Betfair, the same as any other betting exchange earns its money by taking a commission from the players. But, unlike other betting exchanges, the commission Betfair charges is not the same for all players. To understand how Betfair commissions work, keep on reading!
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The commission a player has to pay to Betfair betting exchange can be anywhere from 7% to as low as 2%. It depends on several factors, including the location of the player and their Discount Rate.
At the beginning, your Discount Rate is going to be zero, meaning that you will be charged a 5% commission fee on your betting profits.
To calculate how much money you’re going to have to give away to Betfair, you can use this simple formula:
Your Net Winnings x Market Base Rate x (1 - Discount Rate) = Commission
In most cases, the Market Base Rate is 5%. Let’s say that you’ve won €200, the commission you’re going to be charged equals 5 percent of that amount. In maths, 5% equals to 0.05, so in this particular case, your commission is 200 x 0.05, which is €10. As your default Discount Rate is zero, you can simply disregard this part of the equation.
Giving away €10 to the exchange for a net profit of €200 might seem too much in your eyes, but the good news is that there is a way to reduce the fee. Although it’s not possible to do it straight away, you can get a fee reduction in a matter of days.
You just need to earn the Betfair Discount Rate, which is achieved through betting a lot. And if you’re a matched bettor, you’re going to be betting quite a lot!
The fee that Betfair charges goes down when the Discount Rate is taken into account. In order to get your discount, you need to collect enough Betfair Points. The more points you collect, the higher the discount you’re going to get.
The obvious question is how do I collect Betfair Points? The answer is through backing and laying bets on this betting exchange platform.
Betfair Points are rewarded to every bettor, regardless of whether their bet is a winning or a losing one. In the case of a winning bet, points are calculated based on the commission the player has to pay.
In the case of a losing bet, the number of points the player gets depends on the implied commission, that is, on the fee they would have paid if their bet were a winning one.
In both cases, one Betfair Point is rewarded for every 10 cents of commission. So, for a commission fee of €20, you’re going to receive 200 Betfair Points. And once you collect enough of them to reach a certain milestone, a Discount Rate will be applied.
As you can see in the example above, the number of Betfair Points you need in order to qualify for a 2% Discount Rate is 1,000. Practically, this means that you get the fee reduction after you’ve paid a total of €100 in commission (or implied commission).
Remember the formula for calculating the commission? Well, it’s time to use it with the Betfair Discount Rate included.
Let’s say you have collected more than 1,000 Betfair Points (2% off) and the Market Base Rate for your country is 5%. Here’s how you’re going to calculate the commission you’re going to pay on a profit of €200:
€200 (Your Net Winnings) x 5% (Market Base Rate) x (1 - 2% Discount Rate) = Commission
To get the number you’re looking for, just turn percentages into decimal numbers. So, 5% becomes 0.05 and 2% becomes 0.02, turning the equation into:
200 x 0.05 x (1 - 0.02) = Commission
And once you do the calculations, you get to the number of 9.8, which is how many Euros you’re going to be charged by Betfair for your €200 net winning. Obviously, it’s a slight reduction, but the more you play, the better it will get.
For a player doing matched betting, acquiring Betfair Points is not difficult. You’re likely to reach a point when your Betfair commission rate has been significantly reduced. The highest-possible Discount Rate you can get is 60%, for which you need to collect more than 150,000 Betfair Points.
Discount Rates depend not only on the number of Betfair Points, but also on the location of the player. For example, the players from Ukraine and Switzerland can get a maximum of 50% Discount Rate.
Furthermore, this kind of deal is available only for players from certain countries. Currently, those countries include:
The players from other countries pay the commission according to the Market Base Rate (MBR).
If you’re from a country that’s not eligible for Betfair Discount Rate, the formula for calculating is the following:
Your Net Winnings x Market Base Rate = Your Commission
The default Market Base Rate is 5% in countries such as the United Kingdom, Ireland, Italy, and so on. For countries like Croatia and Slovakia, the Market Base Rate is 7%. For players from other countries, the default Market Base Rate is 6%.
A great thing about Betfair is that it only charges a commission on profits. This means that there’s no charge when you lose a bet. Some other betting exchanges charge the fee on winnings, that is, the profit and the stake.
You don’t get to pay any additional charge, but you do receive Betfair Points as you would if you had won the bet. How it works is that the ‘Implied Commission’ is calculated, based on which Betfair Points are rewarded.
It’s basically the commission which you would have to pay on your net winning. So, no matter whether you win or lose a bet, you’re going to receive the same amount of Betfair Points.
Deciding to do matched betting means that you’ve set your eyes on profits. There are all sorts of factors that can impact your matched betting profits, including the commission that betting exchanges charge.
That said, let’s take a look at the commission rates that leading exchanges charge:
Obviously, the lower, the better. However, things aren’t always as they seem at first look. For example, the reason why some betting exchanges have lower commission rates is that they charge commission not only on winning bets, but losing ones as well.
Furthermore, a betting exchange might offer low commission rates just in order to try and attract more players to sign-up. But, that means that there might not be enough players ready to back the best you lay. And that can be a serious problem for those doing matched betting.
This is the reason why Oddshero only works with the best ones. Our matched betting tools lets you use the world’s most reputable betting exchanges, which will give you high value and low fees.
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