Commission Impossible

I saw this excellent post by "armida" today which just about sums up the issue Betfair are going to face going forward. Trying to recruit punters to Betfair's new exchange model is going to prove no mean feat. By constrast, simpler mechanisms are much easier to understand. If Betfair are going to introduce this new model to attract more customers, I think they have a problem.

----------

SEPTEMBER 2001

Joe Punter: Twenty tenners please.

Betfair Bob: You would be better off putting that on Betfair rather than this betting shop, It could be as much as 40 on there, less 5% comm, gives you over 37/1.

Joe Punter: Really? I will have a look at that.

SEPTEMBER 2008

Joe Punter: Twenty tenners please.

Betfair Bob: You would be better off putting that on Betfair, it could be as much as 40 on there, less your commission, which is your net winnings multiplied by the Market Base Rate, after your Discount Rate is converted from your Betfair Points Total, and applied to the Market Base Rate, unless of course, you have taken a Betfair Holiday, when your Betfair Points will not be credited, so your Discount Rate will remain the same, but you won't be subject to a 15% decay in your Points Total at the end of the week.

However, if you win you may qualify for the Premium Charge of up to 22.5% which is dependant on your forthcoming weekly profit in relation to the commission payable for that week or on a rolling 60 week average, which is when your commission and implied commission is calculated and divided by two, which is ok because it can be offset against the £1000 Premium Charge allowance, and at the end of the week you find out what price you got.

Joe Punter: Twenty tenners please.