Betfair premium charge explained by former employee

If you are a long term winning Betfair customer there is every reason to worry about the premium charge. It is a greedy money grab and it can ruin your betting career.

Betfair used to be an innovative betting company that stuck it to the “greedy sportsbooks” then as they grew bigger and bigger they started to hire people with backgrounds in banking and finance for the top jobs and these executives now run Betfair more like a finance company than part of the betting community.

The natural conclusion to this was Betfair becoming a publicly traded company. Now if Betfair make 100 million dollars profit in a year they would consider that a bad thing because they made 110 million dollars profit last year so share prices would fall. Considering 100 million dollars profit a year, based on a no risk model, to be a bad thing is the definition of greedy but this is the mentality of most publicly traded companies.

What would a bank do if a segment of customers gets a lot of value out of the product but pay relatively less fees and charges than other customers, and the bank has a monopoly on the product? A bank would raise the fees and charges on these customers and make sure they are so complicated most customers can’t understand them. This is exactly the mentality Betfair applied to its long term winning customers by slapping them with the premium charge.

The premium charge has been a public relations disaster for Betfair. It has made the customers that loved Betfair and were their best source of positive word of mouth become Betfair’s worst source of negative word of mouth.

To find out how close you are to having to pay the premium charge try to view your premium charge portal or reports. To make it difficult Betfair regularly changes where to access this information; first check your my account section and if you can’t find it email support.

How the premium charge works

If you have

  • Bet on more than 250 markets.
  • Are in profit over the life of your account.
  • Have paid less than 20% of your lifetime profit in “total charges”.

You are eligible to pay the premium charge at the end of any profitable week in which you paid less than 20% of profit in “total charges”. The amount of premium charge you have to pay will be enough to bring you up to 20% of profit for that week. It is automatically deducted from your account balance.

  • Don’t count any win that accounts for more than 50% of your lifetime profit.
  • You have a £1000 premium charge allowance which means you don’t have to pay the first £1000 in premium charge even after you meet the criteria.
  • Your first week of premium charge is reversed.

Confused? You’re supposed to be, that’s part of the strategy. It keeps getting more complicated to make sure no one except the banking and finance industry types who implemented the charge can understand it.

One example of how sneaky and insidious the premium charge is is that if you win all your bets in a week and pay 5% commission Betfair will treat it as if you paid 2.5 % “total charges” and make you pay another 17.5% premium charge bringing you to 22.5% which Betfair will say is 20% according to the premium charge rules.

Betfair try to rationalize this by saying if you lost bets they would have applied 2.5% implied commission toward “total charges” even though you actually pay no commision on losing bets. This does not stand up because the premium charge is by definition for winning customers so the implied commission and “total charges” malarkey is just a condition to generate more premium charge and to make it more complicated and confusing.

More details at Betfair’s official terms and conditions.

Let’s look at the above criteria against my lifetime stats in my premium charge portal.

my-premium-charge

You can see I have bet in 2944 markets which is more than 250. Have made £15,382.41 lifetime profit which is more than 0. But I have paid £3,414.04 in total charges which is more than 20% of my lifetime profit so for now I don’t have to pay the premium charge.

What to do about it

In the past I was eligible for the premium charge and used £645.06 of my £1000 premium charge allowance leaving £354.94 as you can see in the above image. A serious bettor does a lot of soul searching in the premium charge allowance period especially someone who had loved and supported Betfair as much as I did.

You might try to change your betting style or make special bets to get your total charges over the 20% threshold. I advise against this for 2 reasons

1. Profitable sports betting is a game of very small margins. If you have found a way to be profitable in the long term any change to your betting to try to avoid the premium charge has a good chance of making you unprofitable.
2. Premium charge avoidance is specifically prohibited in Betfair’s terms and conditions so the profit police will get you anyway.

What you should do is reevaluate other places to bet. I did and discovered bitcoin betting; boy did Betfair do me a favour there! If you are about to have to pay premium charge then the best bitcoin sportsbooks will more than replace Betfair.

The odds are good and the websites and customer experience’ are brilliant. You get to bet anonymously from anywhere in the world, you get free and instant deposits and withdrawals of any amount 24/7 and no premium charge!

If you want a direct replacement for Betfair BetBTC (review) closely copies Betfair’s model. Fairlay (review) is another good bitcoin betting exchange with even better odds.

The premium charge is not going away until bitcoin operators get major traction in the market. Betfair have already taken the huge negative public relations hit and now they won’t want to lose the revenue for the effect it would have on the share price. So rather than try to fight it just move to bitcoin land, it’s better over here.

Happy punting!

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35 Comments

  1. stefan 4 years ago

    I received an email from Betfair today with subject Premium Charge and I immediately stop betting.

    I want to ask if I will be pay any extra commission now if i stopped betting and have apply and than reversal charge today in statement

    here is a screen shot of my portal
    http://imagizer.imageshack.us/a/img835/2048/tjr2.png

    thanks

    • Author
      James Canning 4 years ago

      Hi Stefan, Well done for being a long term profitable bettor, it’s not easy but it is possible!

      The first week’s premium charge is reversed. I gather that has already happened with you so now you will be paying 20% or more of your weekly profit to the premium charge. I advise you to keep betting normally for at least a few weeks to see how much it will affect your bottom line. If it affects you too much check out the high ranked sportsbooks on this site.

      Good luck!

  2. Jack 4 years ago

    I back/lay horses and bet in running. I’ve been robbed of several hundred K by the PC….it’s nearly impossible not to get hammered if you have a winning week. I moved to Betdaq a few months ago and I’ve noticed the liquidity has picked up pre-race and in-running. I’ll be a happy man once Betfair let the monopoly slip through their grimy fingers. I suggest people on the PC looking for an out, take a look at Betdaq…things are picking up, and like a snowball rolling down a mountain, it’s just a matter of gaining momentum…do your part to drive a stake through Betfair.

  3. John 3 years ago

    Betfair have us by the balls. They have the first mover advantage.

    It is such a great platform and that’s what makes so many of us annoyed.

    Betfair operates in many countries. How many does Betdaq operate in? Certainly not Australia/NZ. So they don’t have scale and may never have.

    I tried using other bookmakers to try and make losses on Betfair by laying opposite bet. Unfortunately my betfair bets kept winning, which means I lose more via PC!!

  4. Brian 3 years ago

    Good article and very nicely explained.

    It’s amazing how many casual punters who aren’t even making a profit yet complain about the premium charge when they don’t understand how it works and it is in fact a pretty fair system.

    I’m surprised Betfair themselves haven’t taken the time to address all the negativity by promoting an article similar to this one.

  5. Gary 3 years ago

    Hello James,

    Do you know if the betfair premium charge includes just bets on the exchange.
    Are bets on the betfair sportsbook excluded from premium charge ?

    Regards
    Gary

    • Author
      James Canning 3 years ago

      Hi Gary, the premium charge is only related to bets on the exchange. Any other betfair products like sportsbook or poker are not included.

  6. Richard 3 years ago

    Can you tell me if the premium rate rules apply to SP bets?

    Regards

    Richard

    • Author
      James Canning 3 years ago

      Hi Richard, If you mean where you can select starting price on the exchange then yes all best on the exchange are eligible for the premium charge. If you mean the fixed odds sportsbook then no, those are not related to the premium charge.

  7. Dave 3 years ago

    Hi could you tell me if the premium charge is taken from winnings on multiples?. If not then i’ve noticed you can bet singles in the multi bets page on betfair and as you said earlier that SP bets on betfair are taken into account for the PC i thought maybe this might be a way around it.
    Thanks.

    • Author
      James Canning 3 years ago

      Hi Dave, it’s true that such bets would avoid the premium charge but they also lose all the advantages of exchange bets such as the better odds and trading functions like green booking.

  8. Steven1212 3 years ago

    Hello James,

    Can you explain what is cloud bet? I do not understand the bit coins…
    Is there any limit on the bet you can place, or can I choose to place a bet of 100k on a champions league game for example?

    Cheers

  9. Martin Baker 3 years ago

    Hi James

    Where does the £250,000 come in and why do some people pay up to 60% PC?

    Also sorry to be a bit dim but what is the gross profits ratio?

    Cheers
    Martin

  10. soupnazipunter 3 years ago

    So i am a punter.
    I use Betfair because better odds, but i´m quite sucessfull and i was thinking moving to Malta to have a legal situtation.
    But somebody spoke to me about premium charges.
    Has a punter my sistem takes advantage of the cashout possibility but i don´t do trading. I usually have losses but in the end of the month i always have profit.
    In the future if i continue to improve and start doing bets with more money am i in the risk to suffer from premium charges?

    Best Regards

    • Author
      James Canning 3 years ago

      Yes soupnazipunter I am afraid so. I recommend you have a try at betting with bitcoin, then no site can limit you or charge you for winning too much. For more information just browse around this website 🙂

  11. Janis 2 years ago

    How can you know how many markets have you bet on?

    • Author
      James Canning 2 years ago

      Hi Janis, You have to view your premium charge portal by clicking to it from your my accounts page. If you can’t find it you will have to ask support.

  12. Smiffy 2 years ago

    James can you cash out on the bit coin betting sites. I make money by trading not betting. The cloud bet sites are useless to me if I can’t lay as well as back.

    • Author
      James Canning 2 years ago

      Hi smiffy. The two bitcoin betting exchange where you can trade for a greenbook are Fairlay and BetBTC (review). They are kind of copies of Betfair actually. Goodluck 🙂

  13. Jarjar 2 years ago

    HI James,

    Using your link to check the lifetime P/L, can i double check a few things,

    As of now its saying that my %of total commission is 10%, and i have inccured a maximum possible PC of £700. And its saying my remaining allowance is £300. Does that mean once i earn another £300 of profit in bets on exchange, i’ll be eligible to the PC charges as of then? And its a lifetime allowance?

    Jar

    • Author
      James Canning 2 years ago

      Hi Jarjar, That means you have another £300 of premium charge allowance before any premium charge actually gets taken out of your balance. That is a lifetime allowance.

  14. Hockey Nut 2 years ago

    Even scarier than the Betfair premium charge, is Betfair simply seizing all or most of your balance for suspicion of “Premium Charge Evasion” for having a “Single Betting Strategy” which THEY deem too similar to accounts THEY decide to link you to.

    This can happen even if your account has been idle for months and presumably one or more other people start betting successfully within similar markets or using similar software. The exact reasons for why Betfair chooses to link your account are not disclosed. Word to the wise: if you’re betting successfully on Betfair, either move to Betdaq or the alternatives mentioned above or keep your balance low so there’s less to seize if they unilaterally decide your betting is too similar to someone else.

    I imagine its probably prudent to never suggest using Betfair to friends or family as well. It’s the only company I can think of where positive word of mouth might burn you. Never help anyone trade on Betfair by sharing software, code etc. to interact with their API. Never let a friend login to your Betfair account from your place and vise-versa as I imagine they track IPs as well.

  15. LenMuller 2 years ago

    Thanks for the article James – just found your site.
    Tried the Fairlay site and its blocked to UK IP addresses.
    Any way we can find out details about this site or how we access the platform to bet/trade in the UK?

    thanks
    Len

  16. Hockey Nut 2 years ago

    One thing I’ve been wondering, but can’t seem to get an answer to, is whether Betfair shares both premium charges and commissions with tracks.

    If I’m a successful horseplayer and generate 100k in commissions, presumably that commission is shared with the people putting on the show.

    If on the other hand, I bet a lot, win a lot, and my commission is discounted to say 40k, but I wind up paying 60k in premium charges, does Betfair share the 60k in premium charges it took from my successful horse racing bets with tracks and horsemen?

    If the answer is no, it would also help explain the convoluted system of commissions/betfair points/discounts/premium charges etc. etc.

  17. jamie 2 years ago

    Why are people using them who do they think they are ?
    I use bet365 and never have anything like this basically if you win they want some of it back!?!
    Cant believe people actually use them scamming everyone.
    Theres plenty of other betting sites that dont charge you commision and premium charges thats just ridiculas.

    • Joe 2 years ago

      Jamie it’s only relevant to the exchange not the sports book so can’t compare to bet365 williamhill etc.

      On a separate note these other sites you mention the max bet seems to be quite low doesn’t it?

  18. eric 2 years ago

    Hi,
    thanks for the explanation
    The link (https://account.betfair.com/regpay-myaccount/premiumcharge/summary.html) does not work.
    Why?
    there is an alternative link?

    • Author
      James Canning 2 years ago

      Thanks Eric, Betfair have changed the location of the portal multiple times with no redirect or notification, just to make things more difficult for us. Look around your my account section and if you can’t find it ask support.

  19. Rik Heron 1 year ago

    Will they balance it against a negative balance on the sportsbook? or will they talk shit and say its total profit/loss on exchange only?

    • Author
      James Canning 1 year ago

      Hi Rik, Premium charge is for the exchange only, no sportsbook, casino, poker or other wins or losses are taken into account.

  20. Harry 7 months ago

    Hi would I be able to bet with cloudbet if I live in the UK ? I just want to find a place where I can stake 1k+ without getting resticted/banned or given a premium charge

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