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Originally Posted by Chrome Prince
Not sure a bout those figures Paul, my commission rate is currently 4.80% and there's no way I'm turning over anywhere near that amount and I don't even use Betfair every week?
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Hi CP,
Let's forget turnover for a the purpose of illustrating the point. I rechecked my figures, so as to ensure that I provide only factual information. Accordingly I have copied and pasted the relevant text directly from the Betfair web site. I have assumed they have it displayed correctly.
1. Betfair charges a Commission on your net winnings on a market. Commission is calculated by multiplying your net winnings by the Market Base Rate. From this we will apply a discount;
2. The size of this discount, or your Discount Rate, is determined by the number of Betfair Points you have accrued on your account;
3. You earn Betfair Points every time you bet on a market. You will earn 1 point for every 10 pence of commission paid (if you have net winnings) or implied commission (if you have a net loss). Implied commission is calculated in exactly the same way as commission but refers to losses rather than winnings. Betfair Points are awarded equally whether you win or lose;
4. For the purpose of calculating Betfair Points your commission or implied commission on a market is rebased to British Pounds at the time of settlement. Your Discount Rate is calculated from your current Betfair Points every week. This occurs at midnight (GMT) every Sunday .....
So the way I read this is:
In order to get a Betfair commission discount you need to earn Betfair Points, which are based on your commission from net winnings or net losses in a market calculated at the same rate. Whether you win $100 or lose $100 you will earn the same number of points. Except your dollars are converted to British pounds for the purposes of the Betfair points calculation.
In order for you to have a commission rate of 4.8% (as you stated) instead of the 6.5% which is the full rate, you must accrue somewhere between 23,000 and 25,999 points PER WEEK as that designates the required 26% discount (6.5 x 0.74= 4.81).
Let's say we use 24,000 points for ease of calculation. In order to earn 24,000 points per week you need to pay 2,400 British Pounds in actual or implied commission. (24,000/10 = 2400). This is because you earn 1 point for every 10 pence of commission paid.
To achieve this based on the FULL 6.5% Market Base Rate your results will need to fall in a RANGE SOMEWHERE BETWEEN Losing (net) -36,923 pounds and winning (net) 36,923 pounds (2400/0.065 = 36,923). At the current exchange to Australian Dollars that RESULT ranges somewhere between a –$62,746 and +$62,746; that's EACH WEEK in order to retain the level of discount which is eroded by the Betfair decay each week. It could be that you break even for the week; which means you paid commission on $31,373 in winnings and implied commission on $31,373 in losses.
The figures above are the resultant (Net) figures and NOT the actual turnover you would have to have in order to pay commission/implied commission on that +-$62,746 range.
It is possible that I am wrong however this comes directly from the Betfair website so I'm not sure how I can be. Perhaps it is that you are looking at your own discount rate which could be 4.8%. In this case you are paying somewhere around 6.18% in actual commission based on a market base rate of 6.5%.