As long as you don't withdraw that money or stop circulating it through the exchange it doesn't cost Betfair anything in simple terms. But when that money is withdrawn or stops circulating through the exchange Betfair have to spend money replacing it by attracting new customers, for example they have to pay for TV adverts.fuzzer54 wrote:With Betfair you're taking money off other traders or punters. Betfair continues to make a profit however much you win.
They say at 20% PC they break even on those PC people. They then decided that that wasn't good enough and they wanted all customers to be profitable for them so they introduced higher PC.
One issue is that they have seemingly not added imo much other value to these PC payers. For example, I offered liquidity up to the exchange. Now my money is no longer offered up to the exchange as I am no longer a customer. Take me as an individual case and it doesn't make a huge amount of difference but add up all the people who the PC effects and over time there is likely to be a shift in the way in which Betfair has worked. Betfair have decided that any negative impact of the PC does not outweigh the financial benefit that the PC has/will brought for them.
Time will tell but it won't necessarily be easy to tell for you and I as of course many other factors will be changing at the same time so it will be very difficult to pin point the impact of the PC chages. Betfair with access to a lot more data should be in a better situation to establish the outcome. But it is likely to be a slow and subtle change over quite easily several years.
