[Dr.Gonzo]

Yes, it's bullshit. But what can be done to offset this?

Obviously one can try and arbitrage the account into a loss to offset the 20% rort. This comes with it's own problems needing the results to fall the right way.

I'm open to any other strategies.

Should BetFair only be used as a trading room and avoid betting there?

I'm not really sure.

Any advice will be appreciated.

Bunch of thieves running the exchange I'm afraid

[Ace_of_Spades]

I use Betfair and have heard of this before. But, when and how will they be using this? 20% is just criminal and surely its only used for people who put huge amounts on, i really can't understand such a high fee.

[Ace_of_Spades]

I got this from them.

Your account has not incurred Premium Charges. If you become eligible to incur Premium Charges in the future, we will contact you before any charges are paid. If you require any further assistance, please contact premiumcharge@betfair.com.

[Ace_of_Spades]

In other words, if you have alot, and i mean a lot, then you will get charged.

[Dr.Gonzo]

6) Premium Charges

In addition to the other charges detailed above, a small number (less than 0.5%) of our most successful customers will incur Premium Charges.

Please note that if you become eligible to incur Premium Charges, we will contact you before any charges are paid.

Calculating Potential Charges

Each week Betfair will calculate your ‘gross profits’* made, and your ‘total charges’** generated over the lifetime of your account. The details of these calculations are explained below.

You’ll only be considered for the Premium Charge if your account is in profit and only if the total charges generated since joining Betfair are less than 20% of your gross profits.

The vast majority of customers, and even the majority of those whose betting on Betfair is profitable since they joined, do not meet both these conditions and will not incur the Premium Charge.

While those conditions accurately describe our most successful customers, they might also apply to new customers who have only bet in a few markets, or those whose accounts are in profit because of a significant big win. To ensure that those accounts are not inadvertently charged, we’ve added two further conditions: any single win that constitutes more than 50% of lifetime gross profits will be excluded from the calculation, and customers will only be considered for the Premium Charge after they have bet in more than 250 markets.

Each customer will also have a £1,000 allowance against the Premium Charge. This means that every customer considered for the Premium Charge will be exempted from the first £1,000 of the charge incurred.

Please note that for the purposes of calculating the charge we will assume that the charge has been in place since Betfair launched in June 2000. This means that we will consider all customers to have generated charges equal to at least 20% of lifetime gross profits as of the 12th October 2009. However, this also means that for some customers, some or all of the £1,000 allowance against the charge will have been used prior to 12th October 2009 in order to offset hypothetical charges paid. Assuming hypothetical charges, less allowance, had been paid prior to introduction of the charge has the effect of reducing the amount that customers would typically incur.

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 generated during the week; and
• The difference between 20% of gross profits and the total charges generated during the lifetime of the account.

This means that customers will never be faced with a Premium Charge that is more than 20% of their gross profits for the previous week.

Please note that the second of the two calculations set out above can only ever reduce the Premium Charge and will apply on the rare occasion that the difference between 20% of gross profits and the total charges generated during the lifetime of the account is less than the same calculation for the previous week.

Premium Charges will be deducted from customer accounts weekly (on Wednesdays) in relation to the previous week’s activity (Monday to Sunday).

Accounts that relate to one person, entity, API subscription or a Master Account with related Sub- accounts (Trading version only) are treated as one customer for the purposes of calculating Premium Charges. Note that no Betfair points will accrue for Premium Charges.

*By ‘gross profits’ we mean the amounts won, excluding total charges, less the amounts lost, on all Betfair markets.

**By ‘total charges’ we mean all commission generated by Betfair as a result of your betting plus any Premium Charges you’ve incurred. ‘Commission generated’ includes the commission paid on winnings, but also the commission that Betfair makes from the other customers who win in markets in which you’ve lost, which we call ‘implied commission’. When you win, Betfair collects commission at your rate of commission, but when you lose, the commission collected by Betfair from the winners is at their rate. So we’ll determine the commission generated by your betting activity to be:

Commission generated = (Commission + Implied Commission) ÷ 2

where

Implied Commission = market losses x 3%

We divide by 2 because otherwise we’d be counting each pound of commission twice.

Premium Charge Summary

You will only be considered for the Premium Charge if, over the lifetime of your account, you satisfy the following criteria:

• Your account is in profit;
• Your total charges generated 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 lifetime of your account will be excluded from the calculation; and
• Each customer will have a lifetime 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 generated during the week; and
• The difference between 20% of gross profits and the total charges generated during the lifetime of the account.

Examples

Example 1

You have won gross profits of £10,000 since joining Betfair 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 to date although you have fully used up your 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 since joining Betfair having bet in 320 markets. You have generated £1,050 in commission and paid no Premium Charge to date.

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 since joining Betfair 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 since joining Betfair, 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.

[Dr.Gonzo]

The 0.5% range is complete bullshit and everyone knows it.