Betfair bosses deny being 'too greedy'
SENIOR management at Betfair denied accusations on Wednesday evening that they were being "too greedy" by introducing a premium charge on their most successful clients.
News that the dominant betting exchange were set to bring in a new charging formula, which will result in certain holders ofaccounts in profit over a 60-week period paying a minimum 20 per cent commission, was greeted angrily by dozens of the exchange's users after it was announced late on Monday.
While Betfair were unwilling to make any public comment on Wednesday, chief executive David Yu, Mathias Entenmann, managing director for the UK and Ireland, corporate affairs managing director Mark Davies, and Tony Clare, head of strategic initiatives, took part in an hour-long question-and-answer session on the exchange's forum on Wednesday.
A number of contributors to the thread were vociferous in their opposition. In response to the accusation that the new charges are driven by greed, the four-man panel responded: "We don't think so.
"We balance the demands of all stakeholders in the business: customers, employees, shareholders and industries which derive a percentage of our profit, like the racing industry.
"Our profit margins are not excessive and our profits are a fraction of those of other large gambling companies."
Betfair again reiterated "the likelihood of a ‘normal' sports punter qualifying for this charge is close to zero - even if he or she has a very positive ratio of wins versus losses".
They added that the levy, to which Betfair's contributions have been a bone of contention with other bookmakers and industry factions, is set to benefit from the new charge, with the racing industry getting ten per cent "before we take any of the money from the premium charge and do anything with it".
Although no figures are available as to how many of Betfair's customers will be subject to the new charge, with the exchange claiming to have up to 500,000 active users, it is not expected to exceed 2,500 account holders.
News of the changes to the commission system was poorly received by management and customers at the Elitebet Trading Centre in Highgate, London, some of whom anticipate being out of pocket when the premium charge is introduced on September 22.
In-running manager Ming Wong said: "The implied commission system - introduced without precedent and backdated 60 weeks - suddenly introduces a previously unmentioned element into the equation for calculating commission paid.
"For every winning punter, the very nature of implied commission means they will not even be given credit for the commission they have actually paid. On most accounts affected, this mathematical sleight of hand will cost thousands over the course of a year.
"The idea that this change affects only traders and those who use bots is a fallacy. It affects virtually every in-running player who makes a consistent profit, and a significant number of pre-race players.
"Betfair appear to be dictating to its customers what sort of ‘winning' punters they want. Rollercoaster punters who turn over fortunes in a frenzy and make a tiny return on investment are welcome. More considered punters who lower their risk are targeted directly by this charge. This separation is completely against the ethos of Betfair."
One of Elitebet shop's customers, who wished to remain anonymous, added: "The calculations are fundamentally flawed and the only resolution I can see is a mass exodus of clients to another betting exchange. It is yet another example of a company monopolising the market and being overwhelmed with greed and the desire for yet more profit.
"Monday was a dark day for Betfair and the betting industry as a whole."
Rival exchange WBX on Wednesday reported a "high sign-up and enquiry rate" following Betfair's announcement.
Public relations manager Iain Turner said: "At WBX we understand that if you are lucky enough to hit a winning streak you don't want to be punished by paying even more commission."