Betfair penalties for successful punters

Arcee

While I'm familiar with bookies placing limits or closing punters accounts, I never thought Betfair would do the same thing. A friend of mine received the following email in September:

"We will shortly be making changes to our terms and conditions. These changes will come into effect on the 22nd of September 2008. From this date we will be introducing a new charging mechanism (Premium Charge) that will affect a small number of our most successful customers. We are writing to inform you that had the new charge been in place over the last 6 months then you would, at some point, have been required to pay Premium Charges. If your betting in the future continues to be as successful as it has been in the past then you could be required to pay Premium Charges in line with others who, like you, fall into the top 0.5% of our customers.
Please note that whilst the changes to our terms and conditions will come into effect on the 22nd of September 2008, the first charges will not be collected until the following week (week commencing 29th September 2008).
The changes to our terms and conditions and full details of the new charge can be found here. Any questions that you may have in relation to the new charge should be directed to premiumcharge@betfair.com.

The Betfair Management"



The (overly complicated) details about the new charges are on their website but essentially, it boils down to the fact that if you're in credit a lot and they don't get enough commission from you, they'll charge you a whopping 20% on your winnings. 20%!!! :eek:



For all intents and purposes, they might as well have closed the account. I don't know anyone who would stay gambling with them under those terms. As I said, I understand bookies restricting their customers but I really didn't think Betfair would do the same.....



Where's left to go if even Betfair doesn't want you?

adrian522

Arcee wrote: »

While I'm familiar with bookies placing limits or closing punters accounts, I never thought Betfair would do the same thing. A friend of mine received the following email in September:

"We will shortly be making changes to our terms and conditions. These changes will come into effect on the 22nd of September 2008. From this date we will be introducing a new charging mechanism (Premium Charge) that will affect a small number of our most successful customers. We are writing to inform you that had the new charge been in place over the last 6 months then you would, at some point, have been required to pay Premium Charges. If your betting in the future continues to be as successful as it has been in the past then you could be required to pay Premium Charges in line with others who, like you, fall into the top 0.5% of our customers.
Please note that whilst the changes to our terms and conditions will come into effect on the 22nd of September 2008, the first charges will not be collected until the following week (week commencing 29th September 2008).
The changes to our terms and conditions and full details of the new charge can be found here. Any questions that you may have in relation to the new charge should be directed to premiumcharge@betfair.com.

The Betfair Management"



The (overly complicated) details about the new charges are on their website but essentially, it boils down to the fact that if you're in credit a lot and they don't get enough commission from you, they'll charge you a whopping 20% on your winnings. 20%!!! :eek:



For all intents and purposes, they might as well have closed the account. I don't know anyone who would stay gambling with them under those terms. As I said, I understand bookies restricting their customers but I really didn't think Betfair would do the same.....



Where's left to go if even Betfair doesn't want you?

That's crazy...still though would love to be in betfair's top 0.5%....

ArmaniJeanss

You are misrepresenting what this is about. Its not Betfair penalising successful punters per se, its about Betfair getting a fair amount from winning traders.

So if you are doing 3 or 4 single bets a day and have a healthy winrate (fcuk it lets say you have a 100% winrate) then Betfair are not going to look for anything more from you.

If however you are a huge trader, betting a lay book to 101% on a multitude of markets, using your losses to reduce your commission exposure on your winnings etc, then Betfair want a bigger piece of your winnings.

At the moment they are only getting a miniscule (as low as 1/1000th of one percent) figure in total commission from a lot of their winningmost customers - by moving these customers to a new commission structure where they take 20% of their net winnings then this balance is being redressed.

Sensible move by Betfair.

Arcee

I agree that Betfair should charge more to commercial customers with a huge volume of transactions, gambling on thousands of markets. I should probably have given you a bit more background. In the case of my friend, he's far from a huge trader. He is not a professional punter and doesn't do this for a living. He gambles solely on Irish and English horse racing markets, not financial markets or any other sport. He doesn't use Betfair every day (mostly just at weekends) and I can count on one hand the number of lay bets he's placed over the years.

So if you are doing 3 or 4 single bets a day and have a healthy winrate (fcuk it lets say you have a 100% winrate) then Betfair are not going to look for anything more from you.

There's no denying he has an excellent win rate for the small amount of gambling that he does (hey, some people having nothing better to do with their free time but study form!! ), but Betfair is most certainly looking for more from him.

As a corporate entity, Betfair is of course entitled to make a profit whatever way they see fit, but I'm disappointed to see the company acting just like any other bookie and essentially making it impossible for certain punters to gamble with them. Unfortunately for them, they've lost a customer as a result of this. Would any of you honestly consider remaining with Betfair if you were under those same conditions?

abouttobebanned

ArmaniJeanss wrote: »

You are misrepresenting what this is about. Its not Betfair penalising successful punters per se, its about Betfair getting a fair amount from winning traders.

So if you are doing 3 or 4 single bets a day and have a healthy winrate (fcuk it lets say you have a 100% winrate) then Betfair are not going to look for anything more from you.

If however you are a huge trader, betting a lay book to 101% on a multitude of markets, using your losses to reduce your commission exposure on your winnings etc, then Betfair want a bigger piece of your winnings.

At the moment they are only getting a miniscule (as low as 1/1000th of one percent) figure in total commission from a lot of their winningmost customers - by moving these customers to a new commission structure where they take 20% of their net winnings then this balance is being redressed.

Sensible move by Betfair.

.

Dodge

Arcee wrote: »

Would any of you honestly consider remaining with Betfair if you were under those same conditions?

I'm sure most would do whatever is best for them. If he can get get more from going elsewhere he should. No one should be absolutely tied to one exchange or betting firm if they're serous about it (and your friend sounds like he's more serious about it than most)

Likewise if betfair gives him the markets, liquidity and everything elsehe needs, he should keep using them (when they're the best option).

Collie D

Top 0.5% of punters? If he doesn't bet that regularly I assume they mean strike rate rather than cash coming in? Any chance of a few tips? :pac:

k101

armani jeans , this charge by betfair doesnt just efect traders and arbers. I suggest you read more into it as it can efect any punter once they have bet in 250 markets in a year.As my profits are greater than 20 pc of the commission or implied commission that i have paid they wanted to start charging me this premium charge. Obviously i have taken measures to avoid paying it but some people won no what to do

ArmaniJeanss

k101 wrote: »

armani jeans , this charge by betfair doesnt just efect traders and arbers. I suggest you read more into it as it can efect any punter once they have bet in 250 markets in a year.As my profits are greater than 20 pc of the commission or implied commission that i have paid they wanted to start charging me this premium charge. Obviously i have taken measures to avoid paying it but some people won no what to do

Fair enough - my understanding of the total ins and outs of it is by no means perfect, and my earlier post is probably inaccurate/oversimplistic.
I've read section 5 on the below link and whilst its very tricky to follow, I can see how someone who is not trading, but has a high winrate on different markets could potentially fall foul of the new charges.
http://content.betfair.com/aboutus/?region=IRL&locale=en&brand=betfair

L1m1tless

This wont effect me thank god. Unless something crazy happens in the next year. :P pretty lousy decision by Betfair all the same

NewApproach

Betfair are alienating the very people on the site who make it work, the punters with the huge turnover.

Yes traders pay a tiny amount of commission relative to turnover, but without this turnover, where will the liquidity in the markets go? Betfair still make commission on the 'other half' of this money if you see what I mean.

Obviously betfair have it worked out or they wouldnt have done it, but I think that whatever financial gains they may generate in the short run could ultimately prove costly for betfair.

Mellor

Arcee,
you've made a pretty big mistake in the first post. The charge isn't 20%.

Firstly it, one of the conditions for qualifing for the premium charge is that;

if the total charges generated during that period are less than 20% of your gross profits

The period is 60 weeks, and you have to be in profit over the whole period. Apparently this applies to very few people 0.5%. So if it does, you are charged based on the following;

The Lesser of;
The difference between 20% of the previous week’s gross profits and the total charges generated during the week; and
The difference between 20% of the previous 60 weeks’ gross profits and the total charges generated during that period

The words difference and lesser are key there. Lesser of the two is obviously good for the punter, but difference means that the charge is not 20%, just that 20% is the max.

For example if you quailify by having your charges make up 18% of your profit, then you pay a charge of 2%. Basically, you have to be topped to to 20% charges. The only people who pay a 20% charge are those who somehow paid zero charges (is this even possible).

And obviously if you pay only 1% charges, then your stuck with a 19% charge on top. The fact that very few people even quailfy for <20% charges leads me to believe that its certainly weighted towards the 15%-20% zone.

Arcee

k101 wrote: »

Obviously i have taken measures to avoid paying it but some people won no what to do

Good for you :D - do you mind me asking what measures you took? My mate doesn't exactly want to stop using betfair but is struggling to see any other option.....

Mellor wrote: »

Arcee,
you've made a pretty big mistake in the first post. The charge isn't 20%.

I know the premium charge itself isn't 20%, maybe that wasn't clear in my post, but as you've pointed out:

Mellor wrote: »

For example if you quailify by having your charges make up 18% of your profit, then you pay a charge of 2%. Basically, you have to be topped to to 20% charges. The only people who pay a 20% charge are those who somehow paid zero charges (is this even possible).

And obviously if you pay only 1% charges, then your stuck with a 19% charge on top. The fact that very few people even quailfy for <20% charges leads me to believe that its certainly weighted towards the 15%-20% zone.

and this to me means that whatever way they can, Betfair is gonna take 20% of your winnings if you happen to be good at gambling.

It may be made up of a combo of basic charges and premium charges but the end result is that the successful punter pays 20% of their winnings to Betfair for no good reason. Bad customer service in my book.....

Bubs101

I'm surprised that your friend got one but I thought that this may have been introduced to stop other bookies making a profit by laying some of their liability on Betfair for a very small fee. If it was done on the overall amount made as opposed to the percentage made it would be very fair imo

dsmythy

Bubs101 wrote: »

I'm surprised that your friend got one but I thought that this may have been introduced to stop other bookies making a profit by laying some of their liability on Betfair for a very small fee. If it was done on the overall amount made as opposed to the percentage made it would be very fair imo

My first thought when i read the OP was "worldwide economic slowdown". I'd imagine even gambling industry behemoths like Betfair can't escape it. Although that reason does make sense also.

Nowso

This may be aimed at cutting down on people using betfair as a bank or hideaway for money.

This is more prevelent where u can make cash deposits .

Its like betfair bringing in banking charges