Betfair premium charge & earnings soar
As we are all aware now, Betfair pleaded poverty and an imbalanced business model again yesterday, when announcing another new charge. This time hitting consistent earners for up to 60% of their profits. We heard the similar stories for data charges, transaction charges and the premium charge part one and all the other various amendments over the years to their charge structure.
This didn’t stop them from announcing record revenue and earnings a few hours later. Earnings per share are up 56.2% on the year before. So on the face of it, it looks like profitability isn’t a problem. See the full announcement here: –
https://corporate.betfair.com/media/press-releases/2011/2011-06-29.aspx
Given the apathetic response to the first premium charge I always guessed that Betfair would go for an increase at some point. The thing I didn’t guess was that it would triple! I pencilled in a worst case scenario of 50% but never thought a figure above that was feasible, rational or viable. It seems I was wrong. It remains to be seen what impact this will have on Betfair’s ‘We like winners’ stance.
The curious thing about this new charge is that it makes sense, at 60%, for me to teach others how to do it and not to do it myself. This doesn’t really solve Betfair’s ‘problem’ if they are concerned with the cost of servicing my account? It also means if I can earn 40% of my Betfair total on Betdaq then I should switch, and this is perfectly possible to do.
On the positive side Betfair just confirmed by imposing this charge who are the most successful ever users of Betfair. So I should be pleased with that as I am in that group. It also means that increased competition in the market is now almost a nailed on certainty, which we should all welcome.
At the lower levels of the market there is still room for newbies and aspiring super users. Unfortunately it is now unlikely they will reach the same heights as people that have gone before them, but there is still plenty of opportunity there. You will just have to stop when you get to £250k!
Category: Betfair
