As you know by now, Betfair isn’t a bookmaker and doesn’t take bets: it’s an exchange which facilitates bets between punters.
It’s not a community service though… they get a cut too!
Commission base rate
Betfair’s own revenue comes in the form of commission, which is charged on winning bets. Each market has a base rate: this is a percentage which is deducted from any profit on winning bets.
An important point to remember is that although commission on your profits may seem like an additional cost that only applies to Betfair, in reality you pay commission on your bets with any bookmaker: they just build their cut into your price.
When a market is settled, any winnings accrue to your Betfair wallet, and commission on those winnings is deducted.
There is no commission payable on losing bets: as Betfair is a betting exchange, each bet has a winner and a loser on either side of the wager. The winner pays the commission.
The vast majority of Betfair markets worldwide – sports and international racing – have a 5% market base rate. Australian thoroughbred racing is higher (lucky us…), as a result of the higher product fees which racing authorities charge Betfair to operate.
The base rate on racing in New South Wales and Western Australia is 8%, whilst all other states are 6%.
If you want to confirm the base rate on any market, just check the market rules.
Betfair have a loyalty program of sorts which allows you to receive a discount on the commission you’re paying.
Basically, every time you have a bet on Betfair, you accrue ‘Betfair Points’. The more points you have, the higher your commission discount. It works like this:
- All of your Betfair activity (winning and losing) is converted to British pounds (the UK being the home of Betfair).
- You receive 1 Betfair Point for every 10p of commission you pay on winning bets, and also for every 10p of implied commission on losing bets (the commission you would have paid had the bet won).
- Your level of discount on commission is then calculated based on the table below.
- Your Betfair Points then “decay” (reduce) by 15% each week: so you need to keep betting each week to maintain your discount rate.
- If you know you won’t be betting in a certain week and don’t want your points to reduce, you can take a “Betfair Holiday”. During that nominated week, your points will be frozen and not subject to decay. You’re granted one Betfair Holiday on sign-up, and then another every three months.
The discount rate applies to all markets you bet in. For example, you may be betting into a Victorian thoroughbred race, where the market base rate is 6%. If you have a 10% discount rate (7,000 – 8,999 points as above), your commission payable will be 5.4% of your profits (6.0% – 10%), rather than 6%.
Betfair also hits a small number of users with additional charges: turnover charge, transaction charge, and premium charge. These are aimed at users who have an extremely high volume of activity, and are something the vast majority of punters will not encounter.
For more information on these, or commission in general, check out Betfair’s information page here.
Part 1: Betfair: the basics
Part 2: Betfair: the matching process
Part 3: Betfair: how to lay