I was browsing another software provider's forum the other day, and came across some interesting comments by someone. I don't think I'm allowed to include a link here, but here's a few extracts.
I had to pay premium charge from when it was introduced until last month.
Since then I don't pay it anymore with the help of a company.
It's a company that has received privileges regarding premium charge and commission from Betfair. Just become a customer of them and you will have those privileges too.
I still don't pay premium charge and a lower commission than ever. Those of this forum who tried it aren't complaining either.
The poster goes on to ask for some sort of remuneration for divulging any further information.
I'm obviously not going to be entertaining this person's "offer", but I'm just curious to know if anybody else has come across such a thing.
I suspect you have to join a betting syndicate (the company) and have your account merged with them for PC calculation purposes. I presume the syndicate already generates such a high amount of commission that tagging along means your own PC is reduced.
The question is whether this is "legal" in the eyes of Betfair or not. I know of people forming Betfair syndicates in the past, so I suppose it must be allowed?
why would somebody take care of your financial situation.
I think to become a member of that company or club whatever it is you will be asked to invest some money somewhere on some terms.
Pretty much every syndicate or collective on Betfair has turned out to be either a fraud or disaster in the past. So I'd be extremely cautious before getting involved in something like this. Sort of begs the question why they wouldn't knock on the door or well known PC payers to get them involved.
I know of one legit syndicate that formed to avoid PC, but Betfair suspended their accounts and charged them with PC avoidance.
I found new interesting possibility how to avoid/reduce premium charge - the idea behind this is - you can have automated betting on tips provided by tipsters, so you will act as a punter and thus you will generate significant commission with negligible effort. As a little plus - if you are lucky you can even make some additional money, some of tipsters there look really promising...
If interested PM me for details
LeTiss 4pm wrote:For anybody that has never paid PC, but they are approaching that dreaded day, it's possible to remain under the radar with some tactical bets
For anybody that has made consistent profits and been paying PC for a while, it's almost impossible to hoodwink BF. They will notice a rapid change in your trading style and just flag your account for PC avoidance.
Can someone elaborate please, on the ways to prevent a premium charge if you're approaching it? Is it all about maintaining a high commission %?
I think its all about generating commission. I dont think there is any way of avoiding it completely, though you can generate enough commission to keep you out of the highest rate bands.
Some people do it by playing on different markets of the same event. ie backing a team to win in the match odds markets, then backing the other team to win by combining a load of correct scores. It may give you a net loss overall, though can create enough commission to keep you out of the higher rate bracket.
I think the ideal way is to churn. By that I mean to run almost break even strategies purely to create commission. I think it works out better if you can do this at higher odds rather than low. ie if you can break even after 100 bets, it would be far better for your commission if you do that by having 10 winning bets at odds of 10 and 90 losers, than it would by having 50 winners at evens and 50 losers.
The problem with the above method is that whilst it looks simple on paper, in reality there will be a lot of variance. This is all very well if you have a big bank and can stand the variance, though if you are only operating with a small bank you can risk going broke in a few weeks with a bad run of results.
Another method to help slow down the procedure would be to spread your action across other exchanges and bookmakers. Arbing is an obvious way of doing this, though acccounts get closed quickly and it is a lot of effort to be constantly opening new accounts, and even getting on all the bets takes up a lot more time than you would imagine.
If you specialise in something like back to lay. There is nothing to stop you placing your opening bet on Betdaq, then leave your closing lay up on Betfair. You may lose a few quid in commission by doing this, though in the long run it could help keep you away from crossing over the 250k marker and create more commission for when you do.
All said though i dont think there are any concrete ways to avoid paying the charge. A lot of the methods, even all those suggested above can end up costing you money anyway, and in some cases it may just be better to just pay the charges and concentrate your efforts on making more money trading.
I dont really have a problem with the premium charge, as it is fairly obvious from experience that the commission structure favours the trader over the punter. 20% seems fair to me,as at that rate they are saying either create some more commission by providing more liquidity to the exchange or make up the difference in charges.
Its the £250k rule which i dont agree with. Its all very well if you made £250k in the last calendar year, you can afford to pay it and to run churning strategies then. Though if you arrive at that amount after 5-10 years trading its unlikely you will have much of a bank saved to do so.
It punishes the smaller player, many of whom would have been loyal to betfair for many years.Maybe that was their intention, maybe they dont want hundreds of smaller traders on the exchange, maybe it suits them better to just have a few big players to deal with.
Though it seems to me that once you go over the £250k mark they are saying either become a bigger player, or fuck off. 20% seems fair enough, though 40% just makes it not worth the while of most smaller traders.
As more and more people reach that level the markets start to die. Im sure a few people have gone broke trying to become bigger players, and plenty of others have just walked away to do something else.
The main problem with this is that it just puts any new traders off starting out all together and the exchange just seems to be slowly dying because of it. Once you kill the dream, nobody is interested.
You only have to look at the difference in the kind of responses people get when asking about becoming a trader on forums. Years ago everybody was saying betfair was the best thing ever and word of mouth spread and everybody wanted to be on the exchanges.
These days when somebody asks about the possibilities of trading for a living they get the same sort of replies that you would get if inquiring about becoming a courier driver for hermes. Lots of hours, low pay, and no future prospects, most people are advised not to bother, which is a shame, as the exchanges are the greatest invention ever!
I think Betfair have become hooked on PC like a drug users and his favourite hit. I honestly don't think they realise just how damaging it is without attempting to modify it. Not with the next interim results to hit they daren't mod it for fear of missing guidance. It's amazing how many listed companies fall into this trap.
If you are creative you can minimise it's impact, but why the hell should people have to go through that faff? Illogical.
How long has it been now since Betfair started? That £250,000 isn't worth much per year now. There must be more and more people falling into the band you would think.
I still think they should have somehow done it along the lines of normal taxation, where you have a yearly personal allowance on which no PC is paid - this would cover all most all users.
Then have a banded system with perhaps two bands, for example one at 20% say for profits between £20,000 and £100,000 and one at 80% for profits over £100,000.
That would have kept the dream alive, £80,000 a year would be a great target for most and then the ones really taking money out of the exchange each year would be deterred.
Instead what they achieved was the opposite, they deterred the people who take relatively modest amount out each year whilst encouraging and facilitating the really big hitters to get even bigger.
They could achieve these charges quite easily by way of a yearly rebate system/charge applied once or twice in the following year.
I did discuss this idea once with a Betfair executive who seemed quite interested in it but nothing ever came of it. He was quite open about the damage the PC caused and how the current system really wasn't doing what it was supposed to do. He told me virtually no one pays 60% and if I didn't want to I should churn on my account - basically saying that the 60% band was pointless as no one pays it.
A crazy situation that shows no signs of changing.
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.
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.
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.
steven1976 wrote: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.
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.
