THAT DREADED LETTER FROM BETFAIR!

I just got this dreaded email (below) from Betfair!
I thought that by winning a few quid over a year or so would not cause me to be eligible, but clearly they think that i have won far too much money!
Effectively I now am paying  20% not 5% commission on winnings. Whilst I like to do what i can to help local charities and the poor and needy, having paid out £1700 in commission to Betfair last year, i do not consider these people a special case! How they can justify these charges after yet another outage today is beyond me.
Anyone with a bright idea as to how to minimise these absurd charges welcome!
 

We are writing to inform you that last week, for the first time, you would have been required to pay Premium Charges.  However, in line with our policy for customers that incur the charge for the first time, last week's Premium Charges have been waived. The charges should appear on your account statement as both a 'Debit' and a 'Credit' of exactly the same amount.

Please be aware that in future, if your betting continues to be as successful as it has been, you may be required to pay Premium Charges.

Full details of the charge can be found in the 'Betfair Charges' section of 'About Us'. Any questions that you may have in relation to the charge should be directed to [email protected] .

The Betfair Management
 
 

 
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hi
betdaq has no prem charge at the moment.
if you have made that amount, then it would pay you to have a custom bot made for betdaq.

well done (wish i had to pay prem charge, maybe one day)

mcbee

Congratulations ! Most of us dream of having to pay the Premium Charge. There is discussion of it on other trading forums which you may find of help. There is a software called Geek's Toy. It is quite unlike MFP so I hope nobody minds me mentioning it here. Take a look at the forum at geekstoy .com/forum

I am sure that the more sensible people there will be able to help you.Be sure to search for Premium Charge on that forum first.

I would be very careful about 'tax evasion'. Betfair are very aware of this technique and if you start placing larger than normal bets or a different type of bet than normal they will view this as you trying to avoid 'paying them their money' and more than likely freeze your account. Take the hit then move on to Betdaq in my opinion.

Good plan Scummbags
Problem is Betdaq does not work with Market feeder and  liquidity is still a problem particularly in the horse racing mid price market where most of my activity is.
Looks like whatever one does there is a downside.....................

Congratulations and commiserations!

The only way to reduce premium charges is to lose more and that's very hard[for you by the looks of things]! The only other way is to have a strategy that more or less breaks even after paying commission.

Needed to bump this as I was not aware of it until now.

From Betfair:
---------------------

Premium Charge Summary
You will only be considered for the Premium Charge if, over the lifetime of your account, you satisfy the following criteria:
Your account is in profit;
Your total charges generated are less than 20%† of gross profits; and
You bet in more than 250 markets

-----------------------



Lets assume:
For every 1000 bet you make 10% and win 100.
Your Comm rate is 3%

OK.
Your Profit is 100 so you need to have paid 20 in comms or you get the Premium Charge.

Lets have an 6/5 money scenario for 10x100 bets for a 10% profit ( so you get 6/5 with 50% winners).

Start with 1000

5 x 100 bets lost = -500
5 x 100 bets Win = +600  

For a total of 1000-500+600= 1100

Total profit 100

Comms are payable on the 600 won. 600x3%=18

You have only paid 18 for you 100 profit  (18%) and will be subject to the Premium charge.



Now lets take the same 10% profit margin with 10/1 shots. ( you get 10% winners that pay 10/1)

Start with 1000

9 x 100 bets lost = -900
1 x 100 bet won = +1000

For a total of 1000-900+1000= 1100

Total profit 100

Comms are payable on the 1000 won. 1000x3%=30


This time you have paid 30 for your 100 profit (30%) and will not be subject to the premium charge.


BOTH these scenarios won 100 for each 1000 or a 10% profit, but its betting the lower prices ( as an average ) that will incur the the Premium charge.

The way I see it is that the lower the odds you bet at then the higher the risk of the Premium charge.

Anyone concur?

In a nutshell. If you are NOT paying the premium charge you are doing badly as the minimum  Betfair will take ( regardless of comm rate ) is 20% ofyour winnings.

Once you have made 250,000 UKP then the minimum they will take is 40% of your winnings ( again regardless of comm rate ).

Also if you are in AUS then you will also have a Turnover Charge.

Makes accumulating points for a lower comm rate a joke.