Betfair - Ask the Managing directors Q&A Session

[Euler]

Here is the twitter feed for questions, not many TBH, but that said I did email mine in. Only so much you can ask in 126 characters!

https://twitter.com/search?q=%40betfair ... d&src=typd

[LeTiss]

Yes, I emailed mine too Peter

However, just looking at the questions on the Twitter feed, it's clear PC is the main topic time & time again

I honestly don't understand, how they can be so oblivious to the serious damage PC has done to their image

[superfrank]

I don't think the guy from the gaming department will be getting many questions. Online casinos are horrible businesses on a par with pay-day lenders when it comes to preying on, and ripping off, vunerable people.

[Euler]

Here is the live link: -

http://community.betfair.com/forum_chat ... betfair-qa

Not very interesting I am afraid. Same questions and same answers.

[andyfuller]

I kept it to just one question. Doubt it will get a response but thought I would put it up for discussion:

Hi,

I made around £* per year from the exchange with a high strike rate. This was a good living. When the Premium Charge (PC) came in I had been on Betfair for a long time so had gradually built up profits over a long time frame and as such was hit by the PC.

When the PC hit I had to pay 60% a week due to my past activity. This meant I now only got to keep £* a year. So for the risk involved I was better off doing something else to make a living.

I know of a person who made £500,000 a year from Betfair before the Premium Charge, they are now paying 60% but it is still worth their while carrying on with Betfair as they still earn £200,000 a year.

So the PC has meant that for many like me the less sophisticated user it is no longer viable to carry on with Betfair while for the really big hitters who are the most sophisticated, they still get to take home a huge chunk of cash each year.

Firstly this seems to me that the PC is hitting the wrong people. The smaller players are being priced out while the big players are able to carry on and pick up the money no longer being made by the smaller players. The really rich get richer.

This has also meant that the 'dream' of making a living from Betfair has gone for many or at least been restricted to £250,000 over your entire lifetime.

Why can't you introduce a more progressive PC so say the first £100,000 per person per year is charged at say 20%, then anything over £100,000 is charged at 80%. This could be done as a yearly rebate, so you carry on with the current pricing or similar then at the end of the year you get a PC rebate. This still means the collection is straight forward.

It keeps the dream alive for everyone, £80,000 a year is a dream for all most everyone, and then the really big hitters are hit really hard and can decide if they want to carry on past the £100,000 mark (or what ever it is set at).

With the current situation, in another 10 years time the numbers falling into the £250,000 bracket will be a lot bigger even if they are making relatively small amounts each year. So your longest serving customers who don't hammer the exchange will be punished and have it made no longer viable to continue while the really big players can carry on taking home their six+ figures each year.

Many thanks for taking the time to respond.

Kind regards,

.

[Euler]

They haven't answered my question. I knew people would ask about PC but they would defend it by saying they spent it on marketing. But if you look there is currently no exchange marketing at all. It's 100% sportsbook.

[Euler]

I tweeted it and they have now answered.

[Euler]

The ironic thing is the reply on twitter came from 'Betfair Sportsbook'

[LeTiss]

Betfair used to ridicule punters for betting with traditional bookies instead of P2P - Isn't embracing them now hypocritical?


Following lots of research, we hear feedback from customers that many don’t have the time to invest in order to understand the Exchange and prefer a simpler product. The Sportsbook appeals to these customers and allows us to introduce them to betting with Betfair. Because we truly believe in the Exchange model, we have developed a mechanic whereby Sportsbook bets are matched directly into the Exchange – that offers the benefit of Exchange value to our Sportsbook customers, whilst supporting liquidity in Exchange markets. The system is currently being trialled on a small number of Sportsbook markets and will be more widely available in the New Year.

They answered one of my questions, but gave a typical watered down, shitty response

[andyfuller]

It is so far very much the corporate lines being trotted out. The only thing of note is that they have publicly acknowledged that the exchange concept has failed in beating the bookmakers as they said it would many years ago and that they have failed to make the exchange simple to use and as such rather than trying to make it easier to use have opened up a sports book.

Bert et all must be choking on their dinners!

[LeTiss]

The ironic thing is the reply on twitter came from 'Betfair Sportsbook'

My question came from 'Betfair Customer Services'

[Euler]

It is so far very much the corporate lines being trotted out. The only thing of note is that they have publicly acknowledged that the exchange concept has failed in beating the bookmakers as they said it would many years ago and that they have failed to make the exchange simple to use and as such rather than trying to make it easier to use have opened up a sports book.

Bert et all must be choking on their dinners!

I think your suggestion is a perfectly good one for the long term health of the exchange. Its similar to my suggestion to them on making the PC more acceptable in the mix of things but still achieving a broader objective. I think it will continue to damage their business long term and still not solve the core issue.

[Euler]

Do you bet on your markets? If not, why not, knowing that you have a profile of you client's bets, you know how the big winners act, putting you in a privileged position to do so...

Betfair does make markets on the Exchange from time to time in order to provide early/extra liquidity, however this is ALWAYS done on equal terms. We categorically do not use privileged information like a specific customer's betting patterns or account information to determine volumes and prices. This is very much a bright line issue and there are no instances where such behaviour would be acceptable.Do you bet on your markets? If not, why not, knowing that you have a profile of you client's bets, you know how the big winners act, putting you in a privileged position to do so...

Betfair does make markets on the Exchange from time to time in order to provide early/extra liquidity, however this is ALWAYS done on equal terms. We categorically do not use privileged information like a specific customer's betting patterns or account information to determine volumes and prices. This is very much a bright line issue and there are no instances where such behaviour would be acceptable.

[andyfuller]

I think your suggestion is a perfectly good one for the long term health of the exchange. Its similar to my suggestion to them on making the PC more acceptable in the mix of things but still achieving a broader objective. I think it will continue to damage their business long term and still not solve the core issue.

I have never understood why they didn't use an idea along my lines. The smaller players would have kept saying how great BF is, would have still made a good amount per year but wouldn't be a huge drain on the exchange while the really big players (sorry Peter )Would still be allowed to make a good amount but probably wouldn't bother with going much beyond that.

They have stated in the past that the small few take the largest % so my idea would leave a lot more in the pot to go around. And assuming they are hot on stopping people having more than one account it would work, most of the current PC payers who use multiple accounts would no longer need to as well.

I struggle to see the downside.

They have said they will respond via Twitter. But I have asked them not to respond with the marketing line and the big winners line, if I make £1 in a year I would only keep 40p, hardly a big winner!

[Euler]

I think it would hurt bigger players less than you imagine. Each year that passes my return on Betfair doesn't grow as fast as my investments, so in % return terms Betfair gets less important each year. I would imagine this is a similar situation to most big users, you can't re-invest into the market so you invest elsewhere and that is compounding at a faster rate, so I'm resigned (in % return terms at least) that Betfair will be less important to me in the future.