Here looking for ways to avoid paying Betfair’s premium charge? just had your first bill? Gulp. It hurts, doesn’t it…
Sorry to say this but; you’ve already made your first mistake – qualifying.
Prevention is way better than cure, both initially and when you enter the 40% deductions bracket.
Note: If you’re unfamiliar with this charge, see this article first: Betfair’s premium charge explained.
1. Guaranteed Losses Betfair Exchange Side:
Starting with one of the most straightforward premium charge avoidance strategies that absolutely anyone can do…
Extreme arbitrage. Yep, it’s not that hard, find a good quality arb and get every penny on possible without hedging.
I’m sure there are a few readers with their heads in their hands right now, but humour me here and think about this. Your bookmakers account will get stake restricted for doing this, and the bet could still lose, moving your bookie funds to the exchange. However, long-term, your Betfair Exchange balance is going to end up with the bookmaker’s accounts doing this.
The bigger the price difference, the quicker it will happen.
So you lost your bookies account, but you probably moved at least £5,000-£10,000 across the road doing this (plus some arb profit on route). It might not sound that exciting but consider that you’re actually preventing a 20% or 40% charge from being applied to your betting exchange account in the future. Suddenly that £10,000 you won on the bookie and lost on the exchange is £4,000 Betfair didn’t take away. Just make sure you have the bankroll and stomach to see things out.
The next suggestion is by far the best in my opinion, although it does carry some extra risks…
2. Multiple Betting Exchange Accounts:
Now I’m not going to say too much here, it’s quite obvious.
The initial premium charge allowance is £5,000. The 40% threshold starts at £250,000. All premium charges are in line with how much profit you make versus how much commission you generate. Having 4 of your nearest and dearest friends agreeing to perhaps you “helping them” with some “betting tips” in their name is quite an effective way of avoiding premium charges. Just make sure they know exactly what’s going on, agree, and you trust them.
Suddenly the thresholds are £20,000 and £1,000,000 respectively.
On this one, it’s probably best to make sure their bank statements aren’t directly linked to you. Just in case Betfair decided to demand them from the account holder.
Hardened matched bettors who use services like Odds Monkey might already be familiar with this kind of thing.
3. Flip-flopping Value:
Next up is a little bit riskier and involves increased generated commission.
I’ve spoken to many that say they have done it successfully, although I’m not the greatest fan myself. The idea is to back an outsider with Betfair Exchange and lay it off elsewhere on a different platform, such as Smarkets.
It’s a little like the first suggestion in this article, although you don’t really know which side the money will land on in the long term. It’s not totally clear where the value is, so it’s a short-term play.
The reason I’m no fan of this method is because of the following risks:
- Bad runs in variance
- Additional generated commission
- Bankroll required
There are arguments to counter all 3 points, such as getting a 0% markets commission deal and starting with shorter odd outsiders, with a very large bankroll. However, I don’t like it much personally. If you do end up on the unlucky side of variance you could end up paying even more premium charge. The next seems far more viable if you’re registering from the right location…
4. No Premium Charge Betting Exchange – Betfair Whitelabel
If you’re outside of the UK, it should be fairly easy to register with Orbit (a Betfair white label).
Registering via a broker is needed but its one of the easiest ways to avoid paying premium charge, because there isn’t any.
The downside is the offering. Markets and liquidity aren’t as freely available as the main Betfair website although I suspect it’s where most of the bets end up. There’s only a 3% flat rate commission to pay. Be sure to check it out if you’re able to register from abroad.
5. Making a Punt:
Last but not least, there’s the obvious option – don’t consistently win!
To avoid Betfairs premium charge isn’t easy although due to the way it’s structured (explained on the link below) it should only impact those who are consistently effective. Traditional punters that have huge variance and a lot more ‘luck’ in their betting strategy aren’t going to be hit anywhere near as hard. If your generated commission is very high in comparison to your bottom line profits there’s a chance you won’t even pay it.
As I said at the beginning, the key is to make sure you don’t qualify. Take a while to ponder these suggestions and get a strategy in place to prevent it before you get there is best…