Welcome to the News desk.
|Betfair's premium charge increase welcomes winners with open palms
| The betting
exchange claims only 500 customers will pay the new rate, but it could have an
adverse affect on average punters
Nothing is guaranteed to stir up punters as much as threatening to
take their winnings away, and it's no surprise that changes announced this week
to Betfair's premium charge structure have been met with a mixture of outrage
and transparent threats to take business elsewhere.
emphasising that only a tiny minority of Betfair's customers will be affected
by the creation of a new top tier of premium charge payers only punters
who are more than £250,000 in profit on the exchange will have to pay at
the new rate. Betfair estimates around 500 of their 3.8 million users will be
However, everyday users of Betfaircould be indirectly affected if
the increased charges mean that traders who dip in and out of many markets for
small but steady profits, decide it is no longer viable to continue to use the
website when faced with a tax of up to 60% on their profits.
of traders play a significant role in the liquidity of many racing markets,
although a statement from Betfair issued to the City, along with their latest
results, suggested that any holes could in the future be plugged by the
development of "an integrated exchange and sportsbook combination"
effectively an acknowledgement that Betfair believes it can operate
simultaneously as bookmaker and betting exchange.
perhaps be limited towards premium charge-paying punters using faster picture
feeds or work from the racecourse to hoover up money on in-running racing
markets. Along with those colloquially described as "courtsiders"
exchange punters who have made money from trading in-running on tennis matches
by heading to the tournaments and being first to the back or lay button every
time in-running racing punters who lay bets placed on fallers are often
seen, even among their own, as parasites. Furthermore, those utilising computer
programmes and algorithms to produce returns with minimal overheads will
probably continue to operate on the same basis.
Traders who use
dedicated applications, that utilise huge volumes of data to build up
statistical models are presumably the customers Betfair refers to as being
those "who currently pay a rate of commissions and charges that does not
reflect the benefit they gain from the Betfair ecosystem".
But there are also a number of other racing
punters, those who rely more heavily on their knowledge of the formbook, who
will be affected by changes to the premium charge.
A Betfair punter,
for example, who has made £25,000 a year over the last 10 years on racing
will now have to hand over between 40 and 60% of any future profits if
he doesn't do this naturally through commission generated, then Betfair will
simply debit the difference.
That seems an altogether less satisfactory
conclusion, particularly as several well-known Betfair punters who have made
money out of racing have reinvested in the sport through ownership.
Betfair's former promise that "winners are always welcome", quietly
withdrawn when the first 20% premium charge was introduced in 2008, clearly no
longer seems to apply to this group and that's a shame (although Betfair would
no doubt argue that winners remain more welcome with them than with fixed-odds
rivals they just have to pay more than they did before).
inception, we have provided customers with a unique and innovative product that
has consistently offered them, on average, the best value on the market," read
a statement from Betfair.
No arguments with those comments here. In
common with many British racing punters, Betfair has transformed a large chunk
of my betting activity. No restrictions; better prices; an ability to trade out
and take profits before and during races. But, then, I'm not one of the
"Betfair 500". A Facebook group formed to discuss the "premium charge fiasco"
was alive with activity on Wednesday, with contributors calling for strikes
and/or the relocation of business to Betdaq, Betfair's biggest rival.
However, similar rallying calls have fallen on deaf ears before. The
prospect of a battle between Betfair and its most successful punters may have
repercussions elsewhere, not least for fixed-odds bookmakers, who could
potentially expect to see some old foes attempting to return.
winners are unlikely to find much in the way of a warm welcome at their door