{"id":4509,"date":"2023-08-30T11:37:44","date_gmt":"2023-08-30T11:37:44","guid":{"rendered":"https:\/\/www.newbettingsites.co\/?page_id=4509"},"modified":"2023-09-21T12:45:07","modified_gmt":"2023-09-21T12:45:07","slug":"what-is-the-betfair-premium-charge","status":"publish","type":"page","link":"https:\/\/www.newbettingsites.co\/articles\/what-is-the-betfair-premium-charge\/","title":{"rendered":"What is the Betfair Premium Charge? Do You Have To Pay It?"},"content":{"rendered":"
Betfair is one of the biggest betting companies in the world, largely thanks to the fact that offering peer-to-peer betting services is unique. If you want to place a bet that isn’t just what all of the other bookmakers are offering and you want the odds to be competitive<\/a>, betting on the exchange<\/a> is one of the only things that you can do.<\/p>\n For the company itself, the way that it makes money is by taking a percentage of the winnings from the punter that enjoys success in their bet. The good news is that it provides a nice steady income, but the bad news is that it limits how much money Betfair can make.<\/p>\n The fact that exchanges aren’t exactly huge money makers is why so few companies offer one. For Betfair, therefore, there was always a need to try to find other ways to ensure that their income was competitive. Whilst they moved to introduced a regular sports book, online casino and other products, the exchange was still their biggest income generator and where they felt they could make more money somehow.<\/p>\n In 2023, the Betfair Premium Charge was introduced, which saw the biggest winners charged an extra amount on their winnings that customers weren’t happy about.<\/p>\n When it comes to Betfair, we first need to get our head around how the company makes money generally to understand why it felt the Premium Charge was necessary.<\/p>\n When it was launched at the start of the online betting craze, Betfair was purely an exchange platform. This meant that it acted as a middleman, putting bettors in touch with each other and facilitating their betting in a safe and secure environment. In order to make a profit themselves, they took 5% of the winning bettor’s money, which was a commission taken for playing the role that they did in the process.<\/p>\n In the years that followed, Betfair’s popularity grew and it made plenty of money thanks to its 5% commission fee. It joined forces with Paddy Power<\/a> and eventually it launched a sports book of its own, allowing them to benefit from those that wanted to place bets with them but couldn’t get their heads around how the exchange worked.<\/p>\n This gave the same sort of profit as other bookmakers, but the small margins taken from its most popular platform, the exchange, will still have given those in charge of the companies headaches. It was a finite resource, so how could they improve their take?<\/p>\n Thanks to the way that the exchange worked, some customers were able to make huge profits from others whilst only paying a commission of 5%. Imagine you’ve just won \u00a3100,000, you’ll only need to give Betfair \u00a35,000 and take the other \u00a395,000 home. As a result, Betfair decided that it needed to do something in order to make more money from the successful customers.<\/p>\n What they came up with was the Premier Charge, which they decided would only be payable by those that were making the most money from betting on the exchange, with the following being the rules:<\/p>\n It might be unfair to say that Betfair intentionally made the Premium Charge confusing to understand, but it is definitely true that a lot of people don’t really understand it and have no idea if they are the sort of people that have to pay it.<\/p>\n The Premium Charge isn’t something that it is necessarily all that easy to understand in terms of how it works. In essence, it exists in order to bring the total amount that successful bettors have to pay on their winnings to 20%. That is the simple explanation, but it is worth pointing out that it isn’t really ‘simple’ at all.<\/p>\n How much you’re winning is the dictating factor when it comes to the amount of Premium Charge you’ll need to pay. To add confusion into the discussion, it’s possible that you won’t even have to pay it at all if one win makes up more than 50% of your gross wins.<\/p>\n There is a lifetime allowance of \u00a31,000 in fees, which needs to be paid before any Premium Charge will begin to take effect. In other words, if you’ve been paying 5% of your winnings and the amount that you’ve paid to Betfair in fees for their commission adds up to, say, \u00a3600, you’ll need to pay another \u00a3400 in fees before you need to worry about the Premium Charge.<\/p>\n They will get in touch with you before they charge it, so it won’t be a surprise, and the company itself suggests that only 0.5% of all customers even end up having to pay it in the first place.<\/p>\n If you meet the requirements, you will be charged either the difference between 20% of the gross net wins that you made on the previous week and the total charges that you’ve managed to generate during that week, or the difference between 20% of your gross net wins and the total charges that have been issued to your account during your lifetime as a Betfair customer.<\/p>\n Betfair treats all accounts as though the Premium Charge has been in play since the company launched in 2000, which certainly doesn’t help in terms of clarity around who has to pay the charge.<\/p>\n The simple truth about the Betfair Premium Charge is that it’s confusing. There is no point talking about it and acting as it it is a really easy thing to get your head around, because it isn’t. Picture a work in which you’ve won \u00a31,000 during the week. In isolation, this mans that you’ll have to pay the Betfair Premium Charge, losing \u00a3200. If you’ve already paid 5% commission then that comes down to \u00a3160, as the \u00a340 you paid will be reduced. The \u00a3160 is to take the total amount paid up to 20%, as opposed to just paying 20% outright. The more you win, the higher the figure you need to pay.<\/p>\n If you were to earn \u00a3250,000 or more, for example, you might need to pay as much as 60% on your winnings. The confusion is made worse by the manner in which Betfair treats the commission that you’ve paid. A payment of 5% on your bets is treated as 2.5% of the ‘total charges’ that Betfair issue. At that point, they’ll add charges of 17.5% in order to bring the total amount up to 20%. In accordance with the Betfair Premium Charges rule, though, that actually then comes to 22.5%. The only good news is that, unless you’re making a lot of money out of Betfair, you probably don’t need to worry about the Premium Charge.<\/p>\n As an example, imagine that you’ve made net wins of \u00a316,429.31 from Betfair across the course of your lifetime betting with the company. In order to do that you bet on 3,165 markets and you paid total charges of \u00a34,671.32. That means that you’ll have paid around 28% in total charges, meaning that you will not have to pay the Premium Charge. If you win more and don’t pay large charges, however, you might drop below the 20% mark in total charges paid, meaning that you’ll then be liable to pay the Premium Charge as per Betfair’s terms and conditions on the matter.<\/p>\n Told you it was confusing.<\/p>\n Any bettor worth their salt will obviously want to know what it is that they can do, if anything, to avoid paying the Betfair Premium Charge. The short answer is that you can’t avoid it, presuming you want to keep placing your bets with Betfair and using the exchange.<\/p>\n You could change the style that you use for your betting in order to not win as much money, but that feels like a silly approach if you’re still liable to make more money paying the Premium Charge than you would if you didn’t win enough money to be hit with it in the first place, if that makes sense.<\/p>\n The other thing you need to bear in mind on that front is that Premium Charge avoidance is specifically prohibited in the terms and conditions of Betfair, so if you’re caught trying to get out of paying it then you might find that your account is suspended or even closed down altogether<\/a>. As a result, one of the only ways that you can stop yourself from having to pay the Premium Charge is by placing your bets on a different exchange. The problem with that, of course, is that Betfair accounts for around 80% of the market share of exchange bets, so do you really want to?<\/p>\nUnderstanding Betfair’s Money-Making Method<\/h2>\n
The Premium Charge<\/h2>\n
\n
Explaining the Premium Charge<\/h2>\n
It isn’t A Clear Thing<\/h2>\n
Is There A Way To Avoid Paying It?<\/h2>\n