How would you change the premium charge?

[Michael5482]

In relation to rejuvenation I'd like to see Betfair promote trading more and establish a full trading course package both manual and an automated one to sit alongside the developer programme then market it along with monthly content etc etc Maybe even a mentor programme.

You provide excellent trading content Peter but Betfair should be providing this to promote the exchange to get people betting/trading on there IMO

More a longer term opinion but the number of PC payers needs to increase that way the % paid can come down as PC payers increase. You achieve this by assisting people becoming successful, not stifling them and forcing them away with 40% PC charges.

Elephant in the room for me is the sportsbook. For example on a Saturday how can you promote a price boost on Man U to 2.0 on a sportsbook with a big fat juicy over round but then in the same breath promote them at 2.18 on the exchange that beats the sportsbook price hands down.

[Driftspite]

If the revenue generated in the PC goes to either lower the commission generally (BASIC rewards) and (less likely) improve infrastructure then:
It is a good thing as we need money in the system and lowering commission to attract new money is a good thing. Better infra is also good but empirical evidence does not suggest PC goes towards this.

Else if PC is just going to Flutter's bottom line then that is less good. What I would really love to see if PC going towards advertising the Exchange more.

In terms of the mechanic of the PC levy I do think some time based metric should be a factor, and also 60% is too high. Someone suggested base commission of 5%, this would hit me harder than PC as I have a 'gambling style' of betting. I also do not like the way it is taken weekly, I use a relatively small bank and PC can be 30% of that bank in any given week which makes Wednesdays depressing.

I think they should remove the lower PC charge completely (I pay higher) or raise the threshold as it captures too many new people and puts them off. I would also like to see data purchases offset against PC in some way - this could encourage profitable players moving into new markets.

TBH - there is not an easy fix that would work for all (including Betfair)

[BFDon]

I don't think the PC was a bad idea from BFs pov but imo it was/is too complicated, it should have been capped at 40% and everyone given a yearly allowance once they hit 250k. I wouldn't be surprised if many within BF past and present would agree with that. Trouble is, it's far harder to roll back on anything now, any move would result in an immediate hit to revenue. They've run a number trials over the years with PC exempt markets but it has never lead to anything, so I presume the increase in liquidity from it wasn't sufficient to justify a change. Would really need to see a big uptick

[Naffman]

I don't think the PC was a bad idea from BFs pov but imo it was/is too complicated, it should have been capped at 40% and everyone given a yearly allowance once they hit 250k. I wouldn't be surprised if many within BF past and present would agree with that. Trouble is, it's far harder to roll back on anything now, any move would result in an immediate hit to revenue. They've run a number trials over the years with PC exempt markets but it has never lead to anything, so I presume the increase in liquidity from it wasn't sufficient to justify a change. Would really need to see a big uptick

Thinking on it I agree, Betfair have damaged the brand with PC that badly that I'm not sure people will come flocking back in such big numbers

[JohnT]

I think you can make a good case for a small annual allowance to cover expenses.
10K for those on 40%.

[WisdomOfCrowds]

Without having access to Betfair's internal numbers, it's very hard to say what would be best. I presume they know what levels of Premium Charges drive people away, so try to avoid that but the best prize for everyone - Betfair included - is to bring more money into the Exchange.

Considering the traditional bookmakers' high over-rounds, selling the Exchange to bettors shouldn't be difficult although I'm making the assumption the average bettor is able to differentiate between good and bad value, or even cares about value. If a punter prefers a 120% book with a few freebies thrown in here and there, then what can be done?

So, to improve the situation for us and for Betfair, I believe Betfair must find ways to convince more people they should be using the Exchange. Increased liquidity is good for everyone.

It's be nice to think Betfair want to play fair with Premium Charges but the more their bottom line gets squeezed, the more they might try to put the squeeze on us.

[BFDon]

I don't think the PC was a bad idea from BFs pov but imo it was/is too complicated, it should have been capped at 40% and everyone given a yearly allowance once they hit 250k. I wouldn't be surprised if many within BF past and present would agree with that. Trouble is, it's far harder to roll back on anything now, any move would result in an immediate hit to revenue. They've run a number trials over the years with PC exempt markets but it has never lead to anything, so I presume the increase in liquidity from it wasn't sufficient to justify a change. Would really need to see a big uptick

Thinking on it I agree, Betfair have damaged the brand with PC that badly that I'm not sure people will come flocking back in such big numbers

I'm not sure how much it damaged it in reality or affected the development of the exchange since. 250k is a very healthy allowance so no one would be deterred from starting out on BF. The disgruntled ones seemed to be the historic winners who had already used it up but how many of these actually reduced their liquidity as a result? Conversely a number will have increased their liquidity in response given the incentive to do so. Would guess that the sportsbook had a far bigger impact than PC

[ly18]

The BF issues (not in any priority order) :

1. PC
2. Liquidity
3. Number of Bettors / Traders
4. Outages, sub-optimal Platform performance
5. Other

What really needs to change ? Is the Platform, it's too functional for Casual Bettors.

[weemac]

Exchanges can't and won't grow as long as the TV racing channels, the sports press, ESPN, Fox, CBS, football clubs, snooker, the racing industry etc. are substantially sponsored, advertised with, and/or funded by bookmakers.

It just can't happen.

[jamesedwards]

I'm not sure how much it damaged it in reality or affected the development of the exchange since. 250k is a very healthy allowance so no one would be deterred from starting out on BF. The disgruntled ones seemed to be the historic winners who had already used it up but how many of these actually reduced their liquidity as a result? Conversely a number will have increased their liquidity in response given the incentive to do so. Would guess that the sportsbook had a far bigger impact than PC

Imagine you're earning c.£50k per year Betfair trading fulltime at 70+ hours per week. Suddenly you hit PC2 and this drops to £25k per year for the same amount of workload, investment and risk. At only £7.50 per hour you can earn much more elsewhere, so you decide it's no longer worth your while and exit.

These people will be big players who churn through multiple millions across hundreds of thousands of markets each year, and overnight this liquidity vanishes completely. If there was an annual allowance then at least it would encourage them to remain part of the ecosystem, even if only in a smaller way.

[Naffman]

I'm not sure how much it damaged it in reality or affected the development of the exchange since. 250k is a very healthy allowance so no one would be deterred from starting out on BF. The disgruntled ones seemed to be the historic winners who had already used it up but how many of these actually reduced their liquidity as a result? Conversely a number will have increased their liquidity in response given the incentive to do so. Would guess that the sportsbook had a far bigger impact than PC

Imagine you're earning c.£50k per year Betfair trading fulltime at 70+ hours per week. Suddenly you hit PC2 and this drops to £25k per year for the same amount of workload, investment and risk. At only £7.50 per hour you can earn much more elsewhere, so you decide it's no longer worth your while and exit.

These people will be big players who churn through multiple millions across hundreds of thousands of markets each year, and overnight this liquidity vanishes completely. If there was an annual allowance then at least it would encourage them to remain part of the ecosystem, even if only in a smaller way.

Gambling should be tax free, hell there's enough risk we all take in the markets every day.

So to then make people pay more tax (PC) than they would if they were working at Tesco is when people will say 'why do I bother'.

Fair enough for those on 250k+ a year to pay 20-25% PC I think is fair but even then they'll just lower and lower the threshold amount in the future.

[weemac]

Fair enough for those on 250k+ a year to pay 20-25% PC I think is fair but even then they'll just lower and lower the threshold amount in the future.

Inflation already does that.

[BFDon]

I'm not sure how much it damaged it in reality or affected the development of the exchange since. 250k is a very healthy allowance so no one would be deterred from starting out on BF. The disgruntled ones seemed to be the historic winners who had already used it up but how many of these actually reduced their liquidity as a result? Conversely a number will have increased their liquidity in response given the incentive to do so. Would guess that the sportsbook had a far bigger impact than PC

Imagine you're earning c.£50k per year Betfair trading fulltime at 70+ hours per week. Suddenly you hit PC2 and this drops to £25k per year for the same amount of workload, investment and risk. At only £7.50 per hour you can earn much more elsewhere, so you decide it's no longer worth your while and exit.

These people will be big players who churn through multiple millions across hundreds of thousands of markets each year, and overnight this liquidity vanishes completely. If there was an annual allowance then at least it would encourage them to remain part of the ecosystem, even if only in a smaller way.

I think such a drop would be quite rare, if you're churning that much through lots of markets providing genuine liquidity (not trap bets etc) then you're probably not going to be in the 60% bracket. But I appreciate your point and that would have happened in some cases but just don't believe it's had a huge impact personally.

[napshnap]

Conquer the U.S. market(s) ASAP and find a way to access Hong Kong. I'll leave it with you...


With the U.S. they've been waffling on about it for some while. It would breathe fresh money through the exchanges. Also remove the parasite that is the Sportsbook.


Brands under Flutter at the time of writing.


brands.png


The PC should be capped at 20% (same rate as capital gains tax for Crypto 10%-20%) At the same time, increase comms to 5% across the board. If both done at the same time, in line with access to the U.S. markets, Bobs your uncle.

+1!

[Derek27]

When the cost of energy sky-rocketed, pubs, restaurants, cafes, etc. didn't double their prices. They realised it just wasn't practical to pay twice as much as you did last week. Betfair started out at 5% comms and no PC. I guess they saw people making £100k+ paying very little relative commission and thought it would still be worthwhile for them if they pinched 50-60%.

I like the idea of a gradual increase in PC based on lifetime profits, but 30-40% in fairness should be a maximum. I can't see how it would work annually though. Someone who's built up a large profit for the year could blow it all before the year's out or try to arb it into his bank account.