Can someone please answer a couple of questions for me?
Has the 20% level been replaced, i.e. is it just 40-60% now when lifetime profits are above 250k?
Was there a lifetime profits element to the old 20% pc?
Is there any kind of personal allowance before pc becomes payable (other than the deduction for commission paid)?
Thanks.
SF
Betfair Premium Charge
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spreadbetting
- Posts: 3140
- Joined: Sun Jan 31, 2010 8:06 pm
20% PC still in place but will become 40%+ once the net profit exceeds £250K and you fit the other criteria of 1000 markets and less than 40% paid in comms. So in effect it'll create a whole new set of PC payers who were above the 20% comm paid.superfrank wrote:Can someone please answer a couple of questions for me?
Has the 20% level been replaced, i.e. is it just 40-60% now when lifetime profits are above 250k?
Was there a lifetime profits element to the old 20% pc?
Is there any kind of personal allowance before pc becomes payable (other than the deduction for commission paid)?
Thanks.
SF
No lifetime element to the old PC other than meeting the 250 markets and the £1000 allowance that'd let you win £5K+ before being charged.
No personal allowances but I imagine like the normal PC they'll have to waive the first payment charges.
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andyfuller
- Posts: 4619
- Joined: Wed Mar 25, 2009 12:23 pm
Well I heard back from them this evening and they confirmed they had made an error in the figures they had given me.andyfuller wrote:Just heard back from Betfair after challenging their figures and I await a response but there is an error somewhere unless I have cocked up which I don't believe I have.
They state:
"*by net profits we mean the amounts won less the amounts lost, on all exchange markets, less all commission paid and Premium Charges debited."
However, they have based my Net Profit I believe on the same figure as used on the current Premium Charge.
They have taken my Gross Profit and subtracted:
~Commission Generated, NOT commission paid which is different;
So unless I have got it wrong, either the Net Profit Figure they have quoted me is incorrect or they have messed up the Press Release and meant Commission Generated
Or have I got it wrong?
It is as per the Press Release and is Commission Paid and not Commission Generated.
ive never really understood the prem charge never had to pay it.
can someone give me a good example of how it works using the figs below.
lifetime £300000
com paid £120000
weekly £1000
com paid £50
how much are betfair going to want on the weds? £350
can someone give me a good example of how it works using the figs below.
lifetime £300000
com paid £120000
weekly £1000
com paid £50
how much are betfair going to want on the weds? £350
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marksmeets302
- Posts: 527
- Joined: Thu Dec 10, 2009 4:37 pm
though I'm still below 250K, being a dutch citizin I'm already paying 43%. First there's the 20% PC from betfair, then another 29% to the dutch government.
What is left goes to the wife
I guest she will be quite disappointed when I tell her in the future I'll have to pay 60% first, and then 29% of the remainder: leaves 28%
But it can get worse. Suppose the tax man says this isn't gambling anymore, but a way to earn income. I'll be charged not with 29% but with 52%. Then I'm left with 19 euros for every 100 euros earned.
I wish all the big hitters a lot of wisdom.. I feel for you guys; this doesn't seem fair at all.
Mark.
What is left goes to the wife
I guest she will be quite disappointed when I tell her in the future I'll have to pay 60% first, and then 29% of the remainder: leaves 28%
But it can get worse. Suppose the tax man says this isn't gambling anymore, but a way to earn income. I'll be charged not with 29% but with 52%. Then I'm left with 19 euros for every 100 euros earned.
I wish all the big hitters a lot of wisdom.. I feel for you guys; this doesn't seem fair at all.
Mark.
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SilentDave
- Posts: 199
- Joined: Wed Jan 20, 2010 11:30 am
The whole thing is farcical, particularly Betfair's lame attempts to justify the increases.
They say "The Premium Charge was introduced in September 2008 to ensure that our most consistently successful customers are charged at least what it costs Betfair to provide the service that they ultimately benefit from."
I fail to see how it costs Betfair any more to provide the service to the big fish such as Peter - I probably place as many trades as the big players, they just don't generate as much profit!
In any case, even with a flat percentage rate the more profitable traders are paying more.
To try and suggest that they are subsiding successful traders' profits when they are paying hundreds of thousands in Premium Charge is blatantly a lie.
They say "The Premium Charge was introduced in September 2008 to ensure that our most consistently successful customers are charged at least what it costs Betfair to provide the service that they ultimately benefit from."
I fail to see how it costs Betfair any more to provide the service to the big fish such as Peter - I probably place as many trades as the big players, they just don't generate as much profit!
In any case, even with a flat percentage rate the more profitable traders are paying more.
To try and suggest that they are subsiding successful traders' profits when they are paying hundreds of thousands in Premium Charge is blatantly a lie.
Betfair's thinking will presumably be along the lines of 'If the big hitters were out of the picture, we could do what they do, and make the profit they make. That would make us more money than we currently get from them in commission, Premium Charge, etc. Therefore, they are costing us money.'
It's a logical argument, even if you take the view that it's a conflict of interests for Betfair to be both a market participant and honest broker...
Jeff
It's a logical argument, even if you take the view that it's a conflict of interests for Betfair to be both a market participant and honest broker...
Jeff
SilentDave wrote: I fail to see how it costs Betfair any more to provide the service to the big fish such as Peter -
and It's also about keeping the money in the pot for as long as possible.
If Betfair can stop most of it leaving by removing the big long term winners then the money just keeps being churned around constantly, making them commision.
long term losers winning from other long term losers only to give it all back again to other losers
.
much like how bookmakers operate, they are not botherd if a loser wins every now and again because they know they will come back lose it all agian some day.
If Betfair can stop most of it leaving by removing the big long term winners then the money just keeps being churned around constantly, making them commision.
long term losers winning from other long term losers only to give it all back again to other losers
.much like how bookmakers operate, they are not botherd if a loser wins every now and again because they know they will come back lose it all agian some day.
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andyfuller
- Posts: 4619
- Joined: Wed Mar 25, 2009 12:23 pm
To answer some questions:
There are other implications but I doubt that will bother many and those that it does I am sure will be well aware of them and you won't need telling.
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https://account.betfair.com/regpay-myac ... mmary.html
This explanation can then be used for the future when the like of me and other experienced traders have vanished for pastures new.
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Spot on Freddy, this is the main reason imo.
Obviously you have to let people win a bit so they have said £250,000 and as we have seen people still think this is a lot of money and something to aim for. For some yes it is but for plenty it isn't. Especially not if it takes you a long time to get it, you need to keep the opportunity cost in mind of making £250,000 on Betfair, not in a year but lifetime against what else you could do with all of the time you spend chasing that elusive dream.
I would guess a lot of traders on here came to it after seeing what the likes of Peter Webb et al made. I know I did. But I also had a dream of making a lot more than £250,000 out of it. If it takes you 10 years to earn £250,000 that is £25,000 for each year you have spent getting there. But what do you plan to do after the 10 years and hitting the £250,000. Are you going to plod on giving 60% to Betfair, I bet in 10 years you will wish this version of the Premium Charge still existed as it won't!
So what do you do, you haven't worked for 10 years, who is going to employ you, you haven't exactly lived a great life spending so much time and effort and taken a huge risk to earn an average of £25,000 a year. Your CV doesn't look great, you have no prospect of making a huge amount more more than likely from trading, lets say you are up to making £50,000 a year from trading. So now you get to keep £20,000 as you have to give 60% to BF at best.
Had you spent 10 years working in a normal job you would have 10 years worth of employment and the career path that that would map out and you would be well on the way, I would say you would be earning more than £20,000 a year from a job you had been in for for 10 years. You have been able to get a mortgage as you have an income where as if you were spending 10 years trading no bank would touch you and you would not have been able to save much if anything so you don't own a house. I could go on but I am even starting to bore myself lol.
But I hope it makes people who seem to be saying I will bother about it when I start making money think again about what this really means, not for the 500 people it affects on July 18th 2011 but the thousands it will effect on July 18th 2021 or way before.
By all means carry on chasing the dream but think long and hard about putting in all the effort you need to just to earn £250,000 as I hope I have demonstrated £250,000 isn't all that much when you weigh everything up.
As a final note, the above examples and details is not meant or meant to reflect my personal circumstances, I am just trying to give background to something that at present I get the impression people don't seem to fully understand or comprehend.
mcfc1981 wrote:which is better to have andy commission generated or commission paid?
It matters to the people who have not yet reached the limit. Which is better depends on the individual but to the vast majority the better figure is for once the one Betfair are going to use, Commission Paid as this will be bigger so it means more money is taken from your Gross Profit giving you a lower Net Figure and thus more scope to make money before you hit the £250,000 and it can become game over for many.mcfc1981 wrote:what does it matter anyway they are going to top them all up to 40%
There are other implications but I doubt that will bother many and those that it does I am sure will be well aware of them and you won't need telling.
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I have explained the PC to more people than I care to remember and with a bit of effort people could explore the numerous forums to find many explanations but as I am in a generous mood, god knows why given the fact Betfair has just made me redundant, I will give a detailed explanation if you post a screen grab of your PC statement up. You can get it if you log in to your BF acocunt then go to:mcfc1981 wrote:ive never really understood the prem charge never had to pay it.
can someone give me a good example of how it works using the figs below.
lifetime £300000
com paid £120000
weekly £1000
com paid £50
how much are betfair going to want on the weds? £350
https://account.betfair.com/regpay-myac ... mmary.html
This explanation can then be used for the future when the like of me and other experienced traders have vanished for pastures new.
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Spot on Freddy, this is the main reason imo.
The reason people who will be hit like this is because if you leave £100,000 in the pot like freddy says Betfair eventually gets the lot. People like Peter take it out of the pot and spend it on Pianos and the like. Betfair can no longer get their hands on this. So if they want to earn the equivalent money that this money would have created for them they have to attract new money into the system, it is much more expensive for them to do this than to do nothing and just let the people keep losing to each other and them taking a cut each time. That money could be spent by them attracting more people still but that means more money in the pot for them to eventually take. And that is how winners cost Betfair more money than people who don't win.freddy wrote:and It's also about keeping the money in the pot for as long as possible.
If Betfair can stop most of it leaving by removing the big long term winners then the money just keeps being churned around constantly, making them commision.
long term losers winning from other long term losers only to give it all back again to other losers
much like how bookmakers operate, they are not botherd if a loser wins every now and again because they know they will come back lose it all agian some day.
Obviously you have to let people win a bit so they have said £250,000 and as we have seen people still think this is a lot of money and something to aim for. For some yes it is but for plenty it isn't. Especially not if it takes you a long time to get it, you need to keep the opportunity cost in mind of making £250,000 on Betfair, not in a year but lifetime against what else you could do with all of the time you spend chasing that elusive dream.
I would guess a lot of traders on here came to it after seeing what the likes of Peter Webb et al made. I know I did. But I also had a dream of making a lot more than £250,000 out of it. If it takes you 10 years to earn £250,000 that is £25,000 for each year you have spent getting there. But what do you plan to do after the 10 years and hitting the £250,000. Are you going to plod on giving 60% to Betfair, I bet in 10 years you will wish this version of the Premium Charge still existed as it won't!
So what do you do, you haven't worked for 10 years, who is going to employ you, you haven't exactly lived a great life spending so much time and effort and taken a huge risk to earn an average of £25,000 a year. Your CV doesn't look great, you have no prospect of making a huge amount more more than likely from trading, lets say you are up to making £50,000 a year from trading. So now you get to keep £20,000 as you have to give 60% to BF at best.
Had you spent 10 years working in a normal job you would have 10 years worth of employment and the career path that that would map out and you would be well on the way, I would say you would be earning more than £20,000 a year from a job you had been in for for 10 years. You have been able to get a mortgage as you have an income where as if you were spending 10 years trading no bank would touch you and you would not have been able to save much if anything so you don't own a house. I could go on but I am even starting to bore myself lol.
But I hope it makes people who seem to be saying I will bother about it when I start making money think again about what this really means, not for the 500 people it affects on July 18th 2011 but the thousands it will effect on July 18th 2021 or way before.
By all means carry on chasing the dream but think long and hard about putting in all the effort you need to just to earn £250,000 as I hope I have demonstrated £250,000 isn't all that much when you weigh everything up.
As a final note, the above examples and details is not meant or meant to reflect my personal circumstances, I am just trying to give background to something that at present I get the impression people don't seem to fully understand or comprehend.
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rubysglory
- Posts: 309
- Joined: Thu Nov 04, 2010 7:02 am
Am I right to assume that a simple of game of arbitrage between BF and Bookie may offset the PC ?
rg
rg
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andyfuller
- Posts: 4619
- Joined: Wed Mar 25, 2009 12:23 pm
Doh - I could have saved myself a lot of time if I had read this a few hours ago:
http://centrecourttrading.blogspot.com/ ... l#comments
http://centrecourttrading.blogspot.com/ ... l#comments
The anonymous post about avoiding PC was interesting though. I'd be keen to know if BF start flagging activity like that. Perhaps identifying unusual betting patterns of customers etcandyfuller wrote:Doh - I could have saved myself a lot of time if I had read this a few hours ago:
http://centrecourttrading.blogspot.com/ ... l#comments