months or so, but I'm a bit skeptical that it's going to lead to anything. In reality they need to try the trials on bigger more liquid markets.

The ones they plan to trial are US Open set betting, cricket ODI overs markets, NFL, NBA, rugby league and rugby union, Latin America horse racing.

So first one is:
Set Winner markets US Open

• 29th August to 11th September 2016
  Pre and In-Play bets
  1% Commission
  Tariff will be applied to your specified account for Set Winner markets for US Open only

So it's really to see if turning off the PC on low liq markets will boost them, which I doubt it will because small markets aren't enough to encourage PC payers. Plus you need to manually opt in for it.

[andyfuller]

From memory they did something like this before to try and boost market liquidity. Again that was on more obscure markets so my view of this is less about improving the PC but rather trying to boost quieter (somewhat random) markets.

[steven1976]

I presume anyone with linked accounts can also churn money by matching money across 2 accounts and keep it to a zero p/l and create commissions?

I was at a wedding with one of the guys from Sporting Options earlier this year, who claims to still be a large part of the liquidity and from what i remember (8 pints in), he said he did not pay any commission. I don't know if that is because they are loosing but i didn't get that feeling.

[spreadbetting]

I presume anyone with linked accounts can also churn money by matching money across 2 accounts and keep it to a zero p/l and create commissions?

I was at a wedding with one of the guys from Sporting Options earlier this year, who claims to still be a large part of the liquidity and from what i remember (8 pints in), he said he did not pay any commission. I don't know if that is because they are loosing but i didn't get that feeling.

Churning money between accounts is pointless unless you're trying to lower the higher PC bands. Nothing is acheived by simply matching the same odds between accounts, you may as well wait til wednesday and let Betfair take it in one lump rather than wasting your time doing it for them earlier.

If they're punting/market making etc it's unlikely they'd have anywhere near a big enough edge to get near PC terrority but trading it's pretty much ipossible to avoid paying PC charges.

[xitian]

Actually, if you can get your discount rate to above 40% by generating commission, i.e. you pay less than 3% for a market with base rate of 5%, then you effectively get a small rebate on you Premium Charge. This is because they base your weekly PC on commission GENERATED and not commission PAID. Commission generated uses the fixed rate of 3% to calculate your commission on losing markets. However, you'll have actually paid less than 3% on your winning bet, so your paid commission is less than your generated commission.

It's pretty minor though. At 60% discount rate, you'd get 0.5% "bonus" or "rebate" if I'm correct. So win £100 and lose £100 on different markets and you'll get 50p off your PC charge.

Do let me know if I've made a mistake in my calculations.

[RonObvious]

Do let me know if I've made a mistake in my calculations.

Dont worry somebody will!

[mickey007]

Hi All, annyone know how to increase the generated commision?
I am now at 9.16 % but wanna get it back over 10% but dont know how.
Hope someone can give me a magic tip!

[SeaHorseRacing]

Hi All, annyone know how to increase the generated commision?
I am now at 9.16 % but wanna get it back over 10% but dont know how.
Hope someone can give me a magic tip!

I would suggest arbing between exchanges could help.

[mickey007]

Hi, i only bet with Betfair, there must be a other way then arbing ?

[weemac]

Back every favourite to win the same fixed amount? Or if you can figure out which type of favs have a greater payoff, you might actually make a small profit whilst generating commission.

[mickey007]

sounds so easy, but i still dont understand it....

[ShaunWhite]

sounds so easy, but i still dont understand it....

It's related to market efficiency mickey, back every favourite and over time all you are down is your commission....ish.

[spreadbetting]

Hi All, annyone know how to increase the generated commision?
I am now at 9.16 % but wanna get it back over 10% but dont know how.
Hope someone can give me a magic tip!

Just do cross market arbs against similar football markets ie 0-0 and under 0.5 goals etc you'll find plenty of 1 tick arbs ANC even simply backing and laying at the same odds won't cost you money but pay commission instead of pc

[mickey007]

Still dont get it gents.....
My premium rate is 50%, so even if I win £50 , I will pay a PC. So if I get my generated commision from 9.16% to 10%, I will drop down to 40% pc. But I dont understand how to increase it...

[xitian]

I'm impressed that you've managed to win over £250,000 but still haven't understood how commission and PC works.

As spreadbetting suggested, arbing something like football correct score 0-0 and over/under 0.5 is a good example. They are identical markets, so it's perfect for arbing.

Example:
Back 0-0, at 2.0 for £10
Lay Under 0.5 at 2.0 for £10

Let's assume there's a goal and the game does not finish 0-0 and you pay a base commission rate of 3% (for the sake of simplicity). You lose £10 from your back, you win £10 from your lay. You pay £0.3 commission on your winning bet (and you have generated (0.3 + 0.3)/2 = £0.3 commission). You have generated commission but have a gross profit of 0. £0.3 gets taken from your win immediately, but this will reduce your Premium Charge on Wed, since you only pay PC for any amount less than 50% of your gross profits that week. So if your PC was going to be £100 that week, it'll now only be £99.7 because of that extra bit of commission you generated. But because you've generated commission and your total gross profit has not increased, your overall weekly commission generated % will have gone up as well - eventually you'll hit 10% average if you carry on generating commission at a higher rate than 10% by churning like above. As others have mentioned, maybe you can even win some money along the way. e.g. Win £0.5 gross from the arb, but generate £0.3 commission, and therefore generate 60% commission in that instance.

It's actually pretty simple.