Sep
9
Betfair – Winners are welcome!! Or are they??
Filed Under News | 5 Comments
Betfair has now (Monday) introduced what we could call a tax which only affects people winning consistently. I really think that Betfair has moved in the wrong direction over the last couple of years and this new stunt just proves that Betfair maybe don’t like winners as much as they have said.
Betfair insists that the new charges will affect less than 0,5% of it’s customers. These customers are the big winners. Then you may ask yourself if Betfair still is a place where winners are welcome?
Underneath you can see if the premium charges will affect you.
Betfair Premium Charge Summary
You will only be considered for the Premium Charge if, over the previous 60 weeks, you satisfy the following criteria:
Your account is in profit;
Your total charges paid are less than 20% of gross profits; and
You bet in more than 250 markets.
Two further conditions reduce the likelihood that you will be required to pay the Premium Charge:
Any single win that constitutes more than 50% of your gross profits over the previous 60 weeks will be excluded from the calculation; and
Each customer will have a 60 week allowance of £1,000 against the Premium Charge.
Each week the customers who meet all the conditions set out above will be charged the lesser of:
The difference between 20% of the previous week’s gross profits and the total charges paid during the week; and
The difference between 20% of the previous 60 weeks’ gross profits and the total charges paid during that period.
Examples
Example 1
You have won gross profits of £10,000 over the previous 60 weeks having bet in 800 markets. You have paid total charges of £980; all of which has been paid through commission generated. You have not been charged any Premium Charges over the previous 60 weeks although you have fully used up your annual allowance of £1,000.
During the previous week you won £500 and paid total charges of £80. You are therefore charged £20 in Premium Charges ((£500 x 20%) – £80 = £20).
Example 2 – Charge Allowance
You have won gross profits of £10,000 over the previous 60 weeks having bet in 320 markets. You have paid total charges of £1,050; £850 commission generated, £200 Transaction Charges and £0 Premium Charges.
During the previous week you won £500 and paid total charges of £50. In the absence of a charge allowance you would have been charged Premium Charges of £50 ((£500 x 20%) – £50 = £50). However, the £50 is offset against the £1,000 charge allowance meaning that no additional Premium Charge is paid. You then carry over the balance of your charge allowance (£950) to offset against potential future Premium Charges.
Example 3 – Excluding ‘big’ wins
You have won gross profits of £8,000 over the previous 60 weeks having bet in 500 markets. You have paid total charges of £1,025, all of which has been paid through commission generated.
During the previous week you won £5,000 from a single market and paid total charges of £125. As the win constitutes more than 50% of your total gross profits over the previous 60 weeks, it is excluded for the purposes of calculating the Premium Charge. However, the commission generated on the win does contribute towards total charges paid.
After the win is removed you have gross profits of £3,000 and total charges of £1,025 and therefore incur no additional Premium Charge.
This new fee structure is despicable. Betfair already gouge by charging the highest exchange commission and having the highest requirements to get commission discounts. They already profit to the tune of millions per week from all of the losing punters, and now they want a piece of the big punters pie.
Betfair is a cash machine and this new premium charge can be a very big mistake.
It´s the same story like Ebay. Always rising the charges.
So in future I only play my INPLAY and BOT bets with Betfair, and the rest with Expekt, Pinnacle, Unibet and so on.
So long….
Frank
I imagine other exchanges such as WBX and Betdaq will be looking at a similar success penalty as well.
Jon
It is wrong to think that this will only hit the big winners.
The £1000 allowance over 60 weeks works out at just £2.37 per day. If you average more than this amount per day then you will become liable to pay the Premium charge.
If you have a lot of winners and a lot of losers then you may not pay it, due to the commission you pay (actual and implied) on your bets.
However, if you regularly win small amounts with few losers, you will find that you end up paying this tax.
Apart from the fact that you need a degree in maths to work out these charges, Betfair have not made the information readily available to the punter to enable him to TRY to work out whether or not he is likely to be paying tax on his winnings.
There is no information avaialble that shows your last 60 weeks profit and loss, nor is there any information showing what commission you have paid or implied commission you have created, over the past 60 weeks.
I have been with Betfair for about 6 years and have been very grateful to them for the opportunities they have given me. However, the first time I get hit by this tax, I will be moving to Betdaq.
Does Betfair still welcome winners? Most definitely.. they fleece them!!
I will be moving from them. I don’t like thieves. Next year they will introduce more charges. It’s a known old trick of “business”