Betfair commission structure becoming worse

[kiwi]

From May 29 the commission structure of Betfair is getting worse:
http://promo.betfair.com/news/pc/temp_wv_pc.html

[Pareto]

Yeah, I saw it too. Its bad news, but when you are a monopoly you can do almost anything you want.

[WWTSblows]

As if it wasn't already bad enough

[RickySteve]

Yeah, I saw it too. Its bad news, but when you are a monopoly you can do almost anything you want.

How are they a monopoly?

[sportsfanatic]

How are they a monopoly?

The same way that eBay is a monopoly.

[sportsfanatic]

From May 29 the commission structure of Betfair is getting worse:
http://promo.betfair.com/news/pc/temp_wv_pc.html

This sucks.

[pjesnik24]

I do not play with betfair out of principle. I just hope more and more people will turn to mansion...

[pjesnik24]

mansion has better odds than betfair in 99 % of the cases. However, they do not have all the leagues...

[pjesnik24]

nor the options nor the liquiditi for japanese league for example

[moonbeam]

Average Discount Rate is 8% down with the new dicount table.

what´s comin next?

[nikosgr]

Betfair is by far the biggest exchange in the world, the first thing that came to my mind when i received this mail is that that they are GREEDY.
Mansion is good, no question about it, but betfair has more liquidity, more selections of markets.
Betdaq also is good, but not comparable to Betfair.
Under this situation i will have to re-examine the options that i have to move my activities (or part of them) to Betdaq or Mansion.

[The HG]

I wouldn't be too concerned about it in the long run. Another way that exchanges are superior to books is that it should be relatively easy for an exchange with a low commission rate to take over the market share of a leading exchange that decides to get greedy with its rates.

[moonbeam]

for me as a small bettor with roundabout 20.000 betfair points, it´s 30-40 Euro more to pay per week with the new commisson rate.

I guess that´s greedy.

[tribet]

I wouldn't be too concerned about it in the long run. Another way that exchanges are superior to books is that it should be relatively easy for an exchange with a low commission rate to take over the market share of a leading exchange that decides to get greedy with its rates.

Unfortunately I think that is the wrong way round and the exchange with the high rates is going to takeover completely the lower rate exchange.

[acw]

I do not think it is greed. They just simply try to maximise their profit. In my opinion they need to get rid of the traders, but yet again they will be hardly effected by it.

[Ganchrow]

I wouldn't be too concerned about it in the long run. Another way that exchanges are superior to books is that it should be relatively easy for an exchange with a low commission rate to take over the market share of a leading exchange that decides to get greedy with its rates.

I have to disagree with you here.

To service their clientèle, exchanges are heavily dependent on liquidity, the lack of which serves as a barrier to entry. There's no value to being the first bettor to play at an exchange, but rather there's incentive to wait for others to start playing there before making a deposit.

As such if a particular exchange has broad market penetration, then even with high commission rates, it's relatively difficult for a newer, lower cost exchange to take market share away from it.

[The HG]

Unfortunately I think that is the wrong way round and the exchange with the high rates is going to takeover completely the lower rate exchange.

You mean because an exchange's liquidity is a much more valuable factor than its commission rate, so the big ones will tend to get bigger since their size increases their attractiveness.

Yes that's true, but if things start out with a bunch of viable exchanges always in competition, and it's relatively easy to take out and deposit funds from each, I would think there would be a built-in mechanism, assuming the market is big enough, whereby an exchange's deposits would be directly related to its size and commissions, all else being equal.

Seems like we're getting into game theory, or something close to it. There's probably a tipping point where the market could get so small that all the money would go to only one exchange, because any increase or loss in liquidity at all would be very significant.

I'm probably not thinking it through fully.

But for practical purposes, in this instance, would the liquidity limitations of the other exchanges affect most people such that they'd rather just eat the higher fees?

[The HG]

I have to disagree with you here.

To service their clientèle, exchanges are heavily dependent on liquidity, the lack of which serves as a barrier to entry. There's no value to being the first bettor to play at an exchange, but rather there's incentive to wait for others to start playing there before making a deposit.

As such if a particular exchange has broad market penetration, then even with high commission rates, it's relatively difficult for a newer, lower cost exchange to take market share away from it.

Yes I was just writing the above post about this, I didn't explain what I meant fully.

[The HG]

I guess what I was thinking was that if the system starts out with a bunch of roughly equally viable exchanges, and the market stays big enough to keep them all going, the size of the market itself would keep any one from getting too big, unless there were a conscious effort to do so, or an external factor such as a software problem or whatever. That if the liquidity of each exchange stays above the level needed to satisfy most players, that at that point liquidity actually becomes a non-issue. For example, let's say there were 2 exchanges, one where you could bet 10 million on any game, and another where you could bet 20 million. Would that difference in liquidity make any difference at all?

[nikosgr]

I suppose that Betfair has a big percentage of its volume in soccer games.
In most of their games (big leagues) you can place bets of 300-100000 euros at once.
At the very same time, Mansion and Betdaq can take bets of max 1000-3000 euros (in the same game and outcome of course)
The diference in liquidity is huge.I dont see how other exchanges could compete with Betfair.
Also, let me stress that exchanges love traders-arbers...cause they offer big profits from comissions.

[The HG]

That's what I was getting at nikos. If there are enough viable exchanges to begin with, and the market stays big enough, it seems as though there's a built-in mechanism to keep any one from getting too big and exploiting it.

For instance, right now, everyone whose needs could be roughly equally well served by the other exchanges would presumably move most of their funds to the other exchanges. And then that increased liquidity at the other exchanges would then spur the next highest rung of players to switch more of their funds over, because their needs would then be better met by the exchanges with favorable fee schedules. And then their money would create liquidity for the rung of players above them, and so on and so on, until eventually most of the money would go out of Betfair unless they reduced their fees.

It's like kindling for a fire. As long as there is enough liquidity and variability in other exchanges to get a critical mass of people to switch over if one exchange decides to try to leverage its market share with higher fees, it seems to me things would rather quickly fix themselves.

The one problem with exchanges is that, unlike books, people's beliefs about reality become self-fulfilling prophecies. I get the sense that people still don't use exchanges as much as they should, because they don't know enough about the process, which is not complicated once you look at it.

Ultimately, exchange ratings could be even more important than sportsbook ratings, for exactly that reason of self-fulfilling prophecy and the value of commission/liquidity info. A good book is a good book and a bad book is a bad book, regardless of what people think of it (for the most part). But with exchanges, an exchange becomes better if people think it's good, and worse if people think it's bad. So educating people about the "good" exchanges and the "bad" exchanges helps everyone, not just the people learning which exchanges they should use.

[tribet]

You mean because an exchange's liquidity is a much more valuable factor than its commission rate, so the big ones will tend to get bigger since their size increases their attractiveness.

Yes that's true, but if things start out with a bunch of viable exchanges always in competition, and it's relatively easy to take out and deposit funds from each, I would think there would be a built-in mechanism, assuming the market is big enough, whereby an exchange's deposits would be directly related to its size and commissions, all else being equal.

Seems like we're getting into game theory, or something close to it. There's probably a tipping point where the market could get so small that all the money would go to only one exchange, because any increase or loss in liquidity at all would be very significant.

I'm probably not thinking it through fully.

But for practical purposes, in this instance, would the liquidity limitations of the other exchanges affect most people such that they'd rather just eat the higher fees?

I believe Betfair may takeover Betdaq which will give them nearly all the liquidity market,it looks more likely now they have put their rates up as there is little competition.

[RickySteve]

I wouldn't be too concerned about it in the long run. Another way that exchanges are superior to books is that it should be relatively easy for an exchange with a low commission rate to take over the market share of a leading exchange that decides to get greedy with its rates.

Yep. Just look at how WSEX has dominated the poker market.

[acw]

For the Ganchrows,

Did you guys ever notice that BetFair on their soccer markets has a market called Total Goals and (many) Over/Under markets that both are at different commission rates while you are betting on the same?

Also have a look at this thread:


You guys are trying to come up with logical explanations for what should happen, but trust me in the gambling world it does not.

[kiwi]

What about the idea to 'punish' Betfair in a way that many people withdraw money at the same time at May 29 to show them they cannot do whatever they like? One could try to organize such a 'protest' in many betting forums... If many people would to it at the same time maybe this could affect Betfair (but of course I know they have many many users and probably would not notice it - it's just an idea).

[acw]

Listen kiwi,

After I won a gross 500,000 Pounds on BetFair of which 400,000 Pounds was paid in commissions, so only 100,000 Pounds was left over for myself, I thought enough is enough.
The are other issues (mainly banking) why I leave them for what they are too. A complete waste of time.

By the way is all ok between you and the Greek now?

[kiwi]

By the way is all ok between you and the Greek now?

Yes, thanks for asking, the case is solved:

http://forum.sbrforum.com/players-talk/31362-thegreek-finally-graded-my-table-tennis-wager.html

Two days ago I found a really great table tennis arb between TheGreek and Centrebet again, but even if there was no obvious line error (double checked) I didn't dare to play it.

[nikosgr]

I will withdraw a big amount of money from BF on May 29, moving part of my activities to mansion and Betdaq.
Betfair can take my withdrawal as a protest also.
Indeed Betfair offered many things to the industry, but for the time being...i want to try something else.

[greedy]

Their Forum Moderator treats clients with contempt so it’s hardly surprising that their Management should do the same. That's why I took my business elsewhere.