The argument put forward is:corbus wrote:so why should Betfair throw me out if I won 100,000 a month? I'd be one that generates a lot of business for them and they'd earn 5000 from my work.
Lets assume you make £100,000 a month every month. So you make £1.2 million a year.
Lets assume you take that £1.2 million out of your Betfair account to spend on nice houses, fast boats and cars
Betfair have earned, to keep it simple, 5% commission = £60,000.
So Betfair now have made £60,000 from you and you have made £1.2 million before commission.
But the next year Betfair need to attract another £1.2 million into the exchange for you to win.
If it costs them £10,000 in say marketing to do this they have made £50,000 from you Net.
But if it costs them £60,000 to do this they make nothing from you.
If it costs them £120,000 to do this, it has actually cost them £60,000 to get the new £1.2 million into the exchange.
So on the face of it you may think you have earned Betfair £60,000 as you paid them that in commission but in fact you have actually cost them £60,000.
Now that is a simplistic view as the costs to Betfair and benefits are not as straight forward as I have made them out to be in the above, but hopefully the explanation helps you understand a bit better.
The ideal world for Betfair is if your £1.2 million stays in the exchange and keeps changing hands, they get 5% each time it changes hands and eventually they get the lot. So it is true Betfair want you to win, but they also want you to lose in equal proportions.
