Betfair commission structure becoming worse

kiwi · 05-23-2007, 07:11 PM

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

Pareto · 05-23-2007, 07:14 PM

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

WWTSblows · 05-23-2007, 08:39 PM

As if it wasn't already bad enough

RickySteve · 05-24-2007, 02:42 AM

Quote:

Originally Posted by Pareto

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 · 05-24-2007, 03:04 AM

Quote:

Originally Posted by RickySteve

How are they a monopoly?

The same way that eBay is a monopoly.

sportsfanatic · 05-24-2007, 03:07 AM

Quote:

Originally Posted by kiwi

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

This sucks.

pjesnik24 · 05-24-2007, 03:08 AM

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

pjesnik24 · 05-24-2007, 03:09 AM

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

pjesnik24 · 05-24-2007, 03:23 AM

nor the options nor the liquiditi for japanese league for example

moonbeam · 05-24-2007, 06:49 AM

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

what´s comin next?

nikosgr · 05-24-2007, 07:02 AM

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 · 05-24-2007, 07:33 AM

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 · 05-24-2007, 08:20 AM

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 · 05-24-2007, 10:08 AM

Quote:

Originally Posted by Ganchrow 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.

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 · 05-24-2007, 10:40 AM

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 · 05-24-2007, 10:52 AM

Quote:

Originally Posted by Ganchrow 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.

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 · 05-24-2007, 10:55 AM

Quote:

Originally Posted by tribet

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?