New PC charge now up to 60% from 18 July 2011

[freddy]

Well there are limits to how much you can make on Betfair and if they keep taking more and more, people may well find better more profitable things to do with there time.

[Iron]

I asked Betfair how they justified the increase. This was their cut-and-paste reply:

'Our aim is to create a pricing structure that is fair for all of our customer using the exchange.

This adjustment ensures we are seeing fair returns for the service we provide to this very small number of our most successful of customers.

We believe this new adjustment sets a fair threshold, above which, we are entitled to ask customers to pay the charge at a higher rate for the service we provide them'.

Jeff

[freddy]

i dont think its game over we just need to move to a different company thats all we have betdaq dont we ? only thing we do need is a updated platform .

its game over for betfair

The problem is though Betdaq needs more losing punters not more pro traders.

And unfortuantly there is still no reason for them to use betdaq over betfair.
thats why Betdaq could not capitalise very much when the first P.C was introduced .

[superfrank]

PREMIUM CHARGE FAQ
https://promotions.betfair.com/pcharge/

[Iron]

'Doublespeak' is the word that comes to mind...

Jeff

PREMIUM CHARGE FAQ
https://promotions.betfair.com/pcharge/

[superfrank]

The problem is though Betdaq needs more losing punters not more pro traders.

And unfortuantly there is still no reason for them to use betdaq over betfair.
thats why Betdaq could not capitalise very much when the first P.C was introduced .

That's true.

What they need is a 2 pronged approach - say 2% commission for punters and (up to) 5% commission for traders.

I don't know too much about Betdaq - does their technical infrastructure cut it in comparison to BF? (no laughing at the back!).

[Zenyatta]

Seems to run totally contrary to the claim that winners are welcome. The 20% seemed tolerable, but 60% is clearly designed to force out (in a very heavy-handed fashion) anyone who exceeds the 250k threshold.

[Iron]

I'm inclined to disagree (although you could be right).

Take a trader who earns £100K per year. Currently, he pays £20K premium charge. He probably also turns over something like £50 million per year, so pays a bob or two in commission.

Why would it be in Betfair's interests to scare off that trader?

Jeff

Seems to run totally contrary to the claim that winners are welcome. The 20% seemed tolerable, but 60% is clearly designed to force out (in a very heavy-handed fashion) anyone who exceeds the 250k threshold.

[superfrank]

Seems to run totally contrary to the claim that winners are welcome. The 20% seemed tolerable, but 60% is clearly designed to force out (in a very heavy-handed fashion) anyone who exceeds the 250k threshold.

It is a similar approach to Labour's "soak the rich" taxation policies in the 70s. This resulted in a brain drain and Britain having to call in the IMF!

There comes a point when increasing tax rates actually generates less revenue - see Laffer curve http://en.wikipedia.org/wiki/Laffer_curve.

[andyfuller]

I'm inclined to disagree (although you could be right).

Take a trader who earns £100K per year. Currently, he pays £20K premium charge. He probably also turns over something like £50 million per year, so pays a bob or two in commission.

Why would it be in Betfair's interests to scare off that trader?

Because £80,000 leaves the pool forever. If it stays in the pool Betfair eventually get it all.

[Iron]

True - Overall, do you think that high earning traders contribute to Betfair's bottom line, or detract from it?

Jeff

Because £80,000 leaves the pool forever. If it stays in the pool Betfair eventually get it all.

[andyfuller]

They don't directly to any great extent but indirectly yes, one prime example being Peter Webb, how many of us here would be trading without the likes of him. As for the quote of 500 people, that may be true as of today, but what about in a years time, five years time, or 10 years time. £250,000 isn't much over Betfair's 10 years but add in another 5 years or more and it becomes less and less.

Anyone know of any banks looking for traders

[Iron]

There was a trader whose name I forget, who had a well-known blog, who quit Betfair trading to trade in the City.

Why not drop him a line?

Jeff

Anyone know of any banks looking for traders

[andyfuller]

There was a trader whose name I forget, who had a well-known blog, who quit Betfair trading to trade in the City.

That would be Mike Baker.

[Iron]

Yep - that's the name I was looking for!

Jeff

That would be Mike Baker.