Betfair Expert Fee Revealed: Surprising Reasons You Might Never Pay

[00:00] So the Betfair Expert Fee has been launched and it was launched to get rid of the Betfair Premium Charge, but also to remove a large number of people that could have possibly fallen into the clutches of the Premium Charge.

[00:15] people sort of worrying about whether they will pay it or not. And some people have grasped the wrong end of the stick in terms of how So I thought it was worth doing a video just to clear that up and

[00:28] Are you going to pay the Betfair Expert Fee?

[00:41] So with the launch of the Betfair Expert Fee, obviously there was a will attempt to cover in this video. over 50 percent of people will no longer pay the premium charge.

[00:57] them will pay significantly less. And when you look at that there are clear reasons why that's the case, But one of the discussions that popped up was, you know, Do Betfair needs to

[01:12] Couldn't they just exist on standard commission? Now, I would love an exchange where you just had a fixed rate of commission and no additional charges, but there has been a flaw within the exchange model

[01:26] for a large number of years where it's clear that a small number of people And you know, not everybody is at that end of the market, but whether the exchange, one of the things that I.

[01:41] I've always been keen to sort of get across. exchange that's completely viable. And by viable, I mean where you're betting against other people, rather

[01:54] than an exchange that has an incredibly low rate of commission, but where And we've seen that divergence within the betting exchange marketplace already. But if Betfair suddenly decided to take the other side of the book.

[02:10] Then of course, there is only going to be one winner in that scenario, because you're back to this typical bookmaker type model. So throughout my career, I've sort of said, well, you know, small levels

[02:24] I'd rather pay a bit more and keep the whole thing intact. You know, you've got to keep people in that pool. But also look at it from a commercial, uh, corporate perspective.

[02:39] The business model needs to work and it needs to be growing and expanding and And I'm not being an apologist here for higher rates and What I'm trying to say to you here is that if we have a viable system,

[02:55] We could talk endlessly about what is the right rate, and whether it's Uh, but exchanges do, in, sort of, fundamentally have this intrinsic

[03:09] problem, um, of the way that, you know, you have winners, you have losers, and those winners, uh, pay a commission, but fundamentally, they And The whole thing has to be viable from one perspective, even if you look

[03:25] at it, um, and I know profit is a dirty word and corporate greed and all of those to come to terms with the fact that the business model has to be viable and

[03:37] and have an impact, because when you lose that, then you could end up back So, I would much prefer if we had an exchange only ecosystem, and a sportsbook

[03:50] only system, and a casino only ecosystem, and they were all separate and stood on their own merits, because then everything becomes a little bit more transparent. I'm not sure that we ever will have that.

[04:03] And when I produce videos, I'm trying to explain to people how good exchanges And, you know, we need to continue to push that message because it's clear that

[04:17] most recreational punters and your average Joe doesn't really understand exchanges. It's important for you. And we have to find a progressive way forward.

[04:32] It's much better than the old mechanism that we had. And I'm glad to be shot of the previous premium charges. the original expert fee video was the bandings because you have three

[04:49] There are no additional fees. That's what takes a huge amount of people out of any particular additional charges. And then you've got 25 to 100, where you pay 20%, and then above

[05:03] 100, 000, you will pay at 40%. start making money, they suddenly have to pay additional fees, whereas When you look at your lifetime P& L, that will influence the

[05:19] Because the important thing to note is if you've been unprofitable in the past or sort of just below break even or something like that, that creates a huge buffer that you will have to eat through before you even get considered

[05:33] So if your lifetime P& L is negative and then you suddenly start making lifetime P& L into positive territory.

[05:45] People just assumed that if they made some money over the course And there's another huge caveat. That means that even if you did make reasonable amounts of money, you may

[06:01] I need to explain it in a bit more depth, which I will do in a second. But let's say that you were a previous customer and you had a paid premium that creates a buffer as well before you start accumulating profit that would

[06:20] So yeah, there were sort of two big caveats there. levels in over the course of a year then you will automatically That's not the case, especially if your lifetime P& L is negative.

[06:37] But also there's one massive thing that occurs here that means that you still It's a little bit difficult to explain but in the next section Even if you do make a certain amount of money over the course of a year, you

[06:50] still may not pay any additional charges. that always seems to catch people out. seriously from those that don't.

[07:04] And I don't mean that in a derogatory way, but I always monitor this, um, on all of my strategies to find out how efficient my strategy is. how that affects what I do within any particular market.

[07:16] but don't freak out because I put it on a spreadsheet so you can see Much easier than attempting to talk to you about it. when they were coming up to that 250, 000 mark, um, in lifetime profits.

[07:35] But a lot of people wouldn't, still wouldn't pay the premium charge, even if Well, it was all down to the rate at which they generated commission. And some people will be going, what, what, what's, what's all this about?

[07:50] Um, and that will explain the way that the exchange ecosystem actually works as opposed to the way that you think it works, because people win every single Well, of course they don't.

[08:04] And so when they think about paying 2 percent commission on a winning bet, that's where their focus is at any one moment in time. They're sort of saying, why should I pay 20 percent when I only pay 2 percent

[08:16] But I can guarantee to you that you almost certainly don't pay 2%. You almost certainly pay commission above 2 percent in the long run. a look at the detail behind this.

[08:33] it's an important contributor and it shows you how efficient you are on the exchange and it influences heavily whether you pay any additional fees or not.

[08:47] Okay. bets, 100 trades, whatever. we win or lose, it's 50 50.

[09:00] And I'm saying that when we win, we win 1, 000, and when we lose, we lose 1, 000. 000, but we also lose 50, 000, and therefore our gross profit is 1, 000.

[09:19] Now, in the process of winning 1, 000 at 2%, We would actually end up So net of commission, we would actually lose slightly overall.

[09:31] So, you know, we haven't achieved a strategy here that has been profitable. commission on the way in as well. So in effect, um, the amount of commission that we generate

[09:45] We've haven't made any profits and yet we've actually, um, paid commission. So, uh, the commission generated is infinite as the spreadsheet suggests here.

[09:58] commission that you generate exceeds the amount of charges Then that will go into a buffer and that buffer will offset any charges in future weeks.

[10:11] So yeah, uh, you don't lose any privileges if you can't make money or you generate a lot of commission, it simply gets offset against future charges. So on the second line here, you can see that we win 51 percent of

[10:26] the time and we lose 49 percent of the time, by definition. And therefore you can see that we win 51, 000 but we lose 49, 000 and therefore But again, of course, we've had to pay 2 percent commission.

[10:42] Which means that obviously we make a net profit of about 1, 000 or just under. And what that actually means is that we have generated overall, um, 1, 122.

[10:57] Now, I'm not going to talk about implied commission here, because implied commission, whole different subject altogether. we've generated is about 56%.

[11:10] Of the amount of money that we actually made in net profit. So on this particular occasion That there will be no additional charges any potential charges So you can see there will be no more charges here.

[11:27] We're only paying commission at two percent Um, but that has generated commission overall as a percentage of our gross profits Of 56 percent and and therefore there is no additional charges to be paid So you can see that

[11:41] the more efficient you are and the bigger you win Um, the less commission a market And that is more likely when the expert fee is going to kick in.

[11:53] However, if your strategy is is just above break even, um, then the commission And as a consequence, it's unlikely that you'll have to pay any So a lot of whether you end up paying the expert fee is going to be down

[12:10] I hope that that has explained that, um, in enough detail and depth for you. of the expert fee and also indicate whether you are likely to pay it because

[12:26] it's not as simple as saying if you earn this amount in a year then you're going to have to pay 20 percent 40 percent or whatever or none hopefully. that especially if people are trying to give a knee jerk reaction to

[12:41] It's always been the case that the amount of commission that you So if you're a traditional punter, you generate enough commission

[12:53] that you'll probably never fall into these additional fees. And even if you're a trader, if you're just above that break even mark, and you're making, you know, a small percentage of turnover, In

[13:05] profit then it's probably quite likely generating a lot of commission that pay it in that particular occasion. However, you are going to probably end up paying more in fees and

[13:22] may be slightly sort of worse off. But, you know, congratulations on doing so well and having I don't say that lightly because, you know, you're talking to somebody here

[13:36] Um, so yeah, you know, I would prefer not to pay that at all or any charges, but you, you know, you sort of accept that within that process that is

[13:48] There is a forum discussion on the expert fee, so you're welcome to join in there and talk to everybody and compare notes and discuss specific aspects of it.

[14:00] And in fact, James went on and he did a shortlist of all of the those that may not be better off. within those particular categories.

[14:15] on the charges, how they're applied, but also specifically why you may not end up paying any expo fee at all.