Many customers will be aware of the recent Australian High Court ruling requiring wagering operators to pay a fee based on turnover to accept bets on New South Wales thoroughbred and harness racing. Racing Victoria and Racing Queensland are both also moving to a fee regime based on turnover with Queensland commencing on 1 August 2012 and Victoria expected on 15 August 2012.
Betfair has been reevaluating its pricing structure in the wake of these decisions and it has been determined that regretfully a turnover charge will be applied to a very small group of customers who meet specific criteria. This will ensure Betfair can continue to offer the best wagering product in the market and provide our customers access to all Australian racing content. The charge will come into effect on 30 July 2012.
The charge will only be applied on those markets which Betfair is required to pay a turnover fee. For a complete listing of jurisdictions affected by a turnover fee please refer to this link.
The turnover charge is being applied to customers in exactly the same way as the racing bodies are charging Betfair, however at a smaller rate. Therefore Betfair continues to absorb a portion of the fee it is being required to pay.
The new turnover charge is applicable to a very small group of customers. It is necessary to ensure Betfair can continue to operative viably on turnover charge markets. The turnover charge is aimed at customer activity which generates large volumes of back bets without providing Betfair with the corresponding revenue to cover the charges accrued. Therefore without the charge Betfair would be left with a turnover fee payable to racing bodies but no revenue with which to pay it.
This charge will only apply to customers who during a week meet all three of the below criteria:
have matched back bets on 50 or more markets which Betfair is subject to a turnover fee from a racing body (‘turnover charge markets’);
have matched back bets with an aggregate value of $2000 or greater on turnover charge markets; and
the total commission generated by the customer on turnover charge markets is less than 1.5% of the aggregate value of matched back bets placed by the customer on those markets.
Total commission generated is half of the commission paid plus half of implied commission, calculated by the formula = (commission paid + implied commission) ÷ 2.
Implied commission is 3% of player losses where players make an overall loss on a single market.
Turnover charge markets will be identified in the grey text of the market view.
The turnover charge will be 1.2% of the aggregate value of matched back bets on turnover charge markets.
Betfair is being charged 1.5% of the aggregate value of matched bets by Racing NSW, Harness Racing NSW, Racing Victoria and Racing Queensland. In both Victoria and Queensland this rate increases to 2% for their premium racing months. You can see a current list of the tracks that the charge applies to click here.
The charge will be calculated for the period from each Monday to Sunday (GMT), and will be payable on a retrospective basis. The charge will be debited from a customer’s UK wallet each Wednesday, alongside any applicable premium charge.
The charge will only be incurred for any week when a customer’s betting activity meets the criteria. Please note the charge will not be applicable to any lay bets.
During a weekly cycle, a customer has matched back bets to an aggregate value of $10,000 over 100 NSW and Victorian thoroughbred markets. The customer has $100 in Total Commission generated.
Back bets placed in 50 or more turnover charge markets
75 turnover charge markets
Matched back bets with an aggregate of $2000 or greater on turnover charge markets
$10,000 of matched back bets on turnover charge markets
Total Commission generated on turnover charge markets is less than 1.5% of aggregate matched bets
$100/$10000 = 1%
Turnover Charge payable will be 1.2% of $10,000 = $120.
Customers will be contacted directly by a Betfair representative and informed on the first occasion on which this turnover charge would have been payable.
Customers will also be afforded a one-week ‘grace period’ designed to give them an opportunity to refine their betting habits should they wish to do so. The first notifications to affected customers who have triggered the grace period will be sent the week of August 6, 2012.
A summary report of an individual’s weekly activity will also be available if requested.
Betfair remains committed to providing our customers with the best products and service in the market and the implementation of this turnover charge is imperative to the future sustainability of the business.
Despite this new charge, Betfair’s prices will remain the best of any wagering operator on Australasian racing.
Customers seeking further information on this pricing alteration can call the Aus Betfair helpdesk on 1300 238 324 (9am - 7pm AEST).
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