How to beat the Premium Charge

[Mike_IG]

Arbing for me stops the premium charge, my Betfair account has gone from £7000 profit to something like -£2000, the trouble for me is keeping the bloody bookie accounts open.

[Temujin]

Arbing is the obvious answer. Not only will you make good profit out of doing it, but will increase your commission to the point of not having to pay PC. Also, you will pay less commission on your wins.

Problem with this however, is most people will start too late. You simply cannot start arbing if you are already paying the PC. If you get alot of losers the first week, you are spending 15% or so of your profits from your lay bets, on the PC. Considering you aren't making much out of these losers, like 2%, you are paying more than you make in PC.
If it works, great, but if it doesn't, you are screwed (or at least it will cost you heaps while getting your account to the non PC stage).

The only other way I would think, is to gamble. But the same goes with that. If you are already paying the PC, you are not only gambling on the result of your gamble, but also if you win heaps, you will pay more of your profits in PC at the start.
Now unless you are an exceptional gambler, you won't be looking at more than % profit margin (most obviously will be looking at a loss, but automated systems, you probably won't be looking at much of a profit at all, less than 5%).
So even if you make 50% in your first week from your pure gambling, that means nothing in the long run, as 1 week you may lose 50%. It will average out in the long run, meaning the huge PC portion you will have to pay on your first weeks profits, will ultimately give you a losing system.

If you have the money to "invest" in this strategy, then by all means go for it. I guess, if BF are "true odds", take out commission, and you are losing your commission on your gambling. If you are a big trader, this may be anywhere from 2-4%. But if you are spending an extra 15% of your trading profits on PC anyway, then I guess if your ratios are right, you will save 10% of your PC simply by gambling.

If you can start doing this before paying the PC, then you should be ok. Closer to PC, the more of a gamble it becomes. And obviously, when starting out, you don't know if you are going to profit anyway, so such a strategy on a limited? bank may not be a good idea anyway.

In saying all of that, I ran a system for 18 months when I started on BF. Idea was simple, back every favourite, at best odds I could get. Also ran it alongside a progressive staking plan I came up with.
I returned around 101%. Very small profit margin. Point of this though, is that to run this system, to gain 100 dollars a day, I needed around a 50k bank to do it. Very high investment for a small gain. I guess you could say, a bit risky. This being said purely to show that running a "bot", or gambling system to offset PC, may require a bigger investment than some might think. Although, I guess you don't need it to profit, just to break even. Problem is, you will have huge runs of outs, regardless of your strategy.
Easy to say gamble to return 100% to offset your PC, but considering the "return 100%" scenario, is not based on returning 100% each bet, but averaging out to 100% over the life of your system. Some months you may be going at 70%. Some at 130%. Can your bank handle that kind of gambling?

[kawasaki]

wanna less charges? put more money on other exchanges, to create more equal state across this bussines field. while betfair have monopoly, they can make any charges they want and laugh.

[Public Enemy]

wanna less charges? put more money on other exchanges, to create more equal state across this bussines field. while betfair have monopoly, they can make any charges they want and laugh.

True, and I would use my Daq account if there was more liquidity in the tennis markets.

Trouble is, every other trader probably feels the same, we're all waiting for everyone else to get the ball rolling.

[lewismbet]

Ok I am pretty tired so I expect there is a major flaw in this, possibly due to each week having a different calculation.

Would it be possible to see it as a 'bonus' of sorts. I.e. if you have 1000 profit which would result in a charge of 200 you account for these figures and make one large arb.

Back 900 @ 2 [betdaq/bookie] then lay 1000 at 2 on betfair.

If you win on betfair then you are 100 pounds up, if it loses you are 100 pounds down however you pay no Commission this week so you have halved your commission.

This works in the example above however I can foresee issues where commission is factored in as I haven't read the exact details of the charge but it is a different way of looking at reducing liabilities. [Obviously this bet would have to be the last of week and settle just before the closing date.[

Lewis

EDIT - falls down as if you win at betfair your profit is now 2000 so your premium charge is 400 for the week - damn

[fdougal]

legal action

I joined betfair or betunfair as I now call them, about 6 months ago and was happily spending an afternoon watching the racing when I noticed just over £1000 go from my account, I rang and got this whole like about PM charges. I was told I would be hit again for money the following Tuesday. I carried on using the account till Monday night and withdraw all the money, I am currently in debt to betfair to the tune of nearly £2000. I tried writing to them and got the usual rubbish about not making enough money for them, which is rubbish I only make them money when I pay commission, its the people who lose all the time who cost them.

So then I started a plan how much money could I cost them, well emailing them meant they have to reply so every day I will send them some emails wasting their time, I think about 50 will do, a simple copy and paste works wonders. Asking for call back works well too. But this was all small compared to contacting the gaming commission and making a complaint of excessive charges, they agreed that the charges although could be made did seem excessive, £3000 in two weeks is a lot to pay anyone, if I include the first week they so kindly refunded then it is well over £5000. So I am currently getting evidence and then going to court to get the PC reduced, to either a max payout per year or a reduced percentage.

Ill keep you posted on the results, but Im sure if I win then it will become common knowledge.

[ALF]

if I include the first week they so kindly refunded then it is well over £5000.

No offence but if you were making enough to be charge £5,000 in 3 weeks you must have been making a HUGE amount of money even after the Premium Charge. For someone to make that just 6 months after joining Betfair that is dare I say it, unbelievable.

If I was making over £10,000 a week I don't think I would have any problem paying the Premium Charge and I know I wouldn't stop using Betfair!

Enjoy your retirement!

[Temujin]

There is nothing saying he is making 10,000 a week. Does not matter what he pays in commission, there is nothing to say he isn't losing 9,000 to another account.

I do agree though, that something doesn't sit right, but benefit of the doubt for now.
Really not sure what chance you think you will have in court. Not sure how your totes work, but here, they take 17% or so out of every market and call it profit. Spread the rest between the winners. You pay 17% on every winner, 0% on every loser. But guess what, your loser doesn't offset the 17% you have to pay next time you have a win.
What about the pokies? They take out more. They take 20%+ of turnover.

The totes over here basically run racing. A decision like that over here would nearly end it. Maximum commission? The totes would have people lined up to open an internet account. Nobody would use the totes any more (well, a few would, I question why they do now), everybody would be using their internet account so their losses could be offset against their wins. The government would lose a pay out, racing clubs would lose sponsorship, and we would be left with bare minimum horse owners, leaving the biggest of the big playing for all the prize money, whatever was left. The number of meetings would drastically reduce, leaving a flow on effect of less people interested in punting, less turnover, less trading, worse odds.
Wonder what would happen on the stock exchange if there was a limit on commission that could be paid. :O

Don't get me wrong, I hate the idea of the PC as much as anybody for what it will mean to me in the future. But lets be honest here, traders found a flaw in the system, and BF rectified it.
I pay about 80% commission rate, and you are complaining about 20%?

[Talisman]

Just trying to understand the PC and how it may relate to me.. I can consistently pull money out of the market now, the AU one at any rate, Im still working on the UK one, but hopefully just a matter of time, with my trading.

So far as I can see if my account is always at least 20% commission paid on the overall profit then the PC will never be applied. Im just trying to clarify if this is the case?

I am in the (hopefully fortunate) position that I am a punter as well, which means that as long as I do all my transactions on one account, then my punting activities will more than generate enough commission to cover my trading (as Temujin said - he's paying a very high % commission, as am I).

It's almost as if Im trading to reduce my commission %! So, if the 20% holds, then that's going to "beat" the PC, for me? I am still paying a 20+% commission so Im not technically beating it..

[Temujin]

As far as I know, it doesn't matter if you use 1 account for all transactions or not. The PC is based on your P+L with BF, not your individual account, at least, as far as i know. So if you have 2 accounts, the total P+L between the 2 will be the figure used.

Not sure I understand why people use different accounts though. I find it hard enough to keep my BF points up using 1 account, let alone trying to pump some points out with different accounts.

[Talisman]

Not sure I understand why people use different accounts though. I find it hard enough to keep my BF points up using 1 account, let alone trying to pump some points out with different accounts.

Well I use separate ones to seperate my trading money from my punting money. I dont want to use my punting money for trading and vice versa. It keeps it clean for me.

[Anonymous]

Not sure I understand why people use different accounts though. I find it hard enough to keep my BF points up using 1 account, let alone trying to pump some points out with different accounts.

I use different accounts to seperate the different types of trading I do as it makes keeping track of it all much easier. I don't see any point in the points as if i reduce my com. through points I pay it back when I pay the weekly Premium Charge.

[Talisman]

Alright, me again on this old chestnut.

Lets say you've made 1k profit trading for the week, and you've already drained your "free" quota so you're going to pay 20% on top of the pittance you've already paid in commission.

You take the $1k, find a two horse race or similar (cricket + draw). Currently Aus vs Pakistan is sitting on 101.6% book, so close enough.

Aus > 1.14
Pak > 21
Draw > 11

So you back Aus for 877, Pak for 47 and the draw for 90. You've just spent your $1k, and you'll get it back less 5% (or less) commission on the whole $1k. So instead of paying 20% you're back to paying 2-5%.

Does this sound right? Will it work? (You might want to pick an event that settles the same day rather than into the future).

[YoungTrader]

Does this sound right? Will it work? (You might want to pick an event that settles the same day rather than into the future).

that will not work, you have to loose money from your betfair account to make implied commission, you are just upping your PC otherwise

[Talisman]

that will not work, you have to loose money from your betfair account to make implied commission, you are just upping your PC otherwise

I would have thought that they would charge me a commission on the whole winning lot, as per a normal bet; I dont see how they could charge me more already, when Im using the 1k profit itself, and only ever going to make that 1k back.

Anyway, thanks for answering.